My response to Jim Green

'Politically charged' piece on social housing erred in accusations

By Michael Geller, Vancouver Sun October 9, 2010 5:04 PM Comments (1)

There is nothing worse than opening your newspaper at the start of Thanksgiving weekend only to find a mean spirited, politically charged ‘op-ed’ article criticizing you for saying something that you did not say. ("Prejudice against social housing is not a Vancouver value")

That is how I felt when I read Jim Green’s error-filled and dishonest article claiming that I was prejudiced towards low income people and socially mixed communities in Vancouver. Nothing could be further from the truth.

I hope those who know me and my past accomplishments will recognize that what Mr. Green has written is malicious and false. But for the benefit of others, I would like to explain my recent comments about the social and financial issues that can arise in socially mixed communities.

I came to Vancouver in 1974 with CMHC to oversee the design and development of low-income housing for families, seniors and people with disabilities. As Program Manager-Social Housing I approved thousands of co-op, non-profit and municipally sponsored housing units around British Columbia. In 1976 I was appointed CMHC’s Special Coordinator for what is now the highly acclaimed redevelopment of the South Shore of False Creek.

I was subsequently involved with successful communities across Canada, including St. Lawrence in Toronto, Market Square in Saint John, NB, the redevelopment of BC Packers Lands in Steveston, Bayshore in Coal Harbour, and SFU’s UniverCity. However, I have also witnessed many unsuccessful projects and socially mixed communities over the years.

The South Shore False Creek had a very broad socio-economic mix that was achieved through significant federal and provincial subsidies and innovative housing programs. Many of these programs ended in the 80’s. When the planning began for North Shore of False Creek and Coal Harbour, the city required that these communities include 80% market and 20% non-market housing. Half of the non-market housing would be for seniors, and half for families with children.

Mr. Green claims that this mix was achieved at Bayshore. This is not true. Furthermore, he helped me successfully negotiate a ‘payment in lieu’ with Libby Davis and Bruce Erickson and the Council of the day, since he agreed this was not a suitable location for low income families. Instead, the developer made a contribution towards low income housing in the Downtown Eastside which he was happy to support. What is particularly infuriating is that I reminded him of this during a commercial break on Bill Good’s CKNW Civic Affairs Panel last Tuesday.

Furthermore, the 80/20 mix has not been fully achieved in the balance of Coal Harbour or the North Shore of False Creek. Why, because the city does not have the money to acquire and develop these social housing sites.

This is one of the reasons I initially suggested that the city should sell the social/rental housing at Olympic Village when the cost over runs and subsidy requirements were first announced. I reiterated this call six months later when the units were still vacant and all of the potential operators were rejected by the Province.

When I was told that the city might ‘go it alone’ and select the Portland Hotel Society (PHS) to manage the housing, I decided to speak out. Although I greatly admire the PHS, it has historically served the homeless and those often described as the ‘hard-to-house’ in the Downtown Eastside. Although the social housing at Olympic Village was never intended to accommodate this population, I was concerned that if PHS was selected, this could have a negative impact on the value of the unsold condominiums, whether the ‘hard-to-house’ moved in or not.

This is what led to my very unfortunate and misconstrued statement to Frances Bula about dividing socio-economic groups into A’s, B’s, C’s, D’s and E’s. At CMHC, we often spoke of these five quintiles. The homeless, hard-to-house and ‘core-needy’ households were the fifth quintile. While one can successfully mix different ‘quintiles’, when one tries to juxtapose the very rich with the very poor, there can be both social and fiscal consequences. You can find what I have been saying at www.gellersworldtravel.blogspot.com. You will see that I have never said what Mr. Green claims I have said.

The Olympic Village faces a number of financial challenges. We all want to see revenues from the remaining condominium sales maximized, so that the city’s loan can be paid back along with the outstanding land payment. For this to happen, it is time for politicians and former politicians, worried about the next election, to stop treating this community as a political football. I am concerned that Vancouver’s international reputation is suffering in part due to the unfounded accusations against the community. I hope that the city and developer can now collaborate on a new and successful marketing strategy so that Olympic Village can realize its potential as one of North America’s great communities, sooner rather than later.

Michael Geller is an architect, planner, real estate consultant and developer. He also serves on the Adjunct Faculty at SFU. He can be reached at geller@sfu.ca

© Copyright (c) The Vancouver Sun

My first response to Jim Green's mean-spirited and dishonest Op-Ed in today's Vancouver Sun.

I was shocked and disturbed this morning to find the following article by Jim Green prominently displayed on the Op-Ed Page of today's Vancouver Sun. I have sent a response to the Sun, but would like to address some of his points one by one. My comments are in red, because frankly, that's what I'm seeing at the moment!

Prejudice against social housing is not a Vancouver value.

Michael Geller is not telling us the truth about social housing. But he is telling us the truth about the Non-Partisan Association. I don't speak for the Non-Partisan Association, But I'll let you read on...

Geller is telling us that the city should sell off social housing at the Olympic village. This is true, to recover the $110,000,000 it has cost, and avoid the $62,000,000 in subsidy costs for 126 social housing units. The remaining units are market rental. The Vancouver Sun recently published an editorial supporting this view titled Sell Olympic condos at market price and build social housing elsewhere. Suzanne Anton, the lone NPA councillor at city hall, also supports this position.

Geller said you should not mix people of the A class with people from B, C, D and E classes. This is absolutely not true, and Mr. Green knows it. Anyone who has read Daphne Bramham's front page story or any of my recent posts on this blog knows that too I'll explain further later on. We have a pretty good idea that his idea of A class refers to those who can afford luxury condos. I’m not sure about B and C, but D and E clearly includes poor people and people who face difficulties in life, such as mental challenges, mental illnesses, disabilities, addictions, etc. The notion of five socio-economic quintiles is something I learned about while at CMHC. Mr. Green is correct that many of those he describes facing difficulties in life are considered by housing providers to be in the fifth quintile.

Geller clearly states that none of this cohort of people from the Downtown Eastside should be allowed to live on the property. By 'on the property' I assume he means in the first 126 social housing units. Does Mr. Green think they should be allowed to live in these units.

Geller is also saying there should not be supportive housing on the site. If this means the kind of housing provided by the Portland Housing Society, he is correct. I am sure that Geller knows that the City of Vancouver plan is for families and seniors/singles, not supportive housing. I do know that this was the original intention. However, once I heard that the Portland Hotel Society was being considered as the social housing manager, I had some doubts. Indeed, Mark Townsend of PHS has said that he would like to include some of this population. However, if some one later in life requires supports, it would not be logical to have them moved from Olympic Village. Agreed

Geller is going to every media outlet and telling everyone who will listen that the social housing should be sold off because people may not buy condos if there is social housing in the vicinity. I have not been approaching 'every media outlet'; however many, including Global TV, the CBC, CKNW, the Globe and Mail, and Vancouver Sun have approached me, because my suggestions which I have been posting on my blog for the past year re: selling the units made sense to many people.

As someone who has been involved in the development industry for years and who has worked on the original South False Creek project which includes Granville Island, Geller knows that the housing in that community is based on the concept of one-third low income, one-third middle income and one-third what the market will bear. Utne Reader proclaimed a few years ago that it was the best community in North America. I think we should congratulate Geller for his role in that development. I appreciate the kind words. Yes, I was the federal government's Special Coordinator for South False Creek while working for CMHC

Subsequent to the South False Creek project, in the 1980s, the City of Vancouver under Gordon Campbell as mayor, adopted a policy of 20-per-cent social housing on all large development schemes. The north side of False Creek has integrated social housing and market condos, as have the Bayshore Lands, which again Geller was involved in. Mr. Green should know that this is not quite true. At Bayshore, while we built the Performing Arts Lodge for seniors, we did not build any low income family housing because we were concerned that given the location and community infrastructure, it was not suitable. Instead, we made a 'payment in lieu' to support social housing in the Downtown Eastside. Mr. Green knows this because he helped me convince the Council of the day to allow this arrangement. This is how I first met him. And don't let him say he doesn't remember, because I reminded him of it at 9:45 last Tuesday morning during a commercial break on the CKNW Bill Good Show where we regularly appear on the Civic Affairs panel (We'll be doing it again this coming Tuesday at 9...you might want to listen in). L’Hermitage — a high-end hotel developed by Millennium, the developers of the Olympic village — includes social housing adjacent to the hotel. Woodward’s, with 500 units of market housing and 200 units of social housing located in the Downtown Eastside, sold out the condo units in less than eight hours. Geller is surely aware of these facts, and yet, he is putting forward a position that is not true. Mr. Green, what position am I putting forward that is not true? Surely you would not compare the very high end, luxurious condos at Olympic Village with the Woodwards condos targetted to edgy creatives and others who don't want to move to the suburbs?

Let’s step back in recent history. When I was on city council we endorsed a position of one-third low income, one-third middle income and one-third luxury units, a model that I believe is the key to the unification of our citizens in Vancouver. Key to the unification of our citizens? Give me a break. It's a model that was only achievable in the 70's given the significant amount of federal and provincial subsidy dollars available.

When Sam Sullivan came into office in 2005, he brought a right-wing ideology that reduced the social housing and eliminated the middle-income housing. He did reduce the amount of social housing, after staff calculated the subsidy bill since there wasn't federal and provincial money to subsidize it. He then proceeded to add luxury to the market condos, Hello! Sam Sullivan added luxury to the condos? This is really getting ridiculous. The developer and his marketing advisor Bob Rennie decided upon the program, not Sam Sullivan. and expensive sustainability requirements, including extremely expensive systems onto the social housing, which made for the most expensive social housing in the world. Now this is most interesting. You say Sam Sullivan is responsible for raising the bar on sustainability standards for the social housing. I'm sure others may have something to say about this...

The seniors building at the Olympic village is net zero (energy) — I know of no other social housing project anywhere that is net zero, it is so costly to build. Well Jim, you don't get around very much. There are net zero energy social housing projects all over Europe. I agree that the units are very expensive, and that's why I thought they should have been sold to young professionals and others who would appreciate and pay for the cache such a project offers...

Sullivan and the NPA mismanaged the entire Olympic village project, and when Vision was elected, they were able to save the taxpayers of Vancouver $90 million within the first couple of months by taking on responsibility for the loan to Millennium. Mr. Green, the current Council has not saved the taxpayers $90 million. What it has done is taken over the loan. If it is all paid off, as I hope it will be, it will have saved the developer a lot of money in interest costs. If it is not paid off, then the city will lose money. Is this not correct? Or am I missing something? Then they began to deal with the other issues that were created by the NPA.

Meanwhile, bloggers led by Daniel Fontaine, former chief of staff to Sullivan, and Michael Klassen, who also worked for Sullivan, have been bringing up every conceivable criticism of Vision’s attempts to save the development, now called Millennium Water. They appear to have adopted the tactics of the Tea Party movement in the United States. I'll let them respond to this.

We see Geller waving the same flag, which flag, the Tea Party flag? You've got to be kidding! but he is also making comments that are negative toward low-income and working-class people. Mr. Green, I have not made any negative comments toward low-income and working class people. What I have said is that the city should not allow, or give the impression of allowing the Hard-to-house to live in the first phase social housing units, and I'm told the Mayor and city staff are saying the same thing. For instance, he says we cannot have the “wrong people” at the development, or we have to have people who “contribute” to society. Or we have to have people who “contribute” to society. Can you please point out even one example of me saying anything like this? I never have. All I keep saying is that we should not be accommodating the hard to house in the first phase social housing, something that Frances Bula and others assure me is not going to happen.

These prejudices are overwhelmingly against what has made Vancouver the great city it is. What prejudices?

We can boast about former athletes’ village being the most sustainable development in the world, but sustainability is made up of four pillars: environmental, economic, cultural and social. Exactly, and subsidizing 126 social housing units to the tune of $62 million is not economically sustainable. Does Mr. Green not agree? If we do not have the inclusivity that we promised and wrote into the guarantee section of our bid for the 2010 Olympics, we do not have a sustainable project. Nonsense. I have been suggesting all sorts of inclusivity...just not the Hard-to-house. Do you not agree Mr. Green?

Vision has pledged to be as true as possible to our guarantee, and is looking at every means possible to have social sustainability on the site.

It would appear that the NPA members are turning their backs on the history of their party. Gordon Campbell brought in the 20-per-cent rule. Philip Owen stayed true to this concept, but it was attacked and eroded during Sam Sullivan’s short reign. Now, Geller is working to create an Executive City that does not allow for middle-income renters and residents of social housing. Mr. Green should just stop and read what he just wrote. Where have I ever suggested that I want to create an Executive City that does not allow for middle-income renters? The fact is, the community already has about 129 middle income rental suites, developed by Millennium. Is he not aware of this? He should be. He was once a consultant to Millennium on this project.

Geller is aware that when he says sell off social housing and build it elsewhere that adding 250 units to the marketplace from the exact same site will not help market the existing condo units.I am not aware of this at all. And if you had taken the time to read just a portion of what I have written you will see that I have laid out a very good plan to distinguish these units from the more expensive condominiums. But Mr. Green, I have already said I realize that the city is not going to sell these units and have agreed to move on. If you had not written your nasty op-ed, I would not be commenting at all on Olympic Village. I hoped I was finished.

He says we can build the social housing elsewhere. As a development consultant, he is aware that we could be looking at close to a decade to see completion of those units on another site, if at all. I disagree entirely. I am happy to suggest a number of ways of building or acquiring new social housing if that was the only concern. Certainly the NPA, given its current attitude, would not be in a hurry to see it happen if the party was returned to power. I will let the NPA respond to this. I do not speak for them. Nor do I pretend to. Which is one of the reasons this entire attack by Mr. Green seems so outrageous.

It is important for the people of Vancouver to know that when promises have been made, those promises will not be voided for political reasons. They need to know that promises made to communities are promises kept, and are not in danger of being done away with once approvals are in place.I basically agree with this. But when circumstances change, rational people also need to change their decisions. I don't remember anyone promising the taxpayers that these units would cost $110 million and require $62 million in subsidies, or sit empty for six months after the Olympics. Do you Mr. Green?

I believe strongly that the people of Vancouver are motivated by caring for this city, and for others, and do not share the negative attitudes he is putting forward. Well Mr. Green, I too care for this city. But I have been astounded by the number of people who do agree with what I have been saying....not what you say I have been saying....but what I have been saying. The editorials in the Vancouver Sun and Province are two such examples...

I believe the people of Vancouver want to live in harmony with one another and do not support a Vancouver that is spacially segregated, and that there are no “right and wrong” people, only people. Mr. Green, you might want accompany city staff to a Public Hearing some time. The reality is that the segregation of a city into different neighbourhoods, appealing to different social and economic groups is very much a reality in Vancouver. That's why housing activists in the Downtown Eastside have opposed my call for more middle income residents in that community. But that's another story, isn't it?

Jim Green is a former Coalition of Progressive Electors city councillor and ran for mayor with Vision Vancouver.

© Copyright (c) The Vancouver Sun

Read more: http://www.vancouversun.com/news/Opinion+Prejudice+against+social+housing+Vancouver+value/3647160/story.html#ixzz11tYlTNit

To be honest, I really don't understand the motivation for this nasty article. On the Bill Good Show Jim Green and I generally get along and have a good exchange of ideas. However, at the last segment, he said I was speaking out about the Olympic Village as part of an election campaign. I assured him, on air, that I had no intention of running. And this episode has convinced me that I have made the right decision.

The fact is, I realized some time ago that I am not cut out for politics. Instead, I want to continue to continue as an architect and planner, real estate consultant and developer. I want to work in Vancouver and other municipalities. I am not looking for battles, especially with the current council or city staff. I need to be able to work with them. As one commentator said to me recently, I like trying to get along with people.

I hope this issue will eventually subside. However, I do feel very concerned that this article will alter the way some people see me. And that's damage that will be difficult to undo.

Two views on the Olympic Village Social/Rental Housing from the Vancouver Courier

Recently, the Vancouver Courier has published a couple of pieces regarding the social housing at the Olympic Village. On October 6th, Cheryl Rossi wrote this piece:

Potential Olympic Village buyers concerned about social housing factor

By Cheryl Rossi, Vancouver Courier October 6, 2010

Read more: http://www.vancourier.com/business/Potential+Olympic+Village+buyers+concerned+about+social+housing+factor/3631557/story.html#ixzz11mbblXPe

Today, Allen Garr wrote an opinion piece which is linked below, following whichI posted the following comment on my Facebook Page:

Michael Geller I have fewer concerns if the coop hsg federation manages the social and market rental housing at Olympic Village, instead of the Portland Hotel Society. But I still believe that selling the units as affordable housing on leased land would have been the best option. But I agree with Allen Garr, the decision has been made and it's time to move on!

City on track with Oly Village social housing plan

www.vancourier.com

What I don't agree with is Allen's assertion that the city could not recover its costs if the units were sold. That's even contrary to what the city staff said in their April 20, 2010 report in which they reported a net return to the city in the range of $28.5 to $66.8 million. I also don't agree that selling the social/rental units would necessaily compromise the sale of the more expensive market units. As long as these units were carefully positioned as different products catering to different markets, this need not be a problem. Moreover, as Cheryl Rossi's Courier story reveals keeping the social housing units could adversely impact sales.

However, I realize it is time to move on. I am glad that I did have some success in fostering a debate on the issue and was gratified by editorials in both the Vancouver Sun and Province supporting the sale of the units. I also appreciated calls from many people from all over the political spectrum, and from all walks of life.

So now I will focus on other things.... including my forthcoming proposal for 'gentle densification' in West Vancouver and a presentation next Tuesday night in Surrey as part of Homelessness Action Week.

To those of you who have been following this matter with me, and especially to those who have written and called offering words of support, thank you.

Housing the very rich with the very poor: What I was trying to say!

For the past few weeks, many people have been concerned with my suggestion that the city should sell the social housing at the Olympic Village. However, some were aghast when I tried to suggest to Frances Bula, writing for the Globe and Mail, that one reason for doing this was to avoid the dampening effect that juxtaposing the very rich and very poor could have on the value of the remaining condominiums.

Let be begin my defence by referencing Daphne Bramham’s thoughtful story in today’s Vancouver Sun:

“In Canada, we pretend to have a classless society.

Ask most Canadians to define themselves and they’ll say middle class, regardless of whether they’re six-figure earners or barely scraping by with their credit cards maxed out to pay the rent.

We pretend that we have a social safety net that keeps the vulnerable from falling through.

So it’s no wonder that many people are aghast that earlier this week developer Michael Geller suggested one reason sales are slow in the white-elephant Olympic Village is that rich people don’t want to live with the poor.

But what Geller has done is open a debate that’s been festering in Vancouver ever since the city’s mass expansion began after Expo 86 and pioneering activists such as Jim Green and Libby Davies began the protectionist movement in the Downtown Eastside, a.k.a. Canada’s poorest postal code.

To be fair to Geller, his suggestion is more nuanced than rich versus poor.

What he’s saying is that if you spend $2 million on a waterfront condo, you probably don’t want to have a dual-diagnosis recovering addict with HIV/ AIDS living next door or a guy who’s lived on the streets and is in his first home in a decade.

But Geller goes on to say that if you’re spending $2 million, you’d probably be okay if some of your neighbours are single moms with kids and a job, seniors or double-income, working poor.

He’s probably right. After all, for many people, buying splendid isolation from the mundane, dismal and disturbing facts of other people’s daily lives is exactly what money is for”

You can find the rest of the story at http://www.vancouversun.com/opinion/Talk+around+Olympic+village+condo+sales+exposes+unwillingness+help+city/3636037/story.html

My father often reminded me that we usually judge people by what they say and do, but we expect others to judge us by our motives. So let me share my motives in saying what I did.

If the social housing was not significantly over budget, and if the City wasn’t facing what some estimate as a $150 to $200 million loss, I would never have spoken out on this matter. However, this is the reality. To exacerbate the situation, the social housing units have been empty for 9 months, and all of the non-profit management proposals were rejected by the province. The only one that appeared to have support was one from the Portland Hotel Society which historically has served the Hard-to-House. Add to this a Vision Councillor’s comment that his goal was to fill the social housing units as quickly as possible.

It was within this context that I wanted to caution the city about the potential impacts of placing the very low income people who PHS normally houses next to the market condominiums. From my four decades experience in the planning and development of housing and communities, including serving as Program Manager of Social Housing for CMHC, the federal Special Coordinator for the Phase One South Shore False Creek redevelopment, and involvement with Bayshore and UniverCity, I truly believe this would reduce the value of the remaining condominiums.

To help explain the five social and economic quintiles that are often considered by housing and social planners, I used the abbreviations A, B, C etc. While I regret doing this, my intention was little more than to help reinforce the idea that some mixing of incomes and household types will have little if any impact on values, but a significant disparity between the very rich and the very poor will impact values.

Given that the city should now be trying to minimize the potential losses at the Olympic Village, I am urging the administration and Council to sell the social housing and rental units to those seeking more affordable ownership housing. However, if they retain the units, as I suspect they will now do, they should not select the PHS since, in my opinion, regardless of who they place in the units, the perception that they bring will impact the value of the remaining condominiums, especially those priced in seven figures.

As I have often noted, this observation is not a criticism of the Portland Hotel Society. For years I have admired Liz and Mark’s commitment to serving the ‘hard-to-house’ with a variety of accommodation and services in the Downtown Eastside. I especially support what they have done at the Woodwards development which appears to be a successful mixing of incomes. Ironically, in the past, I have often been criticized for advocating more income mixing in the DTES where many advocates for the poor prefer to keep the more well to do out, in order to prevent gentrification.

To those of you who were shocked by my comments, I hope this provides some explanation. However, I do look forward to any comments or questions which I will happily try and answer.

It's Chuck Davis Day!

At 2 pm today, in the Vancouver City Hall Council Chamber, Mayor Gregor Robertson will proclaim this day as Chuck Davis Day, in honour of the former broadcaster, journalist, and author's great contribution to the history of this city and region. I shared this information with Chuck, and also posted it on Facebook where I received some comments I wanted to share:

Brock wrote:
"Chuck was one of reasons I became a journalist. He deserves this day to be
enshrined annually. Good call."

Judy wrote:
"For anyone who suffered through Grade 10 Canadian history (how did they
manage to make it so dull!?), Chuck's look at the pioneers, builders and
scoundrels of yesteryear (and today) made me love this place even more. I
would like to see an annual day turned into a "teachable day', where vast
tracts of Chuck's absorbing work becomes required reading from K-12. It
would give us all an even greater appreciation for this place we call home.
Oddly, we don't have a Vancouver Day celebration. Using Chuck's material
would bring such a day, alive."

Here's my note to Chuck:

Chuck, I was delighted to learn that October 5 will be Chuck Davis Day in
Vancouver, and hope this will help raise awareness to collect the money
necessary to finish your opus. I am very grateful to Jeff Lee and Michael
Klassen who have both written beautifully about your contributions to our
city.

I do have two regrets:

1. I gather you may not be able to get to the Council Chamber for the Proclamation, and

2. If the Mayor could have waited until October 6, the event would have coincided with my birthdate which you recorded in your latest 'book'....Oct 6, 1947! (http://www.vancouverhistory.ca/chronology1947.htm)

I do hope you are feeling as well as can be expected. with my best
wishes...michael

Here's Chuck's response

Michael: this was the first notification I've had about what's going to
happen tomorrow! I knew there was going to be a proclamation, but I had no
idea a day would be named after me!

How about if we celebrate your 63rd birthday by calling it The Day After
Chuck Davis Day?

Thanks for your kind wishes!

Chuck

An Olympic Village Reality Check

A number of people have suggested that I have been too silent in responding to those who blame the NPA for the current situation at Olympic Village. To them I say I do not think there is a lot of benefit in continuing to treat this project as a 'political football'. However, I do think there is benefit in trying to understand how we got to where we are, in order to assess how best to resolve the situation and make sure we don't get into a similar situation again in the future.

The following is a modified version of an email I sent this morning to a number of people in the media who are writing about the Olympic Village, as well as a few city staff. Rather than send copies to everyone affected, I have decided to post a slightly modified version of my notes below:

As we all analyse how we got into the current situation, and how we get out of it, here are a few matters that I think need to be checked out with real estate experts as you write future articles and the city prepares further fiscal analyses related to the Olympic Village Project:

1. Is the Mayor correct in saying it's naive to bring more units onto the market, in response to the suggestion that the social and rental housing units be sold?

2. What is the average cost of the condominium units, in terms of dollars per square foot, and what is the likely rent? On this basis, is there a business case for renting these units out, as Raymond Louie is quoted as saying? Would the city ever recover its costs and land payment? (as an aside, my understanding is the average price is in the range of $1100 to $1300, or more. The rent is not likely to be more than $2.50 a foot, given the larger unit sizes. On this basis, the numbers will not work, especially when adding in the future repair and renovation costs, etc.unless there is a significant increase in market values. Furthermore....

3. This is a minor consideration, but if the units are retained by the city and rented out, just how much property tax money would be lost over 10 years? Was this factored into the business case? (my guess, and this is just a guess, the annual property taxes are in the order of $7,000 per unit x 450 units x an annual increase x ten years....that's probably $40 million right there!)

4. How much does the decision on the future of the Social Housing units affect the overall revenue projections. For instance, in addition to saving subsidy costs, and recovering costs and possibly a small profit, are the condominiums worth less if the social housing units remain as social housing? If so, how much less?

I would like to think that the UDI members who initially advised the city could provide some assistance in addressing these questions.

5. In addition, how significant is the 'obligation' to the International Olympic Committee? Should this reallybe a factor in the city's decision on how best to proceed?

While some like to blame previous councils for the current situation, the following are some of the factors that I think are responsible for where we are now:

1. The initial decision to offer the site to one developer. It was too many units for any one firm to build and market in an effective way.
   
2. Millennium's initial bid, at a time of rising prices, was too high for the land. As a result, they started off very badly. The high price also led to their decision to build very high end units
3. The law department's insistance that the city not transfer title until the project was completed. Unfortunately, Millennium and its lawyers did not fully understand the ramifications of this, until they tried to arrange financing;
4. Millennium's choice of architects. Merrick and Erickson were both talented firms, but the wrong choice for this project; Their designs were very inefficient, not truly respecting market realities and very expensive to achieve. At one point, Millennium wanted to use other architects but wasn't allowed to do so. GBL, the architects for the social housing are an experienced firm; but they saw this as a chance to design the most impressive social housing in the world, and they tried to. That too was a mistake;
5. The extensive and confused community direction, and the Planning Department's interference in the planning process. Directors of Planning and other city staff have often talked about how much they influenced the design of the overall plan, the streetscapes and buildings
   
6. The decision to make this the greenest project in the world, and a LEED Platinum award winner; None of us really know just how much this added to the cost...but as I have often told Frances Bula, it's not 5 or even 10%...it's more.
   
7. Poor project management by Millennium who had a very small staff, and had never undertaken such a large project. The company has created some very beautiful and successful projects, but was completely over its head on this one;
8. Poor project management by some city staff, especially related to the Social Housing in terms of the initial program, unit sizes, building efficiency, specifications. In part, this might have been due to all the other projects they were having to deal with. There was also an absence of involvement by the Province, who normally are involved. BC Housing let the city make mistakes on its own. This was a very unusual situation;
9. A difficult bidding climate. The project was put out to bid at a time of rising costs. ITC is an excellent contractor and Metro Can was also very experienced. I have never worked with them so cannot comment further But as I noted in Frances Bula's Vancouer Magazine article, Millennium has had past difficulties in its dealings with contractors since they often participate in certain aspects of the construction themselves. This impacted the initial bids, and the subsequent cost of change orders, etc;
10. The world global crisis. Most of us never expected the dramatic events that happened. For instance, while I didn't know much about Fortress, I never expected them to get into such serious trouble, and I admit to saying as much in a CTV interview in fall 2008;
11. The city staff's recommendation to Council that the city guarantee the loan to Fortress in order to ensure that the project was completed on time. While some would say the city had no choice given the need to complete by an imovable deadline, there were other options that could have been implemented at the time. It is unfortunate that the city councillors were either not presented, or did not appear to understand the full legal and financial ramifications of this decision.
    
12. The timetable related to the project, and deadline to complete. It is interesting that one major developer recently told me he didn't bid since he was concerned when Larry Campbell was Mayor that it was taking too long to get the project started.

Now, in terms of moving forward, I still believe the city could recover its costs for the social housing and market rental housing by selling the units as 'fettered ownership'. I don't think this is naive. They could be offered as leasehold, and carefully positioned and priced to not inappropriately compete with the market housing. One idea might be to follow the lead of earlier phases of South False Creek and give purchasers the option of prepaying the lease, or making monthly/annual payments perhaps on a pre-determined graduated payment scale, with lower payments in initial years. This could enhance affordability and broaden the community mix.

The alternative, for me is problematic due to the cost of subsidizing the units, even the market rental units. As noted above, I do not believe Vision councillors are correct in believing these units are not being 'subsidized'. They are being subsidized, when you cnsider the amount of equity the city will have to put in, with little or no return. When you add in the lost revenues on the land, the 'subsidy' is even greater.

One of the concerns I have with retaining the social housing as social housing, is that both the Mayor and the Portland Hotel Society have spoken about the need to house the homeless. The PHS has only been involved with housing the hard-to-house... the drug addicted and those with mental illness. Even if that's not who the city wants or expects to move in, this is now the public perception. The stated desire by one councillor to fill the units up quickly could exacerbate the problem.

My other concern is that the income and social disparity between the potential social housing residents and the residents of the market units is too great. We had the same potential problem at Bayshore and addressed it by relocating some of the social housing to another site, with support by politicians on the right and the left. The current proposal will not only reduce the value of the condominium units, it could result in a less than desirable community.

In terms of selling the market units, I think there are advantages and disadvantages to a number of options. Again, those lenders who have been in similar situations are in a position to offer better insights. However, from my limited experience with similar situations, the solution is not always as obvious as some lay people might assume.

One day this will be a very attractive and lively community. However a lot of wise decisions need to be made in the coming months, in order for this to happen. I hope these remarks are helpful in explaining my concerns and viewpoints and resolving the outstanding challenges.

What to do with the 252 Social/Rental Housing Units at Olympic Village

The following are notes that I posted on Frances Bula's blog (www.francesbula.com) in response to the news that the Province has rejected all of the proposals to manage the social housing and market housing units at the Olympic Village, and the City wants to go it alone...which appears to mean it will be guaranteeing another loan which it was hoping the Province would guarantee:

I hate to keep dwelling on this, but I think the city will make a bad situation worse by ignoring the messages coming from the province and trying to ‘go it alone’ with the Portland Hotel Society.

I would like to make it clear that I am not normally opposed to mixing market and non-market housing. As the federal government’s Special Coordinator for the Phase One redevelopment of the South Shore of False Creek, I helped the city achieve its one third low income, one third mid income and one third higher income social mix. As Program Manager-Social Housing for CMHC I oversaw the development of thousands of social housing units, many of which were integrated with market developments. As the President of the SFU Community Trust I helped create a social mix by including both housing for students in smaller ‘suites within suites’ and non-market faculty and staff housing at UniverCity.

However, in this particular situation, I think the time has come for the city to admit that it might be better to accommodate lower income households on the immediately adjacent City-owned sites , and allow some or all of these 126 social housing units and 126 market rental units to be sold as more affordable ownership units.

Priority could be given to those seeking ‘workforce’ housing in the city including firefighters, police officers, school teachers, etc. To differentiate this housing from the market condominiums, the land could be leased, rather than sold.

Over time, as the city’s financial position improves, some units could be bought back and used social housing, if so desired.

I reiterate this suggestion since it would help the city recoup its costs, and maybe even make a small profit, rather than incur over $60 million in subsidies, some of which are being used to subsidize high income people to move into the market units.

According to the staff report that was considered by council last April, the city could make up to $60 million+ by selling the units. That’s a $120 million+ swing between renting and selling.

City staff feared that selling these units would negatively impact the sale of the market units. I would suggest the opposite is true. If the Portland Hotel Society, (which I understand to be the preferred bidder, and which has an admirable track record dealing with the hard-to-house in the DTES) is the selected operator, many potential buyers of the condominium units could be deterred from buying. We are starting to hear this message from many real estate experts and urban commentators. In other words, this type of social housing could reduce the value of the market units.

Another reason why I am so concerned in this instance is that mixing the very rich with the very poor usually does not create a good community. This is very hard to do successfully. I would note that former city alderman Libby Davies (whose judgment and compassion I have often admired) and housing advocate Jim Green supported this view when consideration was being given to housing the very rich and very poor together at Bayshore in Coal Harbour. In the end, politicians from all political parties agreed that a ‘payment in lieu’ was a preferable approach for some of the units, and the Performing Arts Lodge was approved for the balance. This ended up as an award winning solution.

Another reason for selling the units would be to reduce the city’s potential losses on this development. I do not pretend to know all the numbers, but I do know that the city was counting on getting the balance of the $193 million land payment to pay for the cost of the extensive infrastructure and community amenities. While we don’t talk about it, I have been advised by city staff that most, if not all of the city works have gone over budget. The land payment from Millennium was to cover these costs. Now it appears this payment may not be made.

In addition, the city has lent Millennium the money to complete the project. I am advised that the city is not likely to get all of this loan repaid from the proceeds of the sales. The only question is how much are we going to lose. By selling the social housing and market rental units the city to could help reduce potential losses.

(If it is politically impossible for this council to sell the social housing units, then at least sell the rental units. Why should we as taxpayers be subsidizing people to live in them? And we are, since the proposed rents, even at $1600 a month and more, are not sufficient to cover the costs and a nominal return on equity.)

Furthermore, Millennium is having some difficulty renting its 129 market rental units. That’s right. Millennium has rental units that are only 35% leased to date. And the city still hasn’t rented all of its units at 1 Kingsway after 9 months. Why bring more market rental units to market, especially when no one appears to want to manage them.

Some will say that my comments should be ignored since they are just politically motivated. They are not. Rather they are based on four decades experience in the development of market and non-market housing across Canada. They are based on what I think is common sense, rather than political ideology. As I said on the Bill Good Show, I think this Vision Council is often well intentioned, and it has accomplished many good things. But it has made a number of mistakes, and continuing to try and keep these expensive and inappropriately designed units as social housing and market rental housing could be a very damaging and costly mistake.

I therefore urge the City administration and Council to not ‘go it alone’. Please reconsider your April decision in light of the current situation. And if someone tells you that you can’t go back on a pledge you made five years ago to the International Olympic Committee, tell them that the situation has changed. There are some urgent housing needs in the city, and this is the most prudent course of action. I am confident that they will understand.

In summary, in time the Olympic Village will be a wonderful community. But it needs some wise decisions over the coming months, to help this to happen. Let’s start by reconsidering the future of these units.