COPEing With Housing Policy

Making policy democratically can be a messy business; it is always cleaner and more efficient to dictate policy from the top and simply have the underlings sign off on it. But that is not democratic, and COPE is nothing if not democratic. And so it was that I spent a couple of hours watching membership rather messily go through Housing Policy proposals on Saturday morning at the WISE Hall.  Policy development, though arguably the most important part of politics, is not a “sexy” enterprise to many and there were fewer than three dozen members in attendance. However, they more than made up for the small numbers by their enthusiasm and passion for the topics discussed.

Co-chair Connie Hubbs began by noting a number of dates that are of interest. The Vancouver District Labour Council is holding a “mediated” meeting on May 6th in their continuing attempt to create an alliance between COPE, the Greens, One City and Team Jean. I’m guessing Vision may also be invited even though their mayoral candidate — laughingly called an “independent” — has made it clear she doesn’t want to meet with COPE.

In the meanwhile COPE and Team Jean are continuing to meet with Patrick Condon who, in my opinion, would make a very good mayor; I suspect he would be attractive to the Greens too.

The COPE nomination meeting is set for June 10th, with more details to follow. If you are interested in participating, you need to be a COPE member thirty days prior.

Then, onto policy. A long document was circulated with a number of different proposals.  It was revealed later in the meeting that some of the proposals had already made their way to the Policy Committee and had already been incorporated into their document which will be brought before the membership. This meeting was dealing with a very wide range of topics from Housing through Economy, Transit to Indigenous Relations. I was only able to stay for the Housing segment.

The first set of proposals from a member, included a call to increase the cost of CACs and DCLs “to reflect true benefits to developers,” a luxury of “mansion” tax on super-expensive homes, a moratorium on condo building and gentrification in the DTES, an immediate moratorium on demolition “in single and multi-family zones”, a major push in rental construction, rent controls on “large developments”, and changes to regulations to make in-house suites easier to build.  This was such a large and complex set of proposals (I have merely traced the high points above) that it was clearly destined to be referred back to the Policy Committee for refinement and further consideration. (see my comments at the end of this review)

A second proposal from a member concerned a city-wide plan and neighbourhood consultation prior to re-developments, including a final veto by neighbourhoods.  There was some serious discussion about the problems with a city-wide plan, and no-one seemed to recognize that if a neighbourhood can say “no” to development then Shaughnessy and Point Grey and others could just as easily say “no” to social housing. This motion, too, was referred for more work.

A proposal to increase use of co-ops was approved.

Team Jean submitted a number of proposals including a four-year rent freeze (approved), and making rents tied to each unit rather than to each tenancy (approved).  Team Jean also proposed a mansion tax, the stopping of renovictions by giving the right of return at the same rent to any tenant displaced, better checking of rental condition by City Building Department, moratorium on demolition of rental properties when vacancy rate is below 4%, a proposal to end discrimination against pet owners in rentals, the building of 4,500 affordable units per year for the next four years, and the development of a progressive commercial property tax to assist small business owners.

Proposals from others also included allocation of foreign buyers’ tax and speculative taxes to purchase of land for affordable housing, and upzoning all city owned land.

Unfortunately, we were just going through Team Jean’s proposals when it was decided to refer to the Policy Committee’s updated document. This meant essentially starting again. What eventually brought discussion to a halt was a proposal by Policy on the allocation of speculative tax revenues which included, at the very end,  the notion that some funds should be used to “start the process” of returning indigenous land to the indigenous people.   No one was opposed to the principle but the meeting got bogged down in semantics and a discussion about indigenous rights.

By the time this had gone on for a while, I had used up all the time I had and I had to leave.  There were some valuable discussions at the meeting but I was struck by a few things.

  • There seemed to be no recognition that developers do not pay the CACs — they pass them on and the end user pays, thus adding to the already unaffordable prices.  The calls to increase CACs will not harm developers, but simply make things worse for all of us.  I have stated often enough my belief that CACs should be dropped entirely (this immediately lowers the price of housing) and we should return to the highly successful and democratic process of bi-annual bond plebiscites to determine what community assets we are willing to pay for through property taxes: let the people decide, not the developers in cahoots with Planning;
  • Other than a rent freeze (which leaves things in the sorry and expensive state they are) and a vague call for rent control, there was no discussion about affordability of new rentals. In fact, there was a call for just the building of more rentals as if that will solve matters.  We need to build more rentals, it is true, but we also need to amend Rental100 so that incentives are given to developers ONLY for rentals that can be afforded by the median and lower income earner with at most a 30% of median income limit;
  • The Coalition of Vancouver Neighbourhoods has already produced an excellent set of principles for consultation and neighbourhood consultation and approval of new development. Why re-invent the wheel?

I am glad to have gone and wish I could have stayed longer.

 

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3 Responses to COPEing With Housing Policy

  1. Alex Greenfields says:

    What makes you think that dropping CACs will lower the price of housing? I’m not in support of CACs, but I don’t don’t see why sellers will would lower their asking prices just because CACs are discontinued. Unless they’re engaged in philanthropy, sellers will always ask for the maximum they think they can, regardless of what their costs are.
    Or are you suggesting that the amenity produced by the CAC makes the development more attractive to buyers and results in a direct and corresponding increase in the amount which they are willing to pay? I don’t think that’s at all obvious so I’d need to see some evidence supporting that. And even if it were demonstrably the case that money collected from CACs results in a corresponding increase in prices, it seems like amenities funded through taxation would have same effect. But in the case of tax-funded amenities the cost would be borne by everyone whereas the benefits (of amenity use and property price escalation) would accrue disproportionately (or solely) to those who live in the amenity’s immediate vicinity. So in that light funding amenities through CACs actually seems like more equitable than employing tax revenues that could otherwise be deployed for the equal benefit of all citizens.

  2. jakking says:

    Several points. You may well be right that developers are greed SOBs and will not reduce their prices even though their costs go down. However, the main point I am making is that CACs definitely increase the costs and therefore the prices. By your own logic, I assume you don;t expect developers to pay the CACs out of their profits.
    Second, CACs were designed, I understand, to provide amenities in the neighbourhood where the development takes place. That idea has gone out the window long ago.
    Third, community amenities are used by the entire city population and thus should (a) be paid by everyone through property taxes and (b) should be chosen by the people not developers and planners in private backrooms.
    CACs are a relatively new idea. The City that we grew up to admire and love was built through plebiscite bond issues; a system that worked well for generations.
    See more at https://jaksview3.wordpress.com/2015/07/22/the-crack-cocaine-of-city-finance-2/

    • Alex Greenfields says:

      “CACs definitely increase the costs and therefore the prices”

      I don’t think this is the case at all. No business sets its prices based on cost. Every business will charge as much as the market will bear. (To do otherwise means they are engaged in philanthropy or social enterprise, not business.) If costs decrease their profit will simply increase, unless competition drives it down (which is how our economic system is supposed to work). However, many markets simply don’t exhibit competition, especially markets where the provision of essential goods and services has been privatized such as fuel, telecommunications, post-secondary education and housing. In these markets prices simply aren’t determined by costs. Instead, prices are determined by the availability of capital and credit. This is a big problem because governments at all levels have been acting to limit competition within the real estate industry while increasing credit access to dangerous levels and also facilitating massive inflows of capital into the market. That is what’s causing the escalation in our real estate prices.

      “CACs were designed, I understand, to provide amenities in the neighbourhood where the development takes place. That idea has gone out the window long ago.”

      I don’t know whether CACs are currently functioning as per their design intent. I wouldn’t be at all surprised if they’re not, but I haven’t seen any data on this.

      “community amenities are used by the entire city population and thus should (a) be paid by everyone through property taxes and (b) should be chosen by the people not developers and planners in private backrooms. CACs are a relatively new idea. The City that we grew up to admire and love was built through plebiscite bond issues”

      I agree that the creation of community amenities should be driven by a democratic process and funded through some kind of wealth tax (with real estate property taxes currently serving as our closest proxy for a more comprehensive wealth tax). But it’s not the case that all people benefit from amenities equally. People who live next to a new community centre or transit station obviously have much better access to it than those who live 5km away. And more significantly, those who live near the amenity will see their property values rise as a direct result. This is exactly rationale behind land banking; speculators recognize that they can hold land and simply wait while publicly funded infrastructure and community activity increases its value. I think it only makes sense that those who receive financial benefit from the creation of public infrastructure should play a larger part in funding it than those who don’t. I think CACs actually do go a small distance towards realizing that, but I think a better way to do it would be via a huge capital gains tax on real estate.

      I’m not in favour of CACs as they currently exist, but I don’t think eliminating them will have any causal effect on real estate prices.

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