Saturday, 1 November 2014


When the people who write the Mayor and Council's stuff tell us that they have created thousands of affordable housing units, to what extent is it true? It all depends on what we mean by truth. If we define "affordable" as what someone could afford, then the statement has a certain truthyness but within a context of falsyness.

Section 523(d)(10.3)-(10.5) of the Vancouver Charter authorizes the City of Vancouver to waive or reduce Development Cost Levies (DCL’s)  for “for profit affordable rental housing”. In 2009, the City endorsed a program called 
Short Term Incentives for Rental Housing (STIR). Its goal  was to create market rate rental housing for moderate income households who cannot afford home ownership in Vancouver.

The City Manager was empowered to decide what development she considered to be “for profit affordable rental housing.”  Under STIR, the City granted developers enormous tax breaks and rezoned their lands to allow for massive increases in density and height but did not cap the rents in any way. Not surprisingly, actual rents ended up being significantly higher than the rents the City Manager deemed affordable at the time of providing the breaks and rezoning.

In May 2012 STIR was replaced with Rental 100. As with STIR, the goal of Rental 100 was to increase the supply of market rental housing. On the eve of a court hearing brought by the West End Neighborhood Association, the City amended the  bylaws to re-define “for profit affordable rental housing” as follows:

(a) all dwelling units in the building are rental units;

(c) the average size of the dwelling units is not greater than:

(i) 42 square meters for studio units,

(ii) 56 square meters for one bedroom units, or

(iii) 77 square meters for two bedroom units,

(d) agreed upon average rents per unit type for initial occupancy do not exceed the following specified rents:

(i) $1,443 per month for studio units,

(ii) $1,517 per month for one bedroom units, or

(iii) $2,061 per month for two bedroom units,

Annual rent adjustments were allowed.  The proposed construction costs were not to exceed $2,475 per square meter, annual adjustments. A covenant restricted the tenure to rental for 60 years.

 The Bylaws 
  • create tiny rentals at very high rents. 
  • result in the demolition of old stock “affordable rental housing”  being replaced by expensive housing.
  • create an incentive for developers to decrease the size of the units while simultaneously increasing the rents. 

The rental rates in the bylaw are based, not on average rates of all existing old and new units, but on average rental rates for new construction in Vancouver (regardless of size or location) as determined by CMHC in its annual Rental Market Report. If a
verage rates had included both new and existing rental stock they would have been set significantly lower. 

Developers are given  tax breaks and  density bonuses for creating tiny expensive units. Vision’s argument is that they are affordable by virtue of being “rental” as opposed to ownership. As they age, so the argument goes, the rents will drop.

Substandard housing is the market's response to substandard incomes. 

The fact that the maximum rents are based on average rents for new construction in Vancouver allows developers to create very high-end rental housing in less expensive neighborhoods. Thus a 500 sq. ft. one-bedroom unit in Marpole or East Hastings for example, where the average rents according to CMHC are 850 and 893 respectively could rent for $1,500 a month and meet the definition of affordable rental housing. A 700 sq ft. two bedroom unit could rent for $2,000 a month and meet the definition of “affordable rental housing” even though the average rents in these areas for a 2-bedroom is $1,122 and $1,179 a month respectively.

The City claims that these units are “affordable”  because the City’s target, moderate income earners ($21,500 to $86,500), can theoretically rent them without paying more than 30% of income. But low income and even moderate income earners on the lower end of the moderate income spectrum ($44,000 per year or less) and median income renter households (approximately $35,000) could not even rent a studio at the City “affordable rents” rents without paying more than 30% of income.

Vision's effort to provide affordable housing brings to mind Alice in Wonderland:

Would you tell me, please,which way I ought to go from here?
That depends a good deal on where you want to get to.
I don't much care where-
Then it doesn't matter which way you go.

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