MAYOR ART PHILLIPS 1930 - 2013

Art Phillips truly was a colossus. He surrounded himself with brilliant people. His TEAM Council was a mix of the best and the brightest across the political spectrum and included academics,  professionals and community activists. In the first election, in1968  Phillips and Walter Hardwick were elected. 

In the next election May Brown, Marguerite Ford, Darlene Marzari and Mike Harcourt, physicist, Fritz Bowers, Traffic Engineer Setty Pendakur and Architect Geoff Massey.  

They were a team that had more collective intelligence and talent  than any level of government in Canada since. 

Unlike so many politicians who turn to Machievellian principles, Phillips achieved control through a combination of blazing intellect, wit and charm.

He was also tough, sensible and decisive and not afraid  of changing his mind.

Phillips and his council are remembered for a series of major initiatives that set the tone for the next forty years. 

·        Flexibility was introduced into the planning and design process;

·        planning became  neighborhood based

·        cultural institutions flourished including the Vancouver East Cultural Centre  (the "Cultch"), the Academy of Music, the Contemporary Art Gallery, the Childrens' Festival; heritage areas and policies; the Orpheum theater was created from a movie house that would have been demolished.

·         the bureaucracy was overhauled;  

·        The property endowment fund was set up. 

·        Although Granville Island was an initiative of the Federal Government, TEAM and in particular, Mayor Phillips and Walter Hardwick made significant contributions.

·        Until TEAM the City had no heritage preservation policy. Under TEAM one was introduced.

Phillips and TEAM took control in 1972 (elections were every two years) the old council was mostly turfed and a new TEAM Council was elected.  The two NPA members who remained were excellent Councilors.

There were two City Managers at that time called The Board of Administration. One was an Engineer named Lorne Ryan. The manager in charge of Planning, was the Imperious Gerald Sutton Brown. He  ran a tight ship. He was also a brilliant planner and administrator in his own right.

The first thing Phillips and Team did was to get control of the bureaucracy. They fired the City Manager, Gerald Sutton Brown.  Ray Spaxman, an architect,  was hired from Toronto as Planner.  He was an advocate of neighborhood planning.

Prof. Fritz Bowers, later become the City manager.  Prof. Bowers ran City Hall like a University dean. Power was decentralized.  The morale of the staff greatly improved. 

As to Sutton Brown he told me that being fired was the best thing that ever happened to him.  He was promptly hired by Mobile Oil  as head of its massive real estate branch. He planned new cities all over the world. 

When Mayor  Phillips retired a  roast was held.  I wrote a poem for him  which touched on the unpredictability of life and plans. It was read at the party. The opening three verses were:

“You Never Can Tell”

Remember the day you deposed Sutton-Brown?

The words spread like measles all over the town,.

You were quite ruthless to make him step down

How could you do this

To that helpless old toothless?

But as it turned out his career didn’t spoil

He was hired to plan towns for Mobile Oil

He travels to places wherever its sunny-

The way it turned out, it was funny.

You never can tell, you never can tell

What wonderful fortunes can spring from the well

Of potential disasters

That turn out quite swell

Till the end, you never can tell

The first symbol of the Phillips administration was the information booth in the entrance to City Hall.  Until then  a visit to City Hall was a Kafke-esqe adventure.  There was no way of knowing where you needed to go and once you got there what to do.  There were no signs.  Many offices had no receptionists. After that they opened up Council and Committee meetings so that people could attend outside of their normal working hours.

TEAM produced Vancouver’s first urban core bike network when it closed streets in the West End. It also introduced traffic barriers in Shaughnessy making streets both pedestrian and bike friendly. The plan and the process yielded exceptional results.  

Vancouver became one of the very few Cities with a livable high density core under a plan that was neighborhood based. Similar Official Development Plans (ODPs) were created in Shaughnessy, the Downtown, Downtown Eastside, False Creek, Coal Harbour.  Phillips was not a micro manager but he kept a watchful eye over them all.

God is in the details.

Before Phillips’ TEAM, apartments could not have balconies because the zoning penalized the developer who sought to add them.  Under TEAM there were enormous improvements in design and siting. 

Phillips  recognized that substandard buildings were the markets’ response to substandard incomes.  Policies were implemented to provide affordable housing of a reasonable size and quality.

Phillips set up  the system of discretionary zoning that enabled more control over citing and design including view preservation. 

Before Phillips there were no sidewalk cafes on City Streets.  He led the initiative to lease portions of sidewalks to adjacent restaurant owners.

He encouraged debate on Council. He was confident in his own abilities and those of his colleagues that he welcomed all sides on all issues. He did not impose party discipline because he did not need to.

After 4 years (two terms) the City was on track.  Phillips declined to run again. He returned to his investment business. 

He was a great man.

EMPTY CONDOS AS CURRENCY - THE YAN REPORT

Last week a UBC adjunct professor, Andrew Yan, gave a speech in which he claimed that there were a huge number of condos in Vancouver that were vacant.  Francis Bula reported the story in her blog and in the Globe and Mail. The numbers are startling:

“Downtown, the rate is so high that it’s as though there were 35 towers at 20 storeys apiece – empty!”

http://www.theglobeandmail.com/news/british-columbia/vancouvers-vacancies-point-to-investors-not-residents/article10044403/

The big story in all of this is that it was a story at all.  Everyone knows there is a problem. It is not the Chinese. It is our own government.  Vancouver’s media, mired in political correctness,  have not dared to speak of it.  

China’s Real Estate Riddle

It is, however, no secret in China. An article appeared in the Far Eastern Economic Review in June 2009 by Patrick Chovanec, China’s Real Estate Riddle” http://chovanec.wordpress.com/2009/06/11/chinas-real-estate-riddle/] Chovanec,  a professor at Tsinghua University's School of Economics and Management in Beijing, China describes a phenomena that is all too familiar in Vancouver:

[Why] the seemingly endless rows of luxury megaliths you can see sprouting up in every provincial capital or third-tier Chinese city worth its salt, with nary a resident in sight. Beijing has no monopoly on ghost-condos.

One possible key to this riddle occurred to me after I heard about the Chinese tour group that recently (and famously) traveled to the United States hunting for post-bubble real estate bargains. I heard that one of the reasons they returned empty-handed was that they were shocked—shocked!—to discover that in the U.S., property is taxed annually on its value. China has taxes on real estate transactions, but no recurring tax on holdings. The group’s discovery, and their disappointment, got me thinking.

He observed that the U.S. tax system creates strong incentives for residential property owners to either use it to live in or to generate income by renting it to others to live in, and penalize them for letting it stand idle.

That is not how it works in China. Chovanec continues: “In China,  real estate—occupied or not—offers them a visibly reassuring place to park their money, sheltered from inflation. *** with little or no holding costs, Chinese owners are unconstrained by the need to make the property “pay” in cash or in kind. For them, an empty condo is a store of value, much like gold, another asset that performs no practical function besides retaining its worth.”

Apartments in China aren’t for living in, they’re for investing. That is the real source of demand.

 A  year ago in the Courier on April 5, 2012 Alan Garr set everyone straight:

"Blaming Chinese  high house prices  is racist"

If you believe that house prices are being driven up in Vancouver because realtors are catering to wealthy offshore Chinese you are living in a fictional world. It is happening in our city's housing market, but it's statistically insignificant.

http://www.vancourier.com/columnists/Blaming+Chinese+high+house+prices+Vancouver+racist/6417310/story.html

Yesterday, Gary Mason opined on the Yan report that there just isn’t enough evidence. [I trust he accepts that Japan was hit by a Tsunami without demanding further studies.] In a paragraph that gives meaning to the term fatuous, he said:

“I also find it amusing that we get so up in arms about “foreigners” buying up our real estate but think nothing of the thousands of Canadians who have poured into the United States in recent years to take advantage of the housing mess down there. Does anyone doubt that many of those same Canadians are buying those condos as investments in the hopes they’ll cash in once the market returns to normal? Do you hear Americans crying foul?”

http://www.theglobeandmail.com/news/british-columbia/the-great-unoccupied-condo-scandal-get-over-it/article10251782/

Vancouver residents may not be so amused. It is one thing to buy into the depressed market in Phoenix or any other part of the Arizona desert to have a vacation home.  It is quite another to block the  views of existing residents with an inflation hedge.  Buying houses in neighborhoods where mortgages are in default has a different impact on a community from what has happened to Vancouver.  Here investors have bought up well-established,  heritage areas, demolished the houses to put up even larger ones. Home  owners have been forced to increase density, by building houses in their own back yards so they can afford to live in their own neighborhoods.

It is time to deal with it.

It does not matter whether it is the Danes or the Chinese who are bringing about the change. What matters is that the government should address the issue. They may conclude that every cure is worse than the disease but they still need to look at it. 

When the resort municipality of Whistler was developed in the early eighties, it was anticipated that wealthy Europeans and Saudis would aquire all of the units. They would remain empty most of the year and the retail stores could not survive.  Covenants were therefore placed on title to require them to be placed in a rental pool to ensure that they were occupied.

All three levels of government need to review the possible interventions.  We will need a home-grown solution but a good start would be to study what other countries are doing. 

The French government under President  Hollande is threatening to requisition vacant apartments.

http://www.zerohedge.com/contributed/2012-11-01/desperate-french-government-threatens-%E2%80%9Crequisition%E2%80%9D-vacant-buildings

The following summary comes from the CBC.

http://www.cbc.ca/news/politics/story/2012/03/17/f-real-estate-foreign-ownership.html

China imposed new restrictions on property sales in 2010 —

• Foreigners can own only one residential property for their own use (permanent residents are restricted to two properties).

• Foreigners must reside in the country for one year before they can buy property.
• Foreign companies who buy commercial real estate must use it themselves.

Australia

The following restrictions apply to foreigners:

• Foreigners — regardless of whether they are temporary residents of Australia or live abroad — are prohibited from buying existing housing stock (homes that have been previously owned or occupied for more than 12 months) for investment purposes — i.e. as a rental or vacation property.
• The exception to the above rule is if a foreigner buys existing housing stock that they plan to demolish and redevelop. The property must be redeveloped within two years, and the redevelopment must increase the number of housing units. The property cannot be rented out prior to the redevelopment. The new property can be rented out, sold or used by the owner.
• Foreigners temporarily residing in Australia can apply to buy one piece of existing property to use as a residence provided they sell it when they leave Australia. This provision was meant to address complaints that Asian investors buying property for children studying in Australia were outbidding locals and holding onto property after their children left the country. These are some of the same complaints being raised currently in Canada.
• If foreigners buy vacant land for residential development, they have to build on it within two years and are allowed to rent out, use or sell the built properties.
• There is no limit to the amount of newly constructed real estate foreigners can own as long as the property has not been marketed exclusively to foreigners overseas. Such property can be used as an investment.

Switzerland

Swiss real estate is some of the most coveted in the world, but the country also has some of the strictest rules when it comes to foreign ownership.

• The government assigns annual quotas to the country's cantons limiting the number of houses or flats that can be sold to foreigners who do not reside in Switzerland. Each sale must still be authorized by the canton in which the property is located, and the cantons can set their own additional restrictions. Many limit foreign property sales to tourist regions, for example, or allow foreigners to purchase only property that is already foreign-owned.
• Foreigners can buy only one property to be used as a holiday home or a secondary residence. They cannot purchase a property for the sole purpose of renting it out, although holiday homes can be rented out periodically on a short-term basis.

• In some cantons, foreigners are barred from selling their property for a certain number of years after purchasing it — generally between five and 10 years.
• If foreigners buy vacant land, they must build on it within a year.
• Foreigners who live in Switzerland do not need to get prior authorization to purchase real estate that will serve as their main residence and can rent out the property or use it as a holiday home if they move to another part of the country.

Douglas Todd observed in a Vancouver Sun article yesterday that "one of the strongest factors working against coming up with a working solution is there is no solid data on which to base a strategy."  

He is partly right. Both truth and lies can be presented more effectively when grounded in statistics backed up by studies. I note, however, that Mr. Todd in his columns on religion can be very effective based on faith alone.

http://blogs.vancouversun.com/2013/03/23/vancouver-real-estate-the-fog-of-foreign-ownership/

THE COMMUNITY INFORMATION MEETING

Last night I made my way to the Dunbar Community Centre to attend an information meeting about the rezoning of Stong’s Grocery – Dunbar’s favorite store.  

The Developer’s architect explained to 15 or so people that this was one of a series of meetings that he was carrying out to determine the will of the people.  

Democratic traditions die slowly.  

Earlier meetings had shown that based on similar numbers, the community of about 20,000 Dunbarians considers it most important to keep Stong's in Dunbar.  According to the Architect, the people also wanted higher density because that would be good for business and the environment.

The presentation consisted of a tasteful matrix of issues presented in pleasing, mostly greenish, colours.  The most important thing we needed to know was that what was good for the developer would be good for the community.  Keeping Stong’s grocery presented special challenges though since it didn't own the land.  It was a sub-tenant  from a larger food chain, but mysteriously,  it could only be done by adding more stories to the building.

The architect said that he would answer questions and that his staff would then reduce the comments to a new set of  pie charts to smash into the faces of the audience at the next community meeting.  I took it that he thought the brighter members of the community were inexorably marching along to the drummer of increased density.  

The building had not yet been designed.  The good news was that whatever its size, it would it would be on the Suzuki side of climate change, carbon footprints and endangered species. While geothermal energy was not yet planned, they could recycle energy from refrigeration to supply heat.  One of the residents was annoyed  that all of the landscaping would be in shadow and therefore would quickly die.   The architect dismissed a suggestion of fake plastic flowers and trees after noting that they are actually doing that in some places, but evergreens are better. 

The City Alchemists

The baseline for the building he explained was the present C-2 zone.  That allowed a four story building.  However, a development in compliance with the present law, i.e. 3 stories above what was already there could not possibly happen.  It is important to understand why.

Vancouver bureaucrats have achieved a tremendous breakthrough in the technology of  spinning soil into gold.   They zone land, say Dunbar Street, to allow a 4 story building.  Then when the Developer proposes a 4 story building the City says, that although 4 stories are permitted they cannot allow it. The Developer has to build to 5 stories or more.  The bigger the better.  We will up zone you to make this possible, but – you will have to pay us about $800,000 for the up zoning.  The kick back is called a community amenity charge. 

Zoning Bylaws have become like politicians - negotiable instruments that are regularly bought and sold. 

The meeting moved along briskly.  The architect asked what amenity we wanted.  He needed to know so he could fit it into his amenity -floor space ratio- matrix chart for the next meeting.  One of the younger neighbors said, “the best amenity would be the one we are losing by your development. We would want that back.”