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  • Developers of luxury condos can't fix the affordability problem

    Leslie Campbell

    A lack of balance on a June housing forum provides food for thought as to where the community needs to look for answers.


    DID YOU KNOW THAT VICTORIA is the “hottest” ranking “luxury primary housing” market in the world? According to Christie’s International’s Luxury Defined 2018 report, we beat out Paris and Washington DC and every other city due to our strong year-on-year luxury sales volumes and high domestic demand during 2017.

    At first blush this might seem rather exciting, something to be proud of. But earning this distinction means a lot of local homes are being bought up by wealthy folks from outside BC; Christie’s mentions an upsurge in buyers from the US and China.

    The building boom, here and elsewhere in BC, is obviously fuelling the economy: real estate is now BC’s largest industry by GDP, and construction is #2. Together they are about one-quarter of the economy—larger than Alberta’s oil and gas sector.

    But such glories come with a price. Besides being in danger of the bubble deflating, neighbourhoods and citizens are feeling squeezed as lower-cost units are demolished and replaced with taller buildings offering condos that most in the neighbourhood could never afford. The building boom corresponds with (some argue, has caused) a rise in all housing prices, from rentals through condos, from one end of town to the other. Victoria is now one of the least affordable cities in Canada.

    So perhaps it shouldn’t be surprising that the provincial government, besides funding non-profit housing, has brought in measures to “cool” the hot luxury real estate market. These include taxes like the foreign buyers tax, a school tax on properties over $3 million, and the poorly-named “speculation tax.”



    Promontory, one of several luxury condos in the Mariashes' 20-acre Bayview Place development in Victoria West.


    How those in the development and real estate industry feel about these taxes, particularly the speculation tax, was on full display at a June 12 luncheon presented by Kenneth and Patricia Mariash, owners of Focus Equities and developers of Bayview Place. It was misleadingly entitled The 2018 Global Issues Dialogue: Exploring the BC Housing Crisis. Marketing materials listed Kathryn White, CEO of the UN Association of Canada, as a host, and promised to “identify practical and realistic solutions that address housing affordability.” As it turned out, it was mostly a venting of grievances against new taxes and regulations standing in the way of ever-greater development. Even former Saskatchewan Premier Brad Wall was there for some reason, telling us, “It’s the economy, stupid.”

    Enough people complained to the UN Association of Canada about its involvement in the event that it issued a series of clarifying tweets, one stating, “UNA-Canada did not sponsor the Kenneth W. and Patricia Mariash Global Issues Dialogue. Rather, we were the charity of choice.”


    THERE WERE ABOUT 300 IN THE AUDIENCE, which included many mayors, councillors and other big-wigs from the region. During the three hours we heard over and over again from the eight male speakers that the speculation tax was wrong-headed. Mariash said buyers were now “running scared” because of the Province’s new tax. BC now stands for “bring cash.” He also criticized the City of Victoria for years-long permitting processes, which he says can add $250,000 to a housing unit’s price. His most surprising remarks centred around how he first heard about Victoria many years ago in LA, and was told “Victoria is on the no-invest list” due to Councillor Pam Madoff. This was all before Mayor Helps gave a short “greeting” from the City of Victoria, assuring the audience that approval times are now down to 6-8 months in 90 percent of cases.

    One of the forum’s panelists, Jon Stovell, CEO of Reliance Properties (developer of the Janion and Northern Junk properties) and chair of the Urban Development Institute, rattled off all the taxes now faced by his industry: the transfer tax, vacant property tax, speculation tax, school tax, GST, along with the mortgage stress test, which itself is taking many out of the market, he claimed. Even with all these, he noted, we still haven’t done anything to fix the supply.

    One of the main speakers did at least mention what was needed to do that. Mike Harcourt argued that the lack of affordable housing is not a crisis so much as a permanent condition given global realities, including population growth and climate change. While he admitted city halls need to speed up approvals, and that the speculation tax “needed a second look,” Harcourt argued the solution is mostly about building affordable housing, and that the NDP government was on the right track with its commitment to build 114,000 new housing units over the next decade.

    No one on the panel offered any ideas on how to accomplish this beyond letting developers continue unfettered with what they do best.

    During the short Q&A, there was at least one dissenting voice. Nicole Chaland commented, “Many of us locals have noticed the intense building boom has corresponded to the greatest housing unaffordability…Increased supply doesn’t seem to be the most reliable way to meet the challenge.”

    Panelist Michael Ferreira of Urban Analytics attempted a response by pointing out the “compounding of demand” with people wanting to live in cities, investors wanting to get into the market, and people like him who want to jump in and buy another house to ensure their adult children have a place to reside. “Supply is part of the solution,” he concluded.

    But supply of what—more million-dollar condos? The developers’ own construction workers must find it difficult to afford decent housing here, not to mention the service workers in restaurants and shops. Even younger people with well-paying jobs fear getting permanently shut out of home ownership.


    NICOLE CHALAND WOULD HAVE ADDED BALANCE TO THE PANEL. The former director of sustainability at Simon Fraser (2007-2017) is so immersed in community activism right now, she’s put aside plans to start a business until after the civic elections in October. She sits on the Fairfield Neighbourhood Plan Working Group and on the steering committee of Cook Street Village Residents Network.

    I contacted her after the event and she sent me an op-ed she and Sheldon Kitzul penned in response to the forum and sent to the Times Colonist. In it they wrote, “This was not a genuine exploration of what possible policy solutions are available to solve the housing crisis. Far from it. This was a temper tantrum; a fist-bumping anti-tax political rally featuring an all-male panel of developers and former politicians.

    At no point did any speaker give us the impression that they had actually read and understood how the speculation tax works. At no point did anyone explain that one could simply avoid paying the tax by renting out their second home for six months, by selling their expensive home and buying one that is less than $400,000, or by making BC their primary residence and paying income tax like the rest of us.”

    (Perhaps unsurprisingly, the T-C didn’t publish Chaland and Kitzul’s op-ed. The T-C’s before and after coverage of the Mariashes’ forum, along with three pages of puff pieces on the Mariashes last November, and a recent op-ed by Mariash, not to mention the big golf tournament the paper and Bayview jointly sponsor, all testify to the cozy relationship Mariash enjoys with the city’s daily.)

    Chaland does not believe there will be any leadership from the private sector in addressing the lack of affordable housing. She wants the Province to “stay the course” with the new taxes. She is also advocating that the City of Victoria demand more from developers in the way of “Community Amenity Contributions” in return for rezoning and density approvals. A draft report she’s written states: “From 2016-2017, Victoria’s approach to CAC’s generated $3,086,000. Some analyses suggest that, given our current building boom, we’re missing out on tens of millions of dollars. This would pay for affordable housing, new parks in the Downtown core and childcare—all amenities which are desperately needed in Victoria.”

    Chaland told me the City’s Director of Planning Jonathan Tinney seems overly cautious in his insistence that all such CACs must be voluntary. This is not the case in other cities, noted Chaland.


    IN OUR CONVERSATION, Chaland referred to research by John Rose, an instructor in the department of geography and environment at Kwantlen Polytechnic University. He would have been another great addition to Mariash’s panel of speakers.

    Rose’s research paper “The Housing Supply Myth” seems hard to refute. Rose reviewed the rate at which housing cost increased between 2001 and 2016, alongside how wages increased. He did this for 33 cities across Canada, using Statistics Canada data. He found that in most cities during those years, the rate at which housing costs increased was never more than double the rate of wage increases—a situation that would still degrade affordability. But Victoria’s housing increases were almost three times those of wages. In Vancouver they were six times more.

    More number-crunching around building volumes allowed Rose to conclude: “the expensive markets are providing not only enough units to satisfy growth in the number of households between 2001 and 2016, but to also provide (in absolute terms) surplus units to the market at rates comparable to (indeed, slightly higher than) less expensive markets.”

    He continued: “In all of the seven ‘severely unaffordable’ markets where housing affordability degraded most significantly between 2001 and 2016, the relative amount of surplus dwellings, as a percentage share of total dwellings, increased in number.” Or, as he put it in a Globe and Mail interview, “Here [in Vancouver] we’ve had more than enough supply and yet the housing costs have gone crazy.” The same is true of Victoria. Here, as Chaland told the luncheon audience, over the past 15 years, for every 100 new residents, 113 new units of housing have been added.

    Other researchers looking primarily at Vancouver’s luxury housing boom have argued that a good number of new buyers of luxury homes are foreign buyers, some of whom are merely “parking” or laundering money this way. It is this global trend that is leading the Province to implement taxes and a just-announced public registry of who owns real estate in BC. Said Finance Minister Carole James, “Right now in BC, real estate investors can hide behind numbered companies, offshore and domestic trusts, and corporations. Ending this type of hidden ownership in real estate will help us fight tax evasion, tax fraud and money laundering.”

    It could well be that such regulations and taxes will not lead towards more affordable housing. But as the research of Rose and others makes clear, neither will unfettered development. The market has proven that, at least given the current global scene, it cannot be relied on to provide what is most needed by BC citizens: affordable housing.


    THE CRD RECENTLY REPORTED that this region needs 6,200 affordable units. Since these are unlikely to come from the private sphere, Mariash would have served his audience better by including in his speaker lineup some of the knowledgeable people building non-profit housing: Kaye Melliship, for instance, the executive director of the Greater Victoria Housing Society, an organization that has quietly been building non-profit housing for low-wage workforce members, people with disabilities, and seniors for decades. In 2018 the organization earned the “Non-Profit of the Year” Award. Among its 16 properties is Pembroke Mews, an apartment building geared to low-to-moderate income workforce tenants. Built in 2012, it is on the fringe of Downtown and offers 25 apartments on 2 floors above commercial space. Rents are pre-set and tenants are selected with an income no higher than $33,000.

    Other agencies in the non-profit housing sector locally include Pacifica Housing with 36 buildings on the Island, Cool Aid, which runs 15 supportive housing buildings, and Greater Victoria Rental Development Society (which built the Azzuro on Blanshard and the Loreen on Gorge Road E.)

    It’s in finding land for organizations like these, easing their approvals through local governments, and donating funding, that affordable housing will primarily be realized.

    But private developers can get in on the action too. If Mariash had included David Chard or a speaker from BC Housing, we might have heard how private developers could build something like Chard Development’s Vivid on Yates Street. Chard partnered with BC Housing to make the 20-storey, 135-suite condominium project affordable for lower-income and mid-income buyers: they have to have a household income of less than $150,000 and commit to being the primary tenant of their home for a period of two years. Its below-market pricing—condos start at $289,800—was made possible through favourable lending terms backed by BC Housing. Only a dozen units remain unsold.

    Another source of knowledgeable panelists is the BC Non-Profit Housing Association (BCNPHA), an umbrella group that has produced an “Affordable Housing Plan” with a ten-year roadmap towards sufficient affordable housing across British Columbia. Its extensive research shows exactly what we need and how much it will cost. After dealing with the backlog of nearly 80,000 units in BC (2016), an additional 3,500 affordable units will be required annually on average. How much will that cost? An estimated $1.8 billion per year over the next ten years. It’s a lot, but according to the organization, the non-profit housing sector “can bring $461 million to the table annually through land contributions, leveraging equity from assets, private donations and financing. This requires the provincial and federal governments to each commit an average annual investment of $691 million over the next ten years.” It notes the governments’ portions are not dissimilar to what they already committed in both the 2016 and 2017.

    This sounds promising. But how is it working out as developers buy up more and more land for luxury housing and inflate land values? Are non-profits being priced out of the core area, thereby threatening the diversity that makes a city vibrant—and making it harder to solve long-term transportation and emissions challenges? Will Downtown be transformed into a resort town where more and more people are just passing through?

    BCNPHA’s Policy Director Marika Albert (formerly director of the Community Social Planning Council of Greater Victoria) would have been perfect on the panel to address some of these questions.

    Finally, another obvious choice for any discussion of affordable housing in BC would have been either Carole James or Minister of Housing Selina Robinson. Either could have discussed the government’s 30-Point Plan for Housing Affordability, which includes building 114,000 units over the next decade, along with various measures to dampen speculative-type investment. The ministers could have enlightened us about the new Building BC Community Housing Fund to which municipalities, non-profit groups and housing co-operatives can apply for funding of their affordable housing projects.

    Ken Mariash is obviously a man of many talents. It takes a visionary with much business acumen to take on a project as large, costly and complex as the 20-acre Bayview site. But his dream project—and the projects of other luxury resort builders—are having the effect of driving up land costs. And they are taking up too much of the City of Victoria’s time and attention. Our civic leaders’ and workers’ efforts needs to be directed toward assembling land—at 100 units per acre, 70 acres would be enough—in parts of the City where denser, far more affordable housing can be created. The CRD accepts that 6200 affordable homes are needed. Let’s focus on that.

    Focus editor Leslie Campbell has lived through a number of real estate boom-times in Victoria. This one feels different.

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    Leslie Campbell’s July/August editorial, Developers of luxury condos can’t fix the affordability problem, presents an informative, insightful assessment of Victoria’s housing affordability crisis, and offers options re the City’s future needs.

    Observations and Reflections:

    The recent gathering of prominent building-boom players and politicians who enable and protect their interests at the expense of the public good, is aptly characterized as simply a venting of grievances against new taxes and regulations standing in the way of ever-greater development. Like most risk-taking entrepreneurs who rely on leveraging other people’s money, they’re content when they can have their cake and eat it too!

    Not surprisingly, stakeholders had precious little to do other than hand over the City’s keys to those who build premium-priced homes; this, to fulfill a vision of perpetual growth, unlimited prosperity, and enviable progress.

    Their allies, from mayors to council members, premiers to prime-ministers, all sing the same song of praise about the glory of the Gilded Age. They play their parts well in this orchestrated pageantry of profit-making. By approving a stream of land use and development deals to guarantee lucrative housing projects, they keep the capital flowing. Behind closed doors, other experts launder the gains, or transfer their financial returns into off-shore safe tax havens, away from the prying eyes of Canada Revenue Agency.

    Commitment to public engagement, scrutiny and accountability seems only a fig leaf as politicians and property interests collude to keep the zero sum shell game alive and well for a handful in the winners’ circle. The growing list of losers in this profitable global housing market, includes not only the homeless of our society, but indebted households who barely make ends meet; many are renters facing eviction and displacement due to demolition of older affordable rentals and redevelopment of housing stock as expensive condos and townhomes beyond their ability to pay.

    What’s clearly revealed here is that none of the urban planning policies and strategies embraced by municipal politicians has yielded positive and enduring outcomes.  Despite their campaign promises to build decent, affordable housing, the facts say otherwise. Their pledge is to protect and enhance property owners’ interests. They sacrifice the benefits of development to acquire needed public amenities, or provide millions of dollars worth of tax- exemptions to hundreds of downtown heritage property owners, all of which are paid for by the remaining taxpayers of the City.

    Likewise, Council’s decision to remove limits on housing unit size, reduce parking requirements, eliminate rezoning requirements to build garden suites, fast-track rental-housing approvals, or regulate short-term rentals to protect the existing affordable rental housing stock. None of these has eliminated homelessness or ended the housing crisis. As one irate taxpayer recently said, Council’s deliberations and decisions have more in keeping with the time-honoured skill of putting lipstick on a pig, rather than addressing the interests of the public whom they serve.

    Data Tells a Different Story

    Victoria’s Official Community Plan (2012) states, it is a “very compact and complete community” with the highest population density in the Capital Region. The provincial capital is also the seventh most densely-populated city in Canada, with 4,405.8 residents per square kilometer. In James Bay, one of its oldest neighbourhoods, it is three times the density for the City as a whole.

    The OCP (p. 25) indicates that: Over the next 30 years, Victoria is forecast to need designated housing capacity to meet demand for an additional 13,500 apartment units and an additional 2,700 ground-oriented housing units. Zoned land capacity analysis prepared for this plan indicates that there is sufficient zoned capacity in 2011 to just match this demand. In other words, increased densification and rezoning is not required to accommodate the anticipated long-term population increase.

    In fact, the 2009 Urban Futures Report, Managing Growth & Change in the City of Victoria 2008-2041, indicated that since the middle of the last century, Victoria’s housing stock has grown faster than its population, with an exceptionally high proportion of multi-storey, high-rise dwelling units in relation to the rest of the Capital Region. Far from a housing supply shortage, the City has increased the total number of residential dwelling units by 24.3% from 39,590 in 2001, to 49,212 in 2016. The City’s population increased 15.6% from 74,125 to 85,792 between 2001 and 2016. These figures suggest that the City has, in fact, been overbuilding to the point that according to the 2016 Census, there were 3,450 unoccupied dwelling units in Victoria (equivalent to 7% of the City’s entire housing stock). To put this in perspective: if these unoccupied homes accommodated the average household size of 1.8 persons, the City could house an additional 6,210 individuals (which exceeds the population increase in Victoria between 2011 and 2016).

    So who is on the short-end of the stick for housing in this City? The data also points out that the proportion of City tenant households has been declining from a peak of 63% in 2001 to 59% in 2016. For the past two years the City has not published housing statistics indicating the number of new housing units built—including affordable units and social housing units, number of demolitions, and the total number of tenant households displaced as a result of redevelopment. Nor has the City provided the latest homeless count conducted in spring 2018, or measured the negative impact of home-sharing businesses on the chronic shortage of affordable and available long-term rental units in the City. The absence of data portends a growing humanitarian crisis in which the majority of residents without title to property, are sacrificed in the name of prosperity made possible by the rental economy, or monopoly exploitation afforded by the sharing economy.

    In the meantime, the profitable building boom has been underway for eight years. Developers, helped by City politicians, have erected high-density downtown condo towers the City does not need. But housing is a profitable business for investors and government who are working hand-in-glove to ensure deregulation of the markets, preserving low interest rates, and doing little to stem growing household indebtedness. This is happening, while global capital finds new opportunities to satisfy the demand for luxury real-estate investment units and vacation homes which cater primarily to homeowners, corporations, and financial institutions.

    The data reveals and conceals this fact: the housing crisis is man-made. It reflects conscious choices taken by those in positions of power and influence to serve the interests of property owners and their aim which, before all else, is to maximize profit.

    Questions Without Answers

    When it comes to provincial government measures, residential property-owners receive annual home-owner grants; yet, tenants receive nothing, even though both pay property taxes. It remains to be seen whether all the new provincial levies, including property transfer taxes, foreign property surtaxes, speculation taxes etc., will be sufficient to meet the growing demand for both affordable market rental and social housing units.

    Neither providing easy financial credit to home-purchasers, nor tightening it, has solved the question of how to put a roof over everyone’s head. How is it that spending $75,000 to house a vehicle is considered a necessity, but providing a decent, safe lodging space for a modest-income person is beyond the ability of taxpayers? How is it that owners of multiple properties feel they should be exempt from paying their fair share of taxes, when those who own but one property or rent a unit, must bear the burden of the property-owners’ entitlements?

    If the City invites civic engagement, professes respect for the democratic process, and upholds majority rule, why is it that Council ignores the compelling needs of renters who comprise the majority of its households? To whom do they owe their allegiance? How does this conduct serve the public interest?

    Additional Food for Thought

    As French economist Thomas Piketty pointed out in his magnum opus, Capital in the Twenty-First Century, the dynamics of wealth-making, the deep structure of capital hasn’t really changed since the 18th century. The only noticeable shift has been from a society of predominantly wealthy rentiers (those who own enough capital to live on the annual income from their wealth) to a society of managers, (who live on income from labour), many of whom form the backbone of a stable, income property-owning middle class.



    Capital is never quiet: it is always risk-oriented, and entrepreneurial, at least

    at its inception, yet it always tends to transform itself into rents as it accumulates

    in large enough amounts—that is its vocation, its logical destination. (p. 144)



    The components of the system have not changed, only their relative proportions. It wasn’t until the end of World War II, and the long period of economic stability, that the value of housing assets increased significantly to comprise almost half the national wealth of Britain, France, Canada and the United States. And, progressive taxation was as much a product of two world wars as it was of democracy itself. The most difficult challenge? How to balance competing demands and special interests.




    Taxation is not a technical matter. It is preeminently a political and philosophical

    issue, perhaps the most important of all political issues. Without taxes, society has

    no common destiny, and collective action is impossible. This has always been true.

    At the heart of every major political upheaval lies a fiscal revolution. (p. 630)





    How can sovereign citizens democratically decide how much of their resources they wish to devote to common goals such as education, health, retirement, inequality reduction, employment, sustainable development and so on?

    Precisely what concrete form taxes take is therefore the crux of political conflict in any society. The goal is to reach agreement on who must pay what in the name of what principles—no mean feat, since people differ in many ways. (p. 631)


    Consideration needs to be given to exploring these matters further, without demonizing those who do not share accepted assumptions—narrow points of view, and ways of doing business that fail to address reality, accommodate changing needs, or resolving apparent economic contradictions and social injustices.

    Repeated cycles of war, oppression, and exploitation mean that the time has come to regulate capital in the 21st century. If our democratic institutions are to survive, we need to rethink progressive income tax, a global tax on capital, the question of public debt, and the need for greater openness, transparency and accountability.

    Victoria Adams

    Victoria, BC


    Edited by Victoria Adams
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    Leslie did a great job explaining the critical situation of affordable housing in Victoria. But this situation has been ignored for years , and it comes down to greed on the part of developers . Why would they build affordable housing (which by the waytheir workers require to live in ) when the can build million dollar condos for the million dollar retirees. 

    So now what does the average working person in Victoria have to do  to find accommodation . ?  We are faced with bidding wars on apartments , there are 15 peole lining up to view any respectable apartment .  Lack of foresight on behalf ofvthe province and the city 10-15 years ago could have prevented this crisis , and what is the region going to do in 10-15 years when all us poor working class renters need affordable senior housing . 

    As you see it is not just a current crisis - it started years ago and it will continue if someone doesnt pick up the reins and take charge  and think outside the box . There can be tiny home communities , manufactured home communities, that can be sustainable and affordable . 

    Instead of spending taxpayers money going to China to buy steel , how about checking out Sweden and Denmark on how to build sustainable affordable housing . They have had it figured out for years . 

    I would suggest each city councillor, each politician and each developer try apartment hunting, for affordable accomadation ( mot luxury accommodation) their eyes will be opened and I am sure a remedy will be forthcoming . 


    Mary Howley



    Edited by Mary Howley
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