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 assimply 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.
Quote
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.
Quote
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)
Quote
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.
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Developers of luxury condos can't fix the affordability problem
in Focus Magazine July/August 2018
Posted · Edited by Victoria Adams
REVISITING THE AFFORDABILITY PROBLEM:
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.
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.
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