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A condo tower under construction, centre, is seen in downtown Vancouver on April 15, 2020.

DARRYL DYCK

The Housing Vancouver Strategy needs a serious rethink because it is based on flawed population projections that are pressuring the City to develop more market housing than it needs, say housing experts.

Councillor Colleen Hardwick’s motion to recalibrate the Housing Vancouver Strategy (HVS) was expected to go before council this week.

In 2017, the previous council responded to the city’s affordability crisis with a 10-year strategy that aimed to create a greater supply of rental and social housing, a diversity of housing types, and discourage speculative demand that had driven prices. The plan included a target of 72,000 new homes, of which nearly half would accommodate households earning less than $80,000 a year.

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Ms. Hardwick and several others question the HVS’s goal to build 72,000 new homes of all types in the city between 2018 and 2027. They argue that the target is based on a flawed projected population increase of 158,400. That’s twice the historical rate, based on census numbers, and post-pandemic, there is no reason to believe that the population will drastically grow in the near future.

It’s an important distinction, they say, because the projected need for 72,000 homes guides housing policy.

David Ley, geography professor emeritus at the University of B.C., studies global housing markets. Dr. Ley said policy based on such a high projection leads to massive changes of the urban fabric, which is what the city has already endured.

“I think what the 72,000 [figure] does is set in orbit a whole series of policies and practices, and they include seemingly relentless condo development and the demolition of affordable rental units and spot rezoning, which is destabilizing neighbourhoods. And Vancouver residents voted exactly against that policy in the last civic election.”

The projection puts pressure on the city and construction industry, and the higher demand drives land and construction costs, Ms. Hardwick says. And it could give developers too many benefits at the expense of carefully considered city planning, particularly postpandemic.

“What has been perpetuated through all of this is a scarcity narrative, saying we don’t have enough housing supply and there is a housing shortage. And there is no evidence there is a housing shortage,” Ms. Hardwick said in an interview.

There is definitely a shortage of housing that is affordable to average incomes. But the current drive for market housing, she argues, does not clearly address affordability.

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“I’ve been asking the City for the real data. How much do we have in the pipeline at each stage? Because every time we do a rezoning, we are creating a new highest and best use on that piece of land.”

The HVS was created in 2017, immediately following a record year for real estate sales in the city. Based on census and Canada Mortgage and Housing Corporation data, in the 20-year period prior to the HVS, new housing units were coming online at a rate of about 4,000 new units a year. However, in 2016, there were nearly 9,800 housing starts within the city, despite the fact that the population only increased by 6,000 residents, Ms. Hardwick says. The City typically considers a household to be two people a unit, so it was building for three times the population.

“So why did we set in motion the building of three times as much housing as we actually would reasonably need based on the data? The answer can only be because we have been building for a non-resident population,” she says.

It later became clear that much of the demand was for speculative or long-term investment. Last year, new government data showed that 46 per cent of Vancouver condos are rented out, used as a secondary residence, or left empty. But investor-owned housing is nothing new. The City of Vancouver’s own Condominium Rental Study from 2001 to 2009 showed that the rate of investor ownership in 2001 was 34.7 per cent.

Considering that high level of investor ownership, and no reason for a major influx of immigration, Andy Yan, director of Simon Fraser University’s City Program, says he’d like to see a break down of the projection, and where the demand is coming from.

“What is that number based on? The City should be able to explain their assumptions, as opposed to citizens having to figure it out,” Mr. Yan says.

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Ms. Hardwick has asked city staff to explain the source of the projected figures, and she has yet to receive an answer. The city declined to be interviewed for this story until after the motion came forward, which was likely to be late Wednesday.

In a council meeting from January, 2019, Ms. Hardwick asked assistant director of planning Dan Garrison to explain the projection. The exchange was posted to YouTube.

Mr. Garrison responded that the target isn’t just about growth, but about including the right type of supply, including affordable housing.

John Rose, a geography instructor at Kwantlen Polytechnic University who’s studied housing supply, had planned on speaking in support of Ms. Hardwick’s motion. He said there’s a lot to commend in the HVS, including recognition of the role of speculation. But he said the city’s population projection far exceeds projections from the Metro 2040 Regional Growth Strategy and that disparity shocked him. The Metro document, adopted by 21 municipalities including Vancouver, estimates total housing demand for Vancouver at around 32,000 units for roughly the same period as the HVS. That’s half the HVS projection.

“This COVID-19 crisis has really illuminated the need for governments to be trusted … and a big part of trust is having figures that are transparent and justifiable,” Dr. Rose said. “So in the context of this Housing Vancouver Strategy, it’s a real problem, because you start to question these numbers. You don’t know where they came from.

“There were issues prior to the COVID crisis, with data, with the goal. But now of course the crisis and potential impacts on immigration and population growth and economic development means that the Housing Strategy is even more pressing. There are issues that need to be critically examined.”

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So far, the City response, he says, seems to suggest that affordable housing isn’t possible without the high targets. He said the implication of building so much housing is to sell a hefty percentage of units to the highest bidders, which then subsidizes the supply of units for local income earners.

“Why is it necessary to have targets of construction that are way out of line with population growth to actually get to housing that is affordable?” he asks. “Why does it take what sounds to be like a giveaway to get housing that meets the needs of local residents?”

Ian Crook, who’s part of a citizens group that opposes a 28-storey tower at Broadway and Birch, said that if the city response in trying to reach such a high target is offering development incentives, then that’s a loss to communities.

“The city is facing a fiscal crisis as a result of the COVID-19 pandemic. There is clearly a need for additional rental housing in the city. However, every dollar the city foregoes by way of, for example, development cost levy waivers and community amenity contribution payments, has to be made up from another source,” he wrote in an email.

Elizabeth Murphy, project manager and former property development officer for Vancouver and B.C. Housing, has been publicly calling for a revised housing strategy for years. The new council is following a direction that had been approved by the former Vision council, she says.

“They are pushing these enormous projects to get a minor amount of questionable affordability, and it’s setting huge precedents of increased land value – and that will potentially lose more of the affordable rentals than it would gain,” Ms. Murphy said. “It affects the land all around each one of the projects that they are doing. So how much net affordability would we actually lose?”

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The agenda included two other motions submitted by Mayor Kennedy Stewart that would smooth the development process. Currently, development approvals require an applicant to make an inquiry before submitting a development application. Mayor Stewart moved to make that a voluntary step instead of a mandatory one.

He also submitted a motion to rescind a previous council decision requiring one-to-one replacement of rental housing units in commercial zones. In his motion submitted on Tuesday, Mayor Stewart cited the impact of the requirement on “land value, development and the ability to meet the City’s Housing Vancouver targets.” On Tuesday, he withdrew the motion.

Mr. Yan says we need specifics on those targets before policy decisions are made, particularly if it involved fragile existing rental stock. He said they represent the last of truly affordable rental stock. Those buildings include entire rental buildings and rentals above stores.

“What are the characteristics of the demand you are looking at?” Mr. Yan asks. “Let’s break it down. We need transparency.”

Economist Mohamed El-Erian says that the coronavirus shutdown will create a buyer's market for real estate, offset by reduced incomes putting stress on the whole sector. El-Erian was in conversation with Rudyard Griffiths from the Munk Debates. The Globe and Mail

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