April 7, 2015

The Daily Durning: Contradictory Growth

Tom Durning sends around a housing update each week. Here’s an excerpt from this week:

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Interesting take on the rate future growth by (Elizabeth) Murphy. She usually uses Vancouver as her ‘whipping boy.’  (I often wonder if even the Vancouver Sun remembers that there are other major municipalities in Metro Vancouver?).

Anyway, she questions future population growth predictions without offering any solutions as to how we can generate accurate predictions now that the Long Form census has been abolished. Can we slow down growth by restricting development? Sounds simplistic to me, especially from a planner.

On the other hand, in seeming contradiction to Ms.Murphy, an article in Business In Vancouver by a prominent realtor says the Fraser Valley is growing too fast!  (Is Surrey really part of the Fraser Valley?)

How do we put controls on development without driving prices up even higher? A great part of the in-migration to places like Langley and Mission is from other parts of Canada. Seems more and more of those folks want ‘shovel free’ winters also. Perhaps someone can pin this on Gregor too!

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    1. Here is what I sent to BIV and Mr. Moore:

      Mr. Moore:

      Please replace transit with RAPID transit and you will see that the current vision as outlined is flawed.

      No one that is using a car today will use more transit unless it is RAPID, i.e. an LRT, SkyTrain or subway. Only once car use is far more expensive and when faster alternatives exist will people use less cars. As such, the current 0.5% proposed sales tax increase will, and should, fail as it neither taxes car use more NOR delivers RAPID transit on these highly traveled dense routes:

      a) below Hastings to E-Van and then N-Burnaby, then onto N-Van
      b) to Jericho land then UBC
      c) along 41st Ave to Kerrisdale to Burnaby, connecting with Canada Line
      d) along Marine Drive in N-Van to Dundarave in W-Van
      e) to S-Richmond and Delta

      Before you ask the populace to pay more in taxes ask yourself, please:

      1) Why do we allow cars to park for free on roads ? Why not charge $200/month ?

      2) Why do we allow the use of expensive bridges, tunnels, highways or throughways for free, especially for foreign fueled trucks or Teslas that do not pay a nickel of gasoline taxes here ?

      3) Why do we allow residents to use, for free, social services, education or healthcare if they pay no or almost no income taxes yet live in million $ condos and houses ?

      4)Why do we allow public sector unions to pay – from our already high taxes – excessive wages and benefits such as extended healthcare and guaranteed and indexed pensions to people that work less and have lower risk of layoffs than comparably skilled private sector workers ?

      Only once those 4 areas are addressed AND car use is made more expensive AND more RAPID transit alternatives are available should you ask for more taxes. Until then: congestion and car use will prevail as this proposed plan will not decongest nor address the 4 issues mentioned !

      Please come back with a better plan !

      Yes to more rapid transit.
      No to this band-aid non decongestion plan.

  1. It’s a bit of a geographic anomaly — Surrey is part of Metro Vancouver (GVRD), but is also part of the Fraser Valley Real Estate Board (instead of the Real Estate Board of Greater Vancouver).

    1. Quite simply. Long form census gave population projectors the information to tune various parts of their projection model (which is not simply a straight line tool in Excel). Without that demographic information (and what we have we can’t really trust), you get a Garbage In, Garbage Out problem.

  2. I read Elizabeth Murphy’s article, and I thought she had valid concerns. I did not get the impression at all that she was saying if we don’t build it, they won’t come.

    I do agree that she offered no alternative to an accurate population projection.

    Personally, as a middle class worker, Vancouver is a bad choice. It is very expensive and has poor career opportunities. The main attraction is weather, which is bad (ie lots of rain, similar to Seattle), but still better than other parts of Canada. People move in and out of Alberta based on the price of oil, and that makes a lot of sense. People move in and in and in and in… to Vancouver nonsensically. The cost of living here is very high. Poor and working class workers, who are willing to leave their home countries in search of better economic opportunities for their children, are probably not coming here. Instead, I think our immigration patterns will continue to skew to wealthier people who have non-local sources of income. They will continue to displace existing working class families, who will continue to sprawl out of the city.

    The future transit infrastructure is not for the 1,000,000 people moving here; it’s for us and our kids who will be commuting from the suburbs.

    1. Well said.

      That is why higher PST is the wrong transit funding choice.

      It ought to be far higher property taxes, at least double, and far higher land transfer taxes, say 1% per $1M of value to 15%.

      Until the mayors understand that no meaningful funding for transit will happen.

      1. Anything that could dampen real estate sales in Vancouver will never be approved by the developers’ representatives, er, I mean city council.

  3. I wonder if anyone from the City is going to explain the projected demographic numbers that Elizabeth Murphy says are just plain wrong.

    The Greenwashing Dogma irony about our concrete heat island of investment towers deserves some discussion.

    What exactly is Vision’s vision, and is it seeing correctly, both in projections and in practicality, or, is it just another classic Vancouver real-estate sellers dream?

    Has the vision of Vision been too guided by the current zeitgeist that density with very tall residential towers will save the planet?

  4. Thank you for the opportunity to respond to Tom Durning’s newsletter.

    I would agree with him that affordability is a huge concern, especially in the City of Vancouver. However, the solution to this problem is not clear cut. Unfortunately many of the well meaning actions taken by the city in the name of affordability are in fact having the opposite effect.

    The most affordable housing, both for renters and owners, is the older building stock. If this stock is demolished and replaced with new more expensive housing, it displaces people. This is having a role in the increase of homelessness even though so much new supply has been created.

    It is critical to not just increase supply, but to do so strategically and carefully.

    That is why having accurate growth projections and zoned capacity numbers are such important information in order to plan strategically.

    There is plenty of information in the standard census form that can be used for doing accurate growth projections. More information is always helpful, but not essential. The information available is adequate, but is not being properly applied. That was the message in my article.

    “Based on the Regional Growth Strategy (RGS) approved in July 2011, Metro Vancouver has established growth projections. The projection of a million more people is for the whole region from 2006 to 2041. Only a portion of this growth is expected to happen in the City of Vancouver. Part of this growth has already happened since 2006.

    The RGS used the 2006 census numbers for population and number of housing units, and estimated how much both would increase over 35 years to 2041. For the City of Vancouver this was an increase of about 140,000 people and 75,000 units.

    In July 2013, the City of Vancouver raised the estimate to 164,000 people and 97,500 units. As a footnote under a high growth scenario, this was further increased to over 180,000 people and 108,500 units.
    But there has never been any publicly transparent analysis to show how this increased estimate was determined.

    Looking at the census, the actual population growth from 2006 to the most recent census in 2011 was about 25,000 people and 13,000 units.

    Those figures should be subtracted from the 35-year projection to estimate future needs. The adjusted estimate of increased population between the most recent 2011 census and 2041 should be only 115,000 more people and 62,000 more units. The city seems to have added 24,000 instead of subtracting 25,000 people.”

    Once the true amount of projected growth is established, then we can look at where that would go.
    In my article I also explained how that would be done.

    “… the true number of overall housing units that should be rezoned for as of 2015 would be reduced by the huge amount of zoning capacity that has been approved to date but not yet built.

    This includes major projects that were rezoned (e.g. Cambie Corridor, Marine and Cambie, Oakridge, Telus Gardens, Arbutus Mall, False Creek North and South, Shannon Mews, the Rize, etc.) on top of the development capacity under current outright zoning and recently approved community plans in Marpole, the West End, Chinatown, Hastings Corridor and the Downtown Eastside.

    The city is actually overbuilding by approximately 2,000 units in each five-year census period. This has increased the unoccupied units to a total of 22,000 as of 2011.”

    The City knows how many new units have been built since 2011 to date in 2015. They also know how much zoning capacity has been increased but not yet built as per above. They also know how much zoning capacity exists in long standing zoning schedules and how much of that is likely to be built over the next decades to 2041.

    Simple math will show that the difference, between true 2006 – 2041 projections and the amount both built or already zoned, is how much further rezoning is required to meet that growth.

    It will likely show that we do not need towers outside of the downtown core to accommodate this growth, and most of the existing older more affordable housing could be adaptively reused as well.

    Regarding growth in the outer suburbs, the majority are likely not from across Canada. They are mostly people from Vancouver and the inner suburbs who have been priced out of a house and don’t want to live in a tiny expensive box in the sky. Building more towers in Vancouver will not change this.

    Allowing some development in Vancouver while protecting the majority of the older stock will help to curb development pressure that leads to land value inflation. A fine balance is needed.

    Protecting the green zones and agricultural land is critical to addressing climate change. Avoiding urban sprawl requires careful planning in the suburbs that is consistent with land grid patterns in older cities that were designed for streetcars before the automobile such as Vancouver. Small lots, short blocks, walking distances to arterials, and transit that is electrified, affordable, and covers the whole system rather than a few expensive corridors.

    1. Keeping property taxes artificially low does not help. We have an affordability and homelessness problem in Vancouver, because we do not tax properties enough, especially those owned by non-income tax payers, i.e. specifically wealthy immigrants that derive income from abroad and foreign owners that park their (legal or illegal) cash here, driving locals out.

      A serious debate on this has to happen.

      Why not double property taxes overall, and give a credit to income tax payers as foreign ownership is tough to track.

      We could also raise land transfer tax, like in Hongkong and London, to 15%, say in 1% increments per $1M of property value.

      The current tax mix is too skewed to income taxes and PST. Properties, the new gold, is given away without proper local taxation, and that money is missing for transit, healthcare, education (ESL !!) and social services such as affordability subsidies or homeless shelters.

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