April 9, 2015

Simple Math: Elizabeth Murphy Responds

Elizabeth Murphy, quoted in a Daily Durning post on population growth in Metro, responded in the comments to the post.  It’s worth bringing to the foreground:

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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.

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Comments

  1. I won’t comment on the units and whether or not they are unoccupied, but I will comment on the population projections, as I have worked with them in previous position. The short story is this: they aren’t simple math. You can’t straightline out growth from one period and call it growth until 2041. The world is going to keep changing, the population getting older, etc. This isn’t to say that the current projections are gospel, but straight-lined growth is going to be even more incorrect.

  2. Population growth and associated costs are poorly financed throughout MetroVan. PST and income taxes is insufficient to pay for all the required transit , road, sewer, education, healthcare and social services required. Property is the new gold. It needs to be taxed far higher, especially non-resident ownership. Since that is tough to track land transfer taxes and property taxes ought to be increased with a credit given to BC residents that pay income taxes. Other jurisdictions with similar foreign ownership like London, UK or Hongkong tax land transfer up to 15%. Why not on MetroVan ?

  3. Reblogged this on North Van City Voices and commented:
    Following Elizabeth Murphy’s reasoning for the Regional Growth Strategy starting from the base number in 2006, the overbuilding in the City of North Van is even more concerning. Our calculations started from the numbers in 2011 (census), not 2006. So we have far exceeded the growth targets for 2041. Our submission to Council in March is here: https://nvcityvoices.wordpress.com/2015/03/04/ocp-public-hearing-citizens-deserve-better/

  4. I don’t have a newsletter Elizabeth. I post what I think are informative articles to interested people.

    As to your contention that …”there is plenty of information in the standard census for that can be useful for doing accurate growth projections”…I would perhaps post two recent articles from the Globe and Mail to counter that.
    http://www.theglobeandmail.com/report-on-business/economy/statistics-canada-chief-defends-data-as-quality-concerns-persist/article23412823/
    And I would mention that Mr. Smith is neither an economist or a statistician and ask the readers also to look at the comments at the end of the article.

    Or, this one where the author compares the household survey, which replaced the previous census, to a suppertime phone survey.
    http://www.theglobeandmail.com/globe-debate/we-havent-forgotten-the-long-form-census/article22819338/

    I also rounded out my brief comments on your article with this:
    http://metrovancouverblog.org/2015/03/18/chair-update-decisions-today-for-tomorrows-livable-region/

    Couldn’t agree with you more that we must preserve the older rental stock. Besides years of disinvestment in some of these properties, the land values have gone up tremendously as you well know.
    We have for decades proposed saving or preserving this stock and have published CMHC research papers on this topic. Our latest sponsored CMHC paper on this was in 2011 by Margaret Eberle.
    http://fraseropolis.com/2012/02/15/affordable-housing-a-survey-of-15-metro-vancouver-cities/

    The City of Vancouver comes out ahead in all indicators. It has for years. Under the NPA, COPE and Vision. For decades, the City of Vancouver has lead the way in the region in trying to preserve their rental stock, build mor affordable housing and take care of the homeless population. With only 24% of the population of the region, they have over 75% of the shelter beds.

    We believe that all Metro Vancouver muncipalities should be concerned about their housing stock. We’d like to see them rated or at least compelled to comply to the Regional Growth Strategy by the provicial government.

    However, I’d be more concerned with this trend as to whether Vancouver is munipulating housing projections to build more condos. It does come in different diffrent disguises.
    http://nextcity.org/daily/entry/environment-lawsuits-eir-bloomberg-bike-lanes

    Cheers.

    1. rent control and disinvestment into old rental properties are related. The question is how much subsidies, for what % of society is the right level: bottom 1% ? bottom 5% ? bottom 25% ? bottom 40% ? Vision is obviously conflicted here as they get votes from rent controlled apartment dwellers but not money into city coffers. Only new development will do that.

      Unclear to me why we do not tax new construction more and/or mandate, say 10%, of any new building to be subsidized/affordable rentals.

  5. If only there was a way to build new units while preserving older rental stock!

    Apparently we as a city have decided that the RS zoning is inviolable and we twist ourselves into knots to avoid the obvious solution.

    1. Exactly. Elizabeth’s point is reinforced by relatively flat Vancouver condo prices as compared to skyrocketing single-family homes. What Vancouver needs is a candid discussion about RS zoning, making it easier to build duplexes, triplexes, and row housing. Adding more one-bedroom condos is not going to stop the flight of families, and it’s certainly not going to stabilize the price of single-family homes. It will, however, keep it relatively affordable for young couples looking to buy their first apartment on decent salaries.

      Vancouver has tons of low-density land and no shortage of people who want to live there. What’s not there is the zoning to accommodate people seeking more than two bedrooms, whether renting or owning, at multiple income levels.

  6. To Coreyburger:

    I agree that population projections are not simple math that the past cannot be projected evenly over the future. I was not disputing the Regional Growth Strategy population projections for 2006 – 2041. My issue was with how the City of Vancouver was responding to those numbers.
    My simple math comment was in reference to zoning capacity not population projections.

    To Tom Durning:

    I entirely agree that we need the long form census. Many things such as social planning require this information. Hopefully with a change in government we can get this back.
    However, for basic population growth and new unit starts that information is still available through the basic forms.

    Regarding rental housing and protection of the older stock, there is a very good report that was put together by the City of Vancouver, Rental Housing – Synthesis Report Aug.2010

    http://vancouver.ca/docs/policy/housing-rental-housing-strategy-synthesis.pdf

    The map on page 50 shows where the purpose-built rental stock is. Unfortunately the city has concentrated its new community plan upzoning in the areas with the most existing stock, which puts it under more development pressure than was anticipated at the time. Rate of Change bylaws help to protect them, but are not adequate. If we lose this stock we are in huge trouble.

    The role of secondary suites is also very important to affordability; both for owners as mortgage helpers and for renters as some of the most affordable rentals in the city. Most of the older character house stock that is being demolished have secondary suites, but many of the new monster houses do not have suites or are very expensive units. Allowing strata in the RS zones would also displace a lot of people who are renters.

    The growth projections are being used to justify new condo development which puts tremendous development pressure on the older housing stock. But they do this without providing transparent data on the amount of zoned capacity. The new development should be targeted where it will not do harm to the existing rental stock. Policy be prioritized for adaptive reuse of existing buildings where possible, such as multi-family conversion dwellings.

    Re: Property Taxes

    The comments that property taxes should be substantially raised would make housing even more expensive than it already is. Property taxes are not low because even an average house is now so expensive and the assessed values are what the property tax is based on.

    Re: Property Values

    The reason condo values are flat is condos are still relatively expensive yet too small for families. The demand is for older character single family homes with secondary suites which are sky rocketing in value as the stock is decreasing due to so much demolition. Replacing perfectly good character homes with expensive monster houses that are twice as expensive makes no sense. This actually is contributing to urban sprawl as people move out to the suburbs to get a house they can afford. No matter how many condos you build in Vancouver it is not going to change that.