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'We Need Rental, Today': Toderian

Vancouver's planning boss on the downturn, fixing the rental unit shortage, and a key charter change.

By Monte Paulsen, 3 Mar 2009, TheTyee.ca

Brent Toderian

Toderian: in search of 'invisible density.' Credit: Copenhagen X.

Both heads of Vancouver's political hydra will officially awaken to the city's need for affordable housing today.

"Building Affordable and Rental Housing" is the title of a motion being brought before Vancouver City Council this morning. The motion recognizes that "buying a home in the city of Vancouver requires an annual family income that is at least double what most families earn in this city," and instructs staff to explore "short-term measures by which the City can increase the stock of rental and affordable housing," as well as "new initiatives... to create new rental and affordable housing stock."

"Ready for Rental?" is the title of a forum being sponsored this morning by the Urban Development Institute, a trade association that has become virtually synonymous with condominium development. "With the changing economic climate, developers are looking at other options including converting market buildings or building new rental units," the institute advises, "and what governments can do to assist the development industry."

Caught between these two smiling but teethy beasts of Vancouver political power is Brent Toderian, the city's director of planning. This installment of the Homes for All series presents his views.

"This council has made affordable housing one if its top priorities," Toderian said of his bosses. "They have asked us to look into ways to capitalize on the downturn to see if we can get some affordable or rental housing built."

And of his colleagues at the UDI:

"We need rental. Today," Toderian said. "We won't look a gift horse in the mouth."

Waiting for the 'new demand' to be revealed

"You have to start every discussion with a consideration of supply and demand," Toderian told The Tyee.

"It will be interesting, with this downturn, to see how demand has really been affected," he continued. "Right now we are in an artificial demand freeze. Potential buyers are waiting to see if prices fall further. Once that is done, we'll see what the new demand really is."

The "old demand" shut out new buyers.

"The old demand included the needs of local residents, plus demand that was hyper-inflated by speculation, plus international demand," Toderian said.

"Being a city on the global stage has been seen as a positive thing. It still is. But I also think there's been an increased recognition that there have been some downsides for local people who have basic housing needs," he added.

"When you are looking for your first home, and you are competing with someone buying their sixth investment property... you have a problem," he said.

"If the downturn has scared away the investor and the speculator, what will the new demand -- the local demand, the one driven by residents -- what will that demand turn out to be?"

Once that's visible, he said, the next questions will be: "Do we have the right supply? And is it the right kind of supply?"

Toderian said his job is "more about trying to get developers to think about their product differently... They can make profit on a product that better meets the needs of this city, a product that meets the local demand, rather than the international demand."

Rented condos, a temporary solution

"You then have to consider whether the goal is to produce affordable housing or affordable ownership," continued Toderian, who contributes many of his thoughts to a well-read blog.

"If it's an issue of affordable housing, there are many cities in the world where those earning median incomes can not afford to own their homes. But those cities have an ample rental stock."

Toderian pointed to Manhattan and San Francisco as examples.

"In the last number of years, because of the hyper-inflated market, it was very hard to get any developer to look at rental seriously," he said.

It's easy to see why. It costs roughly the same amount of money to build a rental apartment as it does to build a condo. The rental investor must wait decades to recoup land and construction expense. The condo builder has made money within a few years -- and may have even lowered financing costs by pre-selling some units before construction.

"Developers are now willing to take a look at rental," Toderian said. "Construction costs are down somewhat. Land value is a bit different. And rental vacancy rates are very low."

But developers contemplating rental are at the same time asking governments to provide incentives to help close the gap between a rental investment that takes 50 years to provide a return and a strata that pays out in five.

Toderian applauded the initiative being taken by the UDI, but warned against expecting large developers to solve Vancouver's rental problems. He noted that while a few companies are exploring the development of purpose-built rental housing, others are merely looking for ways to rent unsold condos until the market improves.

"Every bit helps," he said. "But no one should confuse temporary rental for a sustainable solution to Vancouver's rental shortage."

Secondary suites and small lots

Given the simultaneous real estate correction and credit crunch, large developers are unlikely to solve to Vancouver's affordable housing crisis. That leaves the city with little choice but to ask those Vancouverites who own property to help provide housing for those who do not.

Toderian hopes to motivate homeowners and small builders to provide a larger share of new housing in the next few years.

"All those ideas that are about the homeowner and the small builder-developer can have great power," he said.

Such new housing would likely take the form of secondary suites and smaller lots.

"Right now we legally allow one secondary suite. We are contemplating the possibility of allowing more than one in a single-family house," said Toderian, who called unutilized basements the city's "invisible density."

"We've already built that idea into the zoning for the East Fraser Lands project. It's our intent to take that idea citywide," Toderian said. "When applied over a whole city, that kind of pattern can have significant power."

More often, such third units would take the form of laneway housing.

"On laneway, we want to do it in a way that doesn't require a lot of design review," Toderian said. "The team that used to be working on EcoDensity is now working specifically on laneway housing and secondary suites."

Smaller lots could be the next frontier those teams explore.

"In our city, land accounts for a larger share of the final cost than does the construction of housing," Toderian said.

The city is considering new zoning that would allow a more integrated mix of row houses, duplexes and apartments.

The city is specifically investigating the potential of fee-simple row houses, such as those for which London is renowned.

"Row houses are more affordable than single-detached, and fee simple is going to be much more possible with the market. Who wants to take on the strata requirements on a row house?" he asked.

Toderian said there is a "hole" in the legislation related to third-party disputes.

"The fact that right now we can't address the party wall situation is a real hindrance," he said. "We requested the province make an amendment to the Vancouver Charter to allow us to do fee-simple townhouses."

Trimming amenities not the solution

"This council has an appetite to look further" into any idea that would create more affordable housing, he said. "There are a lot of ideas out there."

But there's one idea Toderian does not believe in, and that's the drumbeat most likely to emerge from today's UDI meeting. For several years now, Vancouver developers have argued that they could provide more affordable housing if only they were released from city requirements for social housing, parking and other expensive amenities.

"If you require social housing, if you expect green design, if you negotiate public amenities that make the density livable, do these drive up housing prices?" Toderian asked, rhetorically.

"I don't believe that," he answered.

"What drove prices up was the incredible demand. We were able to leverage that demand so that the public benefitted," Toderian said.

"If you make your expectations clear and predictable, they are factored into the price a smart developer pays for land," he added. "It's simply a false statement to say that the city's expectations have driven up housing prices."

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15  Comments:

  • Monte Paulsen

    02-03-2009

    Question of the day...

    Homes for All is a series that seeks to identify strategies to close the gap between what ordinary B.C. homes cost and what ordinary B.C. families can afford.

    In today's interview, Vancouver city planner Brent Toderian posed an interesting question: "What is the right kind of supply?"

    What sorts of homes do you believe Lower Mainland residents want and need? If builders, large or small, were trying to meet that demand, what would they build?

  • Jeannie

    02-03-2009

    Fee simple row housing-where's the problem?

    Fee simple row housing is being developed in Langley (Fort Langley area), Surrey and New Westminster (Queensborough). What is the obstacle in Vancouver?

  • freebear

    03-03-2009

    Is there a limit to # of housing units?

    Is Vancouver able to house everyone?

    Is there a maximum number of people that have housing?

    What impact would doing away with private property have on housing prices (less so with multii-unity housing)?

    Can everyone be housed in single family residential?

    What is the social, evironmental, economic optimum mix of housing?

    Should people have a job lined up before they move, or are only provided short-term shleter (if needed) and must line up a job, or other solution; or they must seek shleter eleswhere (with support)?

    How sad is it when the director of a planning department can not afford to live in the city he/she is helping plan!

    Revelstoke was a recent example of the above.

  • morechatter

    03-03-2009

    More Like Little Supply and Increased Demand

    And a whole lot of speculation and add in boat loads of immigrants and you got a land developers dream and a housing bubble. And don't forget boat loads to help build that dream and clean the hospitals as they come to the promised land and take over low paying jobs. I guess its standards as these worker do as little as possible because they get paid as little as possible. Funny how that works and its why your hospitals are so filthy because local residents would have know this is just wrong.
    And how is that all going to work out? Well this is what I believe is about to happen here in BC, because of the lack of affordable housing and no social safety as sick and dying given token amounts to live on as many hit the pavement. This province is going to be hit the hardest across Canada as its has the poorest of the poor where young children are left to fend for themselves. And because of this very treatment of a people its going to come back and haunt its originators as people will be REAL RELUCTANT to spend when they know it could be them on that sidewalk? And so it could as January was a record month for unemployment in BC as many lose(males/liberal supporters)their jobs and its going to continue as not British Colombians deal with recessionary blues with inflation biting at their heals.

  • Wilfred Laurier

    03-03-2009

    Density

    A major issue in Vancouver is density and zoning. There are really only two areas with reasonable density, Fariview and Joyce. Another issue is existing single family dwellers resisting density in their neighbourhoods. The basic fact will always remain that there isn't going to be much density west of Arbutus.

    As for zoning, some areas need to be designated as rental and the owners of the building can receive tax incentives to build rental units. This can be done locally, federally or provincially. The MURB programme of the 1970s comes to mind.

    The real irony is at the moment, condo builders are going bust all over the place but apartment owners are still seeing healthy revenue streams. That said, the market is deciding a lot right now; there are plenty of vacancy signs at rentals now and a year ago there were none.

  • morechatter

    03-03-2009

    And Wilfred

    Prices have already come down a great deal its just that property taxes are coming out and it would cause an out cry for sure especially given an election is forth coming and its the kinda stuff that really hurts. Did you know residents in Calgary were hit with a 25% property tax increase despite recession as city says operating costs have increased? Well then with the carbon tax its even going to be extra scary in the new ERRIE. I would have to say property has dropped significantly and will continue to do so and many developers will crumble and fall. Its food prices and other such necessities that are going to cause the consumer much concern.

  • Wilfred Laurier

    03-03-2009

    Well

    Increased density also increases tax revenue. I really don't have a lot of sympathy for people living in houses they have recently bought for $1m+ complaining about property tax hikes. More is the better in my opinion.

    That said, Vancouver will probably see a 3-4% property tax increase. On said $1m house, it amounts to about $150 a year.

    The carbon tax has been more that offset by income tax cuts combined with the reduction in gasoline prices as a whole. Your point is politically partisan in that the NDP opposes any carbon tax as it things that it will affect smokestack industries and union members. I have always found this quite odd since a carbon tax was official NDP policy for a very long time. But voters will decide on May 12. Campbell will easily win a third majority. It is only matter of how many seats he picks up in the new boundries.

  • Rod Smelser

    03-03-2009

    Parking Requirements

    "But there's one idea Toderian does not believe in, and that's the drumbeat most likely to emerge from today's UDI meeting. For several years now, Vancouver developers have argued that they could provide more affordable housing if only they were released from city requirements for social housing, parking and other expensive amenities."

    Monte, please don't leave people with the impression that the only lobbying organizations that have asked for reduced parking requirements are those explicitly connected to construction or real estate businesses.

    SmartGrowth BC has federal charitable status and claims to be an advocacy organization interested in promoting that type of growth that is "fiscally, environmentally and socially responsible and recognizes the connections between development and quality of life". It states that it came out of environmental law projects at UVic and the West Coast Environmental Law Assn. However, its board and advisorty board have several members representing real estate and development interests. It's annual awards dinner is very corporate in nature and is financed by sponsors.

    SmartGrowth BC claims that auto-dependence can be reduced by lowering the parking requirements in new apartment buildings so that people will be encouraged to take transit, presumably because they either don't have a car, or won't have one once they move into an apartment with no available parking.

    SmartGrowth BC goes onto claim that housing costs can be lowered into the bargain. SmartGrowth BC offers no explanation that I know of as to how project developers can be required to pass the construction cost savings along to the apartment purchaser.

    For more, see their housing and transport policy statements.

    Affordable Housing Policy
    http://www.smartgrowth.bc.ca/Portals/0/Downloads/Affordable_Housing_Policy.pdf

    Transport Policy
    http://www.smartgrowth.bc.ca/Portals/0/Downloads/SGBC%20Transportation%20Policy.pdf

  • asp

    03-03-2009

    Unused Density

    Walk up and down any major street in Vancouver and count all the single storey retail spaces on land zoned for 3-4 storey mixed use.

    Then hire an architect or two who can design-in low building costs. These can be built for $50/sq.ft. Building costs need to be related to incomes.

  • Rod Smelser

    03-03-2009

    Stock Plans for Homes

    asp
    Then hire an architect or two who can design-in low building costs. These can be built for $50/sq.ft. Building costs need to be related to incomes.

    There are stock plans for single family homes and duplexes. You can see books of them at any drug store newstand.

    Maybe the BC Govt should commission a panel of architects do design stock plans for apartment buildings. There would be the Model 1 to Model 5 plan for four storey buidlings, the Model 11 to Model 15 for eight stories, the Model 20 to 24 series for ten stories, etc. Any developer who used one of these plans would not need local government design approval or public hearings if the zoning called for apartments. That would reduce costs of getting approvals, and costs of construction as plans were made more modular and more replicable.

  • Brent Toderian

    03-03-2009

    Hi Monte, thanks for our

    Hi Monte, thanks for our discussion, and this great series. Just wanted to clarify one point, though. You wrote:

    "The city is considering new zoning that would allow a more integrated mix of row houses, duplexes and apartments.

    "We've already built that idea into the zoning for the East Fraser Lands project. It's our intent to take that idea citywide," Toderian said. "When applied over a whole city, that kind of pattern can have significant power."

    There are several quotes there that dont quite fit together. The idea that I referenced that has been built into the EFL lands rezoning, that we're considering taking city-wide, is the idea of secondary suites, also called lock-off suites, within apartment condos. Its a clever idea pioneered in Simon Fraser's "UniverCity" development, that we've built into the EFL zoning (up to 25% of units within a condo building could have such separately rentable suites), and we're working on considering the idea city-wide in all apartment zones. It would change the basic affordability of the initial condo purchace, plus provide additional rental opportunites (or just be a choice for a caregiver, aging kids, etc).

    Your reference quote to an integrated mix of zoning for housing types, is another powerful thought, but would not necessarily be considered "city-wide". It likely would be driven by opportunities such as locations next to transit, near shopping streets, etc, and would be strongly influenced by existing policy including the various community visions approved over the years.

    I hope this helps.

    Brent

  • Monte Paulsen

    04-03-2009

    Thank you for the clarification

    Thanks for the clarification, Brent. We've edited the story and moved that quote where it belongs. I apologize for any confusion caused by my misunderstanding.

    Another point that didn't make it into this article, but perhaps should have, was your observation about how Vancouver is a city of distinct neighbourhoods -- and how each neighbourhood has its own ideas about density and housing form. In that context, it only makes sense that no mix of forms would be applied "city-wide."

    And thanks, also, for raising the potential of lock-off suites. This series will take a closer look at that idea next week.

    Monte

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