OUR VIEW: Cut Olympic Housing Losses

Posted December 9th, 2009
in
As painful as it may be to admit defeat, sometimes it opens up the only way forward. We believe that is the situation the city now finds itself in on the Olympic Village social housing project. 

As Olympic Village costs spiralled out of control, the city was forced to step in last January and rescue the project with a $750 million bailout, making the controversial development the subject of intense public and media attention. Since then, the city has managed the project reasonably well, and may indeed recover most of our money when all is said and done.

However, the social housing component of the project stands out because the city is directly exposed to all cost overruns, as the developer. In February, city staff reported the cost of building the 252 units of social housing in the Olympic Village had almost doubled from $65 million to $110 million. After you add in the $40 million in land that the city provided, those 252 units are costing taxpayers about $595,000 each, or about $540 per square foot.

Comparable new social housing is being built elsewhere in the city for less than half the cost of the Olympic Village units. For example, the Portland Hotel Society is building 80 units of supportive housing on Station St. at a cost of $21.6 million  or about $270,000 per unit. The Pender Apartments at 337 W. Pender St. will comprise 96 units at a cost of $21.2 million, or about  $221,000 each. In both cases the city is providing the land, just as it has done for the Olympic Village project.

The city has other sites designated for social housing – but lacks the money to build on them. What if Vancouver sold the Olympic Village social housing, recovered as much money as possible, and used that money to build social housing on other city-owned sites?

It is not unreasonable to think we could end up with at least twice as many units of social housing – maybe more if the city can use this money to leverage contributions from provincial and federal governments. The idea of being able to extract the city from this financial quagmire and also provide housing for at least twice as many people is both socially and fiscally responsible. 

Think City believes the city should explore all options to sell the 252 social housing units, either as freehold or leasehold condominiums. We believe the city should recover the value of its land, plus as much of the construction and development costs as possible. Vague promises of funding future social housing will not be good enough – the money raised must be segregated and held in trust to finance social housing on other city-owned sites.

Obviously, the social housing units at the Olympic Village will not sell for as much as Millenium Water’s market condos. The locations, views, finishings and fixtures are of a lower grade but it is reasonable to assume they could sell for 70 to 80 per cent of the market prices on a per square foot basis. If the units sold for an average price of $320,000 the city could expect to recover $80 million.

There will be objections and outrage from some quarters if council attempts to sell these social housing units. The need to bring social housing units on-stream immediately is one objection – and a valid one.

However, social housing is a long-term public asset with a lifespan of 50 to 60 years. The benefit of maximizing the number of units with the resources available grows with every passing year. In contrast, a short-term decision to cut the ribbon on these 252 units in the next three months will impose a long-term cost for decades to come.

There is also the city’s commitment to a 20 per cent social housing policy in large projects as a means to promote mixed neighbourhoods, rather than enclaves of wealth and poverty. But a significant social housing component could be built into the adjacent phase two of South East False Creek. Developer Michael Geller has suggested on his blog that the city could, as a condition of sale, claim the first right to buy the 252 Olympic Village units back whenever they come back on the market. He has also suggested selling the units as leasehold properties, which would eventually revert back to city ownership.

Another objection is the symbolism of selling social housing. It might send a message the city’s commitment to social housing is weak and set a dangerous precedent that future social housing developments could also be for sale.

In politics, symbolism is often a double-edged sword. The symbolism of the city spending $600,000 per unit of social housing – possibly the most expensive social housing in the world and far more than the average Vancouver family could afford – could not possibly be worse. In a time of widespread economic hardship and deep civic budget cutbacks, it is a high-profile boondoggle our city can ill-afford. 

It is important to recognize all solutions to the housing and homelessness problem require long-term, sustained commitment of resources. Maintaining public support for affordable housing is therefore essential, and profligate spending on $600,000 social housing units threatens to undermine that support.

Think City believes it’s time for the city to swallow the bad news, accept defeat, and recover as much of our investment as possible. This money should be held in trust and used to develop social housing on other city-owned sites, as quickly as possible. 

We believe this approach will maximize the number of units of social housing we can provide – probably doubling the number of units. This public policy goal must ultimately take precedence over the understandable desire to house individuals as quickly as possible. 

With as much grace as we can muster, let’s admit defeat and resolve to move forward.

what's wrong with the math

On March 25th, 2010 kris (not verified) says:
252 units @ $595,000= $149,940,400= what we spent already 252 units @ $320,000= $80,000,000= what we could recover $149,940,400 - $80,000,000= $69,940,400 what we lose either way $80,000,000 divided by $270,000 (station st. example per unit)= 296.29 units 296 units minus 252 units = 44 units= number of extra units we could build is 296 twice as many as 252?

Keep the Olympic Social Housing Units!

On March 25th, 2010 Adrienne Longworth (not verified) says:
I find it interesting that the value of the land is being incorporated into the costs of the units. It didn't cost the city $40 million dollars to purchase this land. When you don't include this into the figure the units cost $258,000. False Creek has been a wonderful community for our family of five. I fully support the social housing project. I don't find comparing it to the Portland Hotel Society's project because this to me is a different type of social housing for people who are suffering from mental illness and/or drug addiction. The mandate of the Portland Hotel Society is to create housing that works for the people who specifically live on the streets in that area but they are not the only people who need housing. There are many families and single individuals that don't have drug addictions and mental illnesses that need/use social housing too. Do not pull out from this project. It's a good thing. It will better the lives of many people. Keeping the social housing in this area will add value to the community in the Olympic Village.

Cut Losses & Get A Lot More Social Housing Elsewhere

On March 2nd, 2010 Dave (not verified) says:
Though it's always tough to admit defeat on a noble and genuinely valid, positive social-policy goal, the reality is that cutting the City's losses on this over-priced, mismanaged and badly handled project; and redirecting 100% of the recovered resources to constructing more affordable social housing elsewhere is clearly the the least-worst option (not the best). In a City with a serious housing and homelessness issue, the priority needs to be adequately housing as many people as possible - and those resources could house nearly double the number of people if used more efficiently elsewhere. And that doesn't necessarily mean abandoning social housing in SE False Creek - as was noted, the units can be sold as long-term leases, thereby retaining public ownership for future use; and the remaining phases of SE False Creek yet to be built can be use to provide additional social housing units in that neighbourhood in the near future. Politically, however, I suspect hard-core advocates will never say die on this one, and go apoplectic over any hint of such a move (as some of the previous comments already show). I guess standing the ideological / activist ground is more important the the actual "on the ground" outcome for housing and homelessness. - PS: To me it's kind of sad to see Peter Ladner apparently chiming in, but then just complaining about how politically hard done by he was back in the day, rather than actually commenting meaningfully on the substance of the issue. Apparently still a lot of sour grapes in reserve I guess?

The housing has to stay to prove they meant it in the first

On January 22nd, 2010 Crunchy Carpets (not verified) says:
place...which I really really doubt being that they have grumbled and mumbled about the housing from the start. Not to mention our city has an AWFUL history of forgetting the social housing, schools etc when developers jump in with big money deals. I honestly don't care if the city loses money on this. The need for AFFORDABLE housing in this city is critical and not just for the homeless and worst case..this city cannot house what is basically now the working poor. There are no decent rental for those who cannot afford to buy. Metro Vancouver Housing USED to build and provide DECENT homes for families, but no longer thanks to the Feds not supporting them. Now the rents are being raised up to market levels. This is happening with co-ops too. What we need is a committment from the city, the provincial govt and the feds to build housing NOT just for those on the streets...but for single parents, families etc that aren't ghettoized. All people deserve to live in NICE areas with all the ammenities. The original False Creek was developed with this ideal and so was Champlain Heights...now nimbyism and the greed of real estate developers has squashed that dream. For their reputation ALONE the city has to bite the bullet and let these homes stay.

Mixed Housing Needs to stay in False Creek South East

On December 14th, 2009 A Neill (not verified) says:
As a long time resident of False Creek South - Granville Island, I strongly favour retaining social housing in the Olympic Village. Check out the successful example of my neighbour hood; mixed housing - leasehold condos, housing co-operatives, non profit housing societies, and low income housing. It is a model neighbourhood, stable and unified, providing housing for Vancouverites from all economic strata. As ever, it remains important to not to cave into the idelogy of not being able to afford what we know works in the long run. Keep low cost housing as part of the Olympic Village.

This story yet again

On December 11th, 2009 Geoff Senichenko (not verified) says:
This story yet again provides an excuse to not have social housing. Every time there is a promise of social housing, excuses come in the way and they don't get built. Yet again trying to postpone having them built. We should stay firm in the commitment made to provide social housing NOW and to add social housing to the southeast False Creek neighbourhood NOW and in the future, as per the 20% social housing policy added to new developments now and in the future.

Vancouver Olympic Village and social housing

On December 10th, 2009 Caro (not verified) says:
If the city can make enough by market selling the previously identified social housing, to build not-for-profit housing in the general area, that's the way to go. However, the 'social housing units' may lack appeal in the market (small, no view, etc.,) that they may as well remain not-for-profit homes, because 'the market buyers' will refuse to pay enough of a price to make the city a profit. What about keeping them as not-for-profit for a number of years, until their value has increased, then sell and make more money? During that period the city could build social housing in the neighbourhood? Although, the city tenants may object to being moved from one building to another. What's this business with a lease and foreclosing on the developer who has failed to pay for it - as described n December 10th by 2009 Chris Shelton. Is this another can of worms yet to be opened and dealt with by the city?

Don't sell social housing

On December 10th, 2009 Neale Adams (not verified) says:
I agree with Ron van der Eerden's comments. We need a mix of all income groups in all our housing. This is the short term thinking that would confine people of low income to ghettos - 1960s thinking. The Province has totally screwed up development of the Little Mountain housing complex, kicking families out when housing is short. The City should not continue the mistake by repurposing social housing in False Creek.

Selling Olympic Social Housing

On December 10th, 2009 Madison (not verified) says:
IF the city dedicated the money from the sale of the Olympic Village units to building other social housing in the area (Station Street?) I think they should. It's still in the neighbourhood. To tell you the truth, I wouldn't want to live in a complex with multi-million dollar apartments. I'd rather live where all the tenants in the same position. There's always going to be a divide between the "haves" and the "have nots". I wouldn't want to look at it every time I left my apartment or looked out my window or deal with the prejudices of the "market" tenants. I also wouldn't want to be a convenient scapegoat for any "problems" that develop. For what it's worth, that's my view from inside "social housing".

Re: Social Housing Must Stay

On December 10th, 2009 Think City (not verified) says:
Editor's Note: The previous comment is not correct. The value of the land plus the cost of development and construction was included in all the examples in this article so that readers would have an apples to apples comparison.
123next ›last »

Post new comment

The content of this field is kept private and will not be shown publicly.