Some topics are just too big to be covered in one column. That’s why, over the next two weeks, Max Fawcett will tackle the housing crisis and the ways we could address it in a series of them. For more on this series, read the first, second, fourth and fifth instalments.
In a city where new architectural marvels seem to sprout up on an almost monthly basis, it’s easy to forget the significance of the red-roofed low-rises in Vancouver’s False Creek South neighbourhood.
The two complexes, built in the early 1970s and designed by famed local architect Richard Henriquez, are among its most important buildings. They serve as the standard-bearer for a co-operative housing movement that had a brief but shining moment in the political sun more than four decades ago — and the impact is still felt today by the people lucky enough to live in the buildings that resulted.
For a brief moment in time, public-minded values like community engagement and communal decision-making were allowed to eclipse private interests. Governments from all levels collaborated in the construction of housing forms that emphasized security of tenure above wealth creation and exemplified the kind of design urbanists like Jane Jacobs held up as their platonic ideal.
And then, almost as quickly as the movement blossomed, it wilted in the face of soaring interest rates and the shift towards austerity that followed in the 1980s and early 1990s.
Now, we need more housing co-ops. And building them will require more public ownership of land and buildings than we have been willing to entertain in this country.
It’s an idea Paul Hellyer’s commission explored when it kicked the tires on the concept of the federal government directly administering land use in urban areas. That’s probably a non-starter in 2022, but there are other ways to substantially increase public ownership of housing in this country, whether it’s through the Canada Pension Plan and its $541 billion in assets or the federal government’s own balance sheet. That money could be mobilized to support the cost of construction or help acquire the land, all with an eye towards making the math more favourable for groups looking to create new co-operatives.
If done correctly, that could change the math for other non-owners as well. Look to Vienna, where 44 per cent of the rental stock is subsidized housing and the city is by far the biggest landlord. Because they keep the rents on their units affordable, that has a knock-on effect on the rest of the housing market. As Justin Kadi, a researcher at Vienna’s University of Technology, told Marketplace, “The low rents in the social housing sector also keep the rents in the private sector low.”
It’s probably not a coincidence that Vienna is routinely ranked as one of the most livable cities on the planet.
The co-operatives of the 21st century will necessarily look different than them, and they won’t be able to take advantage of the same inventory of unused public land that helped make things like False Creek South possible. But they could add some much-needed density to land that hasn’t been fully or properly developed, just as the City of Vancouver is proposing in False Creek South.
And we have other assets that can be tapped, and new leverage points that can be exploited, in the pursuit of more publicly owned and administered housing.
All that’s really missing right now is the political will to use them. As we’ve seen over the last two years, governments are capable of doing far more than some people had previously imagined. It’s time for them to do the same here — before it’s too late.
Next up: Why it’s time for a renting renaissance.
Comments
Hands off the pension money!!!!
I often have differences with Mr. Fawcett. His apparent backing of the Liberal line that we must use more fossil fuels in order to use less fossil fuels strikes me as either insane or cynical. But on this I couldn't agree more.
As a veteran of three housing co-ops over an 18-year period in the 80s and 90s, two of them in Vancouver's South False Creek, I agree that more co-ops are long overdue. They offer one of the best forms of affordable subsidized housing for the nation, namely because they are self-managed by residents who care.
Having said this, I believe some changes are required to refine and diversify the model and to make it less subject to mistakes by inexperienced committees, abuse by some individuals or a majority clique on the board of directors.
Greater outside professional financial control must be imposed. This is best performed by the Co-operative Housing Federation (CHF), which in turn would receive its authorization through the Canadian Mortgage and Housing Commission (CMHC), essentially imposing a beefed up legal mandate backed by auditors who have the power to inspect co-op premises and look at the books and meeting minutes at any time, unannounced. This would be in addition to the standard yearly audit and annual report.
Our second co-op was a new and very inexperienced outfit where after just one year certain board members practiced nepotism and had stacked the board and key committees with like-minded control freaks. In just 12 months they rejected any assistance or advice from those who had experience in other co-ops and thus were spinning their wheels or making perfectly predictable and costly mistakes. But then they hired friends and relatives to conduct consulting and contract work without permission and spent $15,000 of the co-op's money without the prior knowledge or authority of the general membership. In that case, a general meeting should have been called and spending co-op money above a certain ceiling on 'special projects' put to a vote. We left in disgust.
In another co-op, the chair of the finance committee (a CGA, too) cooked the books to give two favoured members a deep rent subsidy which was financed by the rest of the membership without their knowledge or consent. Perhaps he was naive and was suckered into it with a hard luck, woe-is-us narrative by one family that concurrently had a significant undeclared income from a parent. The members in both units paid only $50 / month for one bedroom units for a year or two. The trick was well hidden and the debt built up before it was exposed years later, layer by layer by other more diligent members and with assistance by the auditors. Of course, the perpetrator and the beneficiaries of this largesse had all moved out by the time it was all uncovered, and left the remaining members with a special surcharge on the rent to pay down the debt over several years.
These are the most egregious violations of co-op principles I am aware of and are the exception. There are more average issues, such as over-housing and under-housing defined by a mismatch between need and availability of appropriate units, a lack of enough units for the disabled, poor design and construction budgets resulting in things like contending with multi-million dollar contracts to fix condo-rot issues, not enough elevators, a lack of diversity in the size of units, and a long-term land lease dust-up with cities or provinces who own the land and whose beancounter real estate divisions want to jack up the lease rates or redevelop the sites with social housing occupants shoved off to the back reaches like second class citizens. The feds should own the land, or have very long-term leases with junior governments on federal terms with long-term unbreakable commitments to co-ops and housing affordability built in and future proof from future conservative MPs. Very few co-ops own their land or buildings, but those who do are in a very good position.
A certified copy of one's annual tax returns should be submitted by all members who receive income or rent subsidies. This helps avoid the abuse perpetrated by a minority of members who have significant hidden income or huge, dodgy write offs for undocumented "business expenses" while also claiming a right to a subsidy. Those members who can afford two or more expensive cars or who own country cottages and acreages have no right to apply for co-op subsidies and should pay market rent.
Further, co-ops need to be flexible enough to change along with family demographics. One person per bedroom is a good general rule. Should a member occupying a two or three bedroom unit become single, then they should be given priority for the first one-bedroom unit that becomes vacant. The six-month rule should be enforced by the CHF and fines applied when necessary. This will help enforce a turnover and distribution of units based on need as a first priority, and not allow long-term entitled single members to occupy the best multi-bedroom units with the best views and so forth. This is especially important in a city like Vancouver where affordability is a major crisis and family or disabled housing is in dire need.
Lastly, co-op housing can be a powerful instrument to affect positive social change and greater urban design efficacy to fight climate change and address healthy urban living for all ages. There should be separate senior's co-op buildings and co-ops for all ages with ground-accessed family-sized units. They should be built close to transit and within walkable communities. Co-ops should be allowed to receive incomes from leased commercial ground-floor units in the same building on commercially-zoned streets, perhaps sharing it 50:50 with the CHF to ensure long-term financial stability.
With respect to design, all new co-ops must be zero emission during lifetime operations and super energy-efficient buildings built to the highest health standards. Specialized units built for people with disabilities must be built into every new co-op project, and these units should be permanently and generously subsidized irregardless of income subsidies. A co-op with a minimum number of units for the disabled must be designed with universal accessibility applied to every aspect of its design, from the provision of wider public sidewalks and street approaches and loading / parking bays (street and parkade) to providing generous inner courtyards and other outdoor spaces and at least three elevators with the capability to operate with emergency power during power outages.
There is a dire need for more federal housing financing which could include thousands of non-profit rental units and homes for the homeless and people with addictions. But co-ops are a big part of the picture and would contribute greatly to a new supply of affordable and subsidized housing.
Thanks for outlining some of the predictable pitfalls of co-op governance, and proposing solutions. Public housing has had some of the same problems, as, indeed have condo corps (some of the earlier ones were probably nightmares to live in, from the resolutions and by-laws passed by early boards. I had the questionable pleasure of being the corporate clerk in a law office that incorporated some of the first ones: moves of petty control freaks who controlled (literally) the size and color of "owners" curtains, flowers lining front sidewalks (no other location visible from the street was allowed), etc.
I'm not sure how CPP could derive a return in any reasonable timeframe from building public housing, though.
Entire tax returns would be an overreaching invasion of privacy. A CRA assessment would suffice, and itself be more than needed.
And the case of Vienna is driven by long history (when the citizenry was not allowed to own land, it all belonged to the overlords), so it's not a good comparator.
There were a number of federally (and provincially) owned properties here in Toronto that were sold to developers by prior Conservative governments. It was good move for their balance sheets, and could have been much more so had it been sold for fair value.
Government financing for low-rent units in privately-owned buildings is the current Toronto approach. Mainly, it's cash handed to developers, rather than just a requirement to provide.
So it can't possibly solve the overall rent cost problem.
Thanks for your informative reply. Indeed, when writing my comments I started to recall a lot more detail than I originally cared to. :-(
Co-ops performed a valuable role in our Vancouver experience -- the limited subsidy was a lifesaver for a short time, I met my spouse in one, and we built lifelong friendships in others. But the experience primarily with incompetence and strong personalities that gravitated to power turned us right off to the notion of ownership in a condo complex where the strata board has way more legal and financial power than any co-op.
Two more stories from our co-op experience that, in my view, reflect the need for internal change in the movement. When I was VP of the board in our last co-op certain members of the finance committee decided that all 63 units required new carpets ... all at once. The questions we board members had centred around the expressed need for every single unit to have theirs replaced whether there was a need or not, why did the concept of changing the carpets as individual units were vacated get rejected, and around contract management. How dare we question these individuals who thought it was the greatest idea since DOS discs were replaced by PC programs? Out came the belittling sarcasm at the next AGM about the "naive and inexperienced" board. Yep, I had only 12 years of design, tendering, contract and construction management by then in my day work. Still, the AGM voted in favour of the clique by one or two votes, as I recollect. Obviously they were talked into it in private conversations.
And so a contract nightmare proceeded. The finance committee clique somehow found $100,000 in a cubbyhole to perform the work. The winning contract (not signed off by the board) was by an amazing coincidence for exactly $99,999. No tenders or official written quotes were invited from other contractors. There were no terms of reference, specifications, performance, labour or materials bonds, work plan with detailed schedule, reference checks or proof of liability insurance supplied. Oh, and all members had to remove their own carpets (meaning they had to remove all their stuff and pile it in the halls) at a time specified by the contractor, no matter what their circumstances or physical abilities were. I resigned from the board at that point because I could have been held personally liable for the contract should anything go wrong, and I made sure that these issues were spelled out in my resignation letter.
The work began with rolls of carpets sailing off the 6th floor outside walkway and landing in the children's playground, which someone forgot to close off. The pile of old carpets grew and blocked access and egress on the ground floor for weeks, as did personal possessions. There was no one supervising the work. It is shocking that no one was injured (or worse), but if there was it would likely have done the spin cycle in the court system for years. And just as the complaining and anger at the incompetence became really vociferous even among those who were talked into voting for it, the chief "just get the job done" clique leader decided to move out, ironically to a private co-op where a relative lived and who reported subsequent years of an aura of disruption and power grabbing. Nice.
The saddest story originates from the same somewhat conservative co-op, where we lived for a decade. By the mid and late 90s AIDS was an epidemic and too many gay people were being thrown out of their rented apartments, fired from their jobs and rejected by uncaring members of their own families. There was no drug therapy then and thousands of gays were suddenly penniless, very ill and dying on friend's couches or in the streets. The Co-operative Housing Federation, to their great credit, acted on behalf of gay people who were losing their housing and sent a memo to every co-op requesting that they consider setting aside one or two units for local gay people who were homeless. We heard later that our first co-op immediately did so with their first vacancy. Bless 'em! Our last co-op spent an hour on the issue at an AGM and I was shocked, dismayed and angry that so many supposedly progressive, understanding people were homophobic, lacked even a modicum of compassion to overcome their discomfiture about illness, and were so ignorant about a health issue that had been around for a decade by then. The vote was 19-14 against. That was my last co-op meeting, and I wept as I later described the meeting to my wife. We agreed that it was time to leave.
We were fortunate to be able to afford a minimal downpayment on a decrepit small house on a postage stamp lot in the late 90s, and punched the clock evenings, weekends and vacations on a second job called The Renovation Game for 17 years. Now no one has control over the colour of our window blinds and flower gardens, and the one bad neighbour (all others without exception are good) is easily ignored.
The last federal property the Harper government tried to sell off was downtown Vancouver's beautifully restored Sinclair Centre. The deal fell through when three local First Nations advised them that they will rightfully register a land claim on the property if the sale continued. That stopped Harper in his tracks. And so it goes today in BC and elsewhere.
The Trudeau government changed tactics and welcomed First Nations as full partners to jointly develop through the Canada Lands Company former federal lands such as the Jericho Base and former RCMP headquarters on Vancouver's west side. Ditto Garrison Woods, a residential development built on the former Sarcee Base in Calgary that was jointly developed with the Sarcee Nation.
Vienna was mentioned in the article. Thanks for the additional info on how it came to be that a huge proportion of housing there is publicly owned. A Vancouver urban design professor has really pushed the 'Vienna Model' without, in my view, understanding the utter dependency on huge sums of money that by necessity come from Austria's federal government and nine state legislatures. Hundreds of millions a year for one city, over nearly 90 years. History is on their side. It is not in Canada, least of all to the extent of Austria. Co-ops and all other forms of affordable and social housing investments are critically lacking here, but to take them up to Viennese levels is impossible without quintupling property taxes and buying up thousands of hectares of private land in a city with some of the highest land values on the continent. Like that will go down well.
This is why new construction of public rentals should look at the non-profit model where a part of the monthly maintenance fees go toward incrementally recouping construction costs and covering all operating, management, depreciation and replacement costs, sans profit. Thus rental housing could be divorced from the roller coaster of overheated real estate markets and see increases only tied to inflation. Even then, I suspect the best we could hope for is probably a peak 25% of all new housing over time being non-profit rentals. If married to another 20%-25% as subsidized social housing, a measurable, much needed counterweight to the market will evolve and help stabilize an increasingly untenable situation.
I lived in a co-op in New Westminster once. It was not a good experience, for reasons given here by Alex Botta. I'll add that the general meetings of co-op members were very unpleasant; you learn that your neighbours are moronic windbags. (Granted, I've been to strata council AGM's that were the same way.)
I'm wondering how the ownership of the equity works. Coops eventually pay off the capital, and then what? The residents can live for the cost of ongoing expenses and repairs?