Two Years of BC’s Speculation and Vacancy Tax Data!

Last week, the BC Government dropped a press release linking to 2019’s data from the NDP’s Speculation & Vacancy Tax (SVT), leaving us with two years of data (!) and including a brief analysis of what happened to properties taxed in 2018! Maybe you didn’t notice? It was a busy week. I’ve been looking through the data and comparing across releases, and here are my big takeaways so far:

  • Overall, tax liability remains very rare (< 1%), and seems to be getting more so
  • The 2019 Technical Report revises some of the 2018 taxpaying figures, generally downward
  • The SVT may have added some rental in 2019, but probably not as much as claimed
  • Best guess: probably because we never had much “toxic demand” to begin with…
  • There’s some hint the SVT might have promoted divorce a bit & probably also migration
  • Some errors and lapses in SVT reporting make interpreting the data harder than it should be!

Before expanding on these takeaways, a quick re-cap is probably in order. The BC’s Speculation & Vacancy Tax (SVT) is effectively an additional property tax on empty dwellings (set at a higher rate for non-Canadian owners) coupled with an additional property tax on transnational families (a.k.a. “satellite families”) where the primary income earner files their income taxes outside of Canada. The SVT was brought in by the NDP government in 2017 as a means of combating “toxic demand,” with the idea that investors were leaving residential properties empty and driving up housing costs for BC residents in selected areas of the province (mostly Metro Vancouver, but also further up the Fraser Valley, inland in the Central Okanagan, and on the Island around Greater Victoria and Nanaimo). The SVT was layered over top of the Foreign Buyer Tax (a property transfer tax paid only at point of sale) brought in by the BC Liberals in 2016. Within the City of Vancouver the SVT was also the layered over the Empty Homes Tax (a simple additional property tax on empty dwellings), also from 2016.

Here are the SVT Technical Reports I’m comparing from 2018 and 2019 (with a separate file broken down by municipalities in 2019). So what does a second year of BC’s Speculation and Vacancy Tax data show? First off, the big finding: for the second straight year in a row, the data demonstrate there’s little “toxic demand” to be found in high demand parts of BC. In both 2018 and 2019, significantly less than one percent of properties fall in taxed (non-exempt) categories.

In all property categories created by the SVT, the vast majority of properties are exempt from the tax, regardless of ownership. Those not exempt from the tax provide us a measure of “empty dwellings” except for the “satellite family” category, where residents may owe the tax even when they live in the property. Overall, less than half a percent of properties are empty or owned by satellite families in 2019. The biggest decline in taxed properties by category appears in the “Foreign Owned” category, though taxed “Satellite Family” and “Mixed” ownership properties have also declined.

We can turn from properties to look at owners paying the SVT. These are somewhat easier to track insofar as properties can have multiple owners (with multiple statuses, leading to some of the complicated categories above). Looking at owners fitting into different categories across SVT reports, we get our first hint that the 2019 update also includes revisions to the 2018 data. In nearly every case, the number of owners owing tax in 2018 were downwardly revised by 2019. For the 2019 data, the number of owners owing tax dropped further.

The gradual decline in owners subject to the SVT, both across revisions to the 2018 data and across years extending into the 2019 data, suggests that the more closely we look at files, the fewer owners owing tax we find. This is the opposite of what we’d expect if close scrutiny of files revealed a great deal of evasion. If that were the case, revisions would be expected to increase the number of taxpayers.

The vast majority of exemptions from the SVT are in the form of either “principal residence” (for people who live in the properties they own) or “occupied by tenant” exemptions, either indicating the property is lived in (or at least contracted for living in) for at least six months of the year. A close look at both SVT reports reveals that those claiming these two exemptions have gradually risen, both through revisions to the 2018 report and through the 2019 calendar year.

The rise in exemptions from the tax due to occupation by a tenant between 2018 and 2019 offers one measure from the SVT data of how many dwellings might have been brought back into the rental market through the incentives of the SVT (Table 5). But exemptions are tricky, insofar as multiple exemptions may be applied to the same property. Another measure of how many dwellings were brought back into the rental market by the SVT could be found in directly examining how many properties paying the tax in 2018 were subsequently rented out in 2019 (Table 10). Interestingly, the 2019 SVT Technical Report does not draw upon either of these measures, derived from SVT data contained. Instead the report (p. 3) references a CMHC Report on the Secondary Rental Market in Metro Vancouver examining existing condos newly added to the CMHC’s rental universe in 2019. Lining up different estimates of how many dwellings might’ve been induced back into the rental market by the SVT suggests why… the CMHC report’s estimate – even focusing only on Metro Vancouver – is the highest. Unfortunately, it’s also probably the most flawed as a measure of SVT effects, both insofar as those effects aren’t measured directly, and insofar as the bump in units entering the rental market may have arisen from changes in reporting to CMHC rather than changes in actual rentals.

Overall, it’s likely that the SVT induced more dwellings into the rental market in 2019, but probably not as many as claimed. That shouldn’t be too surprising given that the tax was already in place in 2018. Most units rented out in response to the SVT were probably already rented out prior to 2019. Unfortunately, we didn’t see the big rise in vacancy rates we might expect if a lot of dwellings had been added to the rental market in 2018 either. Nor can I discern sizable increases in dwellings offered for sale prior to the imposition of the Speculation and Vacancy Tax in 2018. Though it’s difficult to fully analyze the effects of the SVT on patterns prior to its arrival, there’s little to suggest much in the way of a great deal of “toxic demand” suddenly released as supply back onto the market. That said, and regardless of its effects on existing patterns, the SVT could still operate as a powerful prophylactic, preventing Vancouver from becoming a resort town of half-empty pied-a-terres for the wealthy. (As a potential future, it’s not so far-fetched – it looks kind of like Miami).

Let’s round out SVT reporting comparisons by looking at other exemptions claimed. These are magnitudes less common than exemptions for principal residence or occupancy by a tenant, plotted above. But they’re quite interesting nevertheless, often revealing the main reasons why dwellings get left empty. Most commonly, it appears, they’re just between residents, as when a property is newly acquired, being renovated, or under construction. Exemptions for “recent acquisitions or inheritances” rose between 2018 and 2019, likely simply reflecting annual variation in sales. Other properties actually have no residence built on them. An exemption for stratas with rental restrictions remains in place. Less commonly, special circumstances are granted to those where ownership remains in flux, and perhaps under dispute, as with divorces and deaths of an owner.

Divorces are especially interesting insofar as the initial 2018 release listed “separation or divorce” as the #8 most common exemption. In the 2019 release, “separation or divorce” no longer made the top ten, and had been scrubbed as an exemption in the 2018 revision as well. The scrubbing of “separation or divorce” from the revision probably reflects a simple process of drawing upon the top ten exemptions in 2019 and comparing backward (though this produces an error, insofar as the 2018 “separation or divorce” figures don’t appear to have been added back in as an “other exemption” update for 2018 revised figures, which is concerning). What’s the substantive impact of this little reporting glitch? Unfortunately it means we only get a hint at a possible effect of the SVT: a bump in separations or divorces. We have ample reason to expect such a bump for 2018. After all, the logic of the SVT as applied to “satellite families” is that it’s fine and totally forgivable to be separated from a spouse who jointly owns your home due to irreconcilable differences. But if one is separated from a spouse instead simply by their work in another country, that’s a “satellite family” and you’re subject to the tax. No surprise people might re-evaluate the nature of their relationships to their spouses in response to the SVT, temporarily bumping up separations and divorces. As with rentals, we might expect this response to be strongest in the first year of the SVT, subsiding (and hence moving down the list of exemptions) by 2019, which appears to be what we see above. Though trickier to establish, we would also expect immigration and migration as potential responses to the SVT, with owners moving to (or returning to) BC to avoid the tax. Many of these plans might simply speed up processes already happening anyway. Of note, more careful and consistent releasing of data would be needed to study these kinds of responses more closely.

Errors in the 2019 SVT report also plague the study of properties by ownership category. In my first chart (at the top), I use “non-exempt” figures from Table 7 in the SVT 2019 report rather than “total” non-exempt figures from table 8. Logically, these two figures should map perfectly on to one another (as the corresponding tables do in the SVT 2018 report), but in the SVT 2019 report they diverge quite a bit with respect to how properties were assigned into “other Canadian”; “foreign”; “satellite”; “mixed”; and “other” categories. Via comparison to 2018 figures and to Table 10, Table 7 looks like it contains the correct breakdown into categories. But here, too, errors in the 2019 SVT report make it difficult to confidently analyze the data. As noted above, the complicated matching of multiple owners to properties likely explains potential mismatches across tables, but it sure would be helpful if SVT reports took a consistent view of the matter!

Below I use figures from Table 7 in combination with Tables 10 and 11 to try and follow properties that were taxed in 2018 over time into 2019, to see what happened to them next. Though I’m critical of the SVT reporting errors (as above), it’s great that they provide this ability to follow properties for us! Here’s what I get…

Overall, it appears that most of the properties paying the SVT in 2018 were no longer paying it in 2019. Mostly the owners in 2018 either moved into their properties by 2019, rented them out to someone else, or sold them off (or otherwise removed their name from the title). Selling or renting were the most common strategies for Foreign Owners, accounting for most properties, but a minority simply held onto their property and paid the tax for another year. Satellite Families were more evenly split, between claiming as a primary residence in 2019, selling, renting out, or simply paying the tax again in 2019. Some of the difficulties in classification here continue to plague a full understanding, but the fact that satellite families were the most likely to transition into a primary residence exemption likely reflects some combination of marital and migratory responses to the SVT, as discussed above. Other Owners (here including BC Residents, Other Canadians, Mixed, and Other categories) mostly rented, sold, or paid the tax again. Way more Other Owners paid the tax again than for other categories, likely reflecting, in part, the lower tax rates they generally paid under the SVT structure. For similar reasons, we see many more Other Owners – reflecting mostly BC Residents – added as new taxpayers in 2019 than for other categories. The tax seems to have been most effective at driving out the (relatively rare) “empty” properties of Foreign Owners, but new “empty” properties with domestic owners seem to have replaced at least some of those Foreign Owners as tax-payers.

Overall, it’s great to see more Speculation and Vacancy Tax data out, warts and all! It probably continues to be our best source of data about “problem empties” across high demand regions of the province, and also potentially – with a bit more care – could give us new insights into underlying housing, migration, and family processes.

Learning to Not Fly

Updating my miniseries on flights and exposures through YVR airport in Vancouver. No particular reason

Here’s passengers on flights in and out in and out of Vancouver. Unfortunately the series I get from YVR still ends in November, so we don’t have the full update on how many holiday trips we should be enraged about for those of us avoiding non-essential travel. But we can see that since the arrival of COVID, passenger travel dropped dramatically, then slowly rose in what looks like some combination of a response to lessening restrictions / fears and seasonal patterns.

Speaking to the persistence of seasonal patterns, we can see that August 2019 was the pre-COVID peak for travel, just as August 2020 represents a post-COVID peak for travel. Since then, travel has eased off, which may also reflect the second wave of COVID. The combination of seasonal patterns and renewed COVID concerns might be seen a little more clearly looking at year-over-year passenger patterns in 2020 explicitly compared to 2019. For Domestic passengers, in particular, it looks like travel recovered up to about one-quarter of pre-pandemic levels by August, and pretty much stayed at that level through October, but we may see some evidence of a fall-off in response to the second wave of COVID in November. That said, I have to imagine that once December figures come out, we’ll see a jump in travel, just like in 2019, pointing to the continuing persistence of seasonal patterns.

International travel patterns are different, and more than a little troubling, insofar as they don’t seem to be at all responsive to the second wave of COVID. Though the progress has been much slower than for Domestic travel, International travel just keeps rising back toward historic norms, led, in November, by a sharp jump in travel between YVR and Europe. Yikes.

But how much is all of this jetting around really contributing to the spread of COVID? Unfortunately, we don’t know. Our surveillance system, data consolidation, and transparency game is still pretty weak here in BC. But we can get a very conservative sense of the changing scale of the contribution by just looking at the BC CDC Flight Exposure data (full pdf). There we see a remarkably steady upward rise in flight exposures, despite the leveling off in the overall number of passengers carried. Yikes, yikes!

Once again, posted exposures represent a very conservative estimate of how air travel is contributing to spread of COVID. Obviously, given the combination of asymptomatic cases and our lax testing regime, the BC CDC still isn’t catching all cases. We also don’t get the actual number of confirmed COVID cases per flight, just whether or not there’s been an exposure, and corresponding rows assessed as being at risk. Sometimes there are multiple seat sections, suggesting multiple, and potentially unrelated COVID cases aboard some flights. But the big takeaway is that even before holiday travel, airlines were already jetting around more COVID cases than at any other time in the pandemic.

I’m not sure it’s as useful, but for consistency’s sake, I’ll also post the exposures per 100,000 passengers, which I played around with in my last post. Last time I didn’t include the Miscellaneous International flights, because there weren’t very many, but they included a lot of exposures, and also because I wasn’t entirely clear on the reporting of flights to Mexico, which is where nearly all the exposures occurred. This time I’ll add those flights back in assigned to my best guess of how to combine the data, in part because Mexico seems to be where a lot of non-essential vacationing is occurring. Unfortunately, once again, we only go up to November data. The data highlight just how risky travel to common vacation destinations in Mexico has been, especially back in July, though by November the US and Europe had moved into riskier positions. That said, the chart really obscures the steady rise in risk of exposure for domestic travelers within Canada, still representing most of our travel.

Overall, though data remains poor, we appeared to be flying around an increasing number of COVID cases through 2020, significantly complicating efforts to contain the virus. Particularly worrisome, despite Public Health orders to avoid non-essential travel, lots of people – including politicians and other public figures – took to the skies on recent vacations. For now, folks, it’s probably time to learn to NOT fly. Maybe stay home and watch a video instead?

What to Expect from an Empty Homes Tax

Joint with Jens von Bergmann and cross-posted at mountainmath

Empty Homes Taxes are back in the news!

In a very short time period, we’ve got Vancouver raising its Empty Homes Tax rate from 1% to 3%, based in part on a report from CMHC about a sharp rise in condos on the rental market, we’ve got Toronto eyeing its own Empty Homes Tax, and now reports suggest that even Ottawa is considering getting in on the game.

We’ve long argued that Empty Homes Taxes are a pretty good tax. Consider it as equivalent to a bump up to property taxes (which cities like Vancouver could really use!) paired with a principal residency exemption, kind of like BC home owner’s grant, but also applicable to property owners who rent out their properties on a long-term basis, hence providing incentive to keep housing occupied.

The incentive is real. But we have questions about whether Empty Homes Taxes are being oversold as solutions to the broader housing crises facing Metro Vancouver, Toronto, and Ottawa. To start with, as we’ve demonstrated previously, none of these metro areas rank particularly high in North America in terms of vacant housing stock on census day. Indeed, all Canadian cities appear to be on the low end, implying relatively few of the abandoned homes and vacation pied-a-terres that seem to push up vacancies in many US cities.

Vancouver and Ottawa appear high for Canada, but somewhere between low and middle-of-the-road for North America as a whole. Toronto is definitely on the low end. Of note, a scan of the data for the US, which includes reason for vacancy, suggests that regular housing processes (dwellings up for sale or rent, awaiting new residents; dwellings caught in temporary legal limbo after the death of an owner, etc.) account for a substantial portion of vacant homes overall. For metros at the high end of vacancies, these numbers are boosted by abandoned homes and/or pied-a-terre vacation homes. This suggests that abandoned homes and pied-a-terres just aren’t that common in Canada.

With some caveats, we can test this by looking at Vancouver’s Empty Homes Tax and BC’s Speculation & Vacancy Tax data. Most homes that appear as if they might be empty qualify for exemptions from these taxes, reflecting regular housing processes. After exemptions, there just don’t seem to be very many empty dwellings left. In the most recent Vancouver EHT data, declared vacancies range by neighbourhood from 0.08% (in Sunset & Grandview Woodlands) to 1.26% in the West End, roughly matching the City of Vancouver’s 0.7% of properties non-exempt from the tax in the provincial SVT data (excepting out “Satellite Families”, which would bump the figure to 1%).

Of course, taxes may be bringing dwellings back into the rental market that weren’t there in 2016, meaning our EHT and SVT data might be reflecting big declines in empty units. What about that CMHC study showing a bump of condos being rented out after the Empty Homes Tax was imposed? Well, funny story… first it’s important to know that the study is based on condo managers reporting from their Form K, which are meant to be filed when condo units are rented out, but in the past have been largely inconsequential. Indeed, in previous work we have highlighted that the CMHC estimate of rented condos in Metro Vancouver differs significantly with census estimates.

Here it’s notable that the first year of the EHT’s existence did not see a great many condos added to the rental market. But after the Speculation and Vacancy Tax came into place, the number of condos being rented out seemed to grow quite a bit. Was this a real change, perhaps because the added taxes became higher? Or did this represent a reporting change? Due to a variety of policy changes (including SVT), suddenly failure to file Form K has more teeth. As a result, it’s likely the reporting compliance for From K has gone up significantly. In other words, we’re not actually certain that a slew of condo units recently came onto the rental market. It may be, instead, that a slew of condo units already on the rental market were suddenly reported correctly. Overall, it is hard to get robust estimates of how many units have entered the market in response to the tax, but there’s no doubt some have. Looking at City of Vancouver data on homes that are either exempt or pay the tax, and cross-referencing this with the Ecotagious study estimating vacancy by electricity usage, we can arrive at a very rough estimate of the number of homes returned to the market being roughly double the number of homes that end up paying the tax. Which is a sizable achievement.

So what should Toronto and Ottawa expect from an empty homes tax? We have previously used City of Vancouver data to give fairly accurate projections for the Speculation and Vacancy Tax, and we can apply the same method to Toronto and Ottawa at the city level. The estimate is quite crude, it simply scales the units “unoccupied” on census day to match the City of Vancouver Empty Homes Tax numbers. So let’s take a quick look at what kind of dwelling registered as “unoccupied” in the Census.

While there is some variation across the regions, the duplex category, which generally captures houses with basement suites, comes out universally with the highest share of unoccupied homes. We have written about this at length before and it should not be surprising given the flexible nature of secondary suites that they are used flexibly, which frequently means that they aren’t rented out. Of course, these suites also aren’t taxed as empty, since they’re considered part of one residential property and can so easily be reabsorbed into the main dwelling. The high prevalence of basement suites in Vancouver is a big part of what drives up its vacancy rate in the census.

Taking account differences in housing stock we can apply a crude formula from the City of Vancouver Empty Homes Tax experience, assuming exemptions are structured similarly. Accordingly we can project that an Empty Homes Tax would capture around 2,000 units in Ottawa and 6,000 in Toronto. Roughly twice that number might be induced to re-enter the rental market in each city.

So should Toronto consider an Empty Homes Tax of its own? Relative to the size of Toronto’s housing market, we probably shouldn’t expect an Empty Homes Tax to a) find very many empty homes, or b) create much new revenue. We’re likely looking at shifting over no more than a single percentage point of units into the market. But adding any new units to the market is good. And we like Empty Homes Taxes overall. Just insure expectations are set accordingly!

What about Ottawa? Similar wisdom pertains. Set expectations accordingly! At the same time, Ottawa is instructive to consider insofar as it’s the centre of government for Canada. We actually kind of expect a certain number of properties will be empty a substantial portion of the year. Why? Well, Members of Parliament and Senators are both expected to represent other parts of the country in Ottawa. In other words, they’re expected to split their time between Ottawa and elsewhere. Indeed, Senators are still required to own at least $4,000 worth of real property in the province they represent, though there’s currently a bill to repeal that requirement (property requirements for MPs were abolished with the 1920 Dominion Elections Act). Again, not to say an Empty Homes Tax is a bad idea for Ottawa, and why not tax politicians a bit more? But Ottawa is also uniquely well positioned to demonstrate why some people, including – but not limited to – MPs and Senators, maintain some form of residence in multiple places. And Empty Homes Taxes necessarily tend to hit hardest for anyone who finds it difficult to choose just one.

As usual, the code for this post is available on GitHub for anyone to reproduce or adapt for their own purposes.

BC Housing Platforms!

It’s election time in BC! And housing is back on the agenda, even if not quite as centrally as in past elections. Here I want to provide a quick basis for comparing each party platform, adding in a short bit of my own analysis. My quick take is that when it comes to housing there are things to like in each platform, and I hope the parties work together to keep housing on the agenda!

I’ve drawn housing proposals from the platforms of the BC NDP, the BC Liberals, and the BC Greens. It’s possible that housing-related items show up in other parts of the platform, but I’m focusing on the sections linked. For anyone following along outside BC, the NDP are a provincial labour-oriented left-leaning party, affiliated with the federal party, the BC Liberals are a centre-right amalgam, combining sympathies for both federal Liberal and Conservative parties, and the BC Greens sympathize with the federal Greens. We’ve had a governing coalition of the NDP and Greens since they managed to cobble together an alliance booting out the BC Liberals in 2017.

I tried to compare based on broad categories of proposed action in housing, highlighting more concrete proposals over vague suggestions where possible. Here’s what I get, divided into two parts below, the first covering COVID-relief, Taxation, Strata Insurance, and Social Housing, and the second covering Development. Click on each graphic to blow them up!

In terms of COVID relief, the NDP have offered to freeze rents until the end of 2021 (optimistically forecasting the end of the pandemic). After that, they propose to limit rent increases to inflation, in line with their application of rent control provisions in BC to date (under the prior BC Liberal administration, rent increases were generally capped at inflation + 2%). The BC Liberals suggest their COVID relief proposals will be targeted at tax relief for home owners (most of whom can already defer their property taxes). The Greens, who’ve had the least time to develop their platform thanks to a leadership contest followed almost immediately by a snap election, don’t suggest any specific COVID-relief related housing policies.

Taxation & Strata Insurance!

Restructuring of tax policies more broadly has been a persistent theme in BC’s recent history, with the NDP’s establishment of an Additional School Tax on high value ($3m+) properties and Speculation and Vacancy Tax (SVT) hitting mostly vacant properties, but also those occupied by “Satellite Families” at the end of 2018 following the BC Liberals imposition of a Foreign Buyer’s Tax (FBT) in 2016. This time around, the NDP are re-upping a promise from last election, the $400 Renter’s Rebate tax credit for renters to complement the existing home owner grant reducing annual property taxes (the BC Greens famously opposed said rebate).

The BC Liberals hope to scrap the SVT, and replace it with a capital gains tax targeted at condo flipping (not yet well-defined) and higher property tax rates for non- residents of Canada (a slippery concept). The BC Greens want to keep the SVT but close “loopholes” allowing exemptions for “Satellite Families” and foreign owners. It’s not clear what exemptions the BC Greens are talking about, but here are the ten most common claimed. Of note, the SVT currently applies to very few properties (<1%). If all declared foreign and satellite families exempted in the last tax data were forced to pay the tax, then just over 3% of properties would pay. The BC Liberals also propose creating a new property tax category (along with lower rates) for purpose-built rental buildings containing three or more units (a cut-off that could include some subdivided detached house properties in Vancouver!)

All parties have responded to rapidly rising strata insurance costs, suggesting reforms to bring down costs, but in a few key different ways. The NDP suggest providing a public option in case costs don’t come down. The BC Liberals are pushing for lessening insurance requirements. The Greens are… proposing a task force to look more into the issue.

Social Housing

All of the parties pay at least some lip service to adding to BC’s stock of affordable social housing. As the party in power, the NDP have the most developed proposal in the continuation of their Homes for BC plan, promising 114,000 new affordable units through partnerships over 10-years. The NDP have also proposed new transitional supports to renters moving from supportive housing into the private rental market. The BC Liberals and Greens offer more vague support for social housing investment, especially promoting cooperatives (UPDATE: more specifics from BC Liberals just released today!). The Greens also propose applying $500 million toward a new renter’s grant, aiming to bring rental payments for tenants down to no more than 30% of their income. It’s not yet clear whether this is simply an expansion of the current Rental Assistance Program offered by BC Housing, or meant to apply differently, but the potential pool of applicants in BC remains quite large.

Development

All of the parties offer something in the form of acknowledging the limited range of housing on offer in BC. Both the BC NDP and the BC Liberals place at least part of the blame on sluggish BC municipalities. Both parties push for streamlining municipal and provincial permitting processes that have slowed up and added expense to the development of new housing. The BC NDP also make a welcome proposal to eliminate parking minimums for projects near transit.

The BC Liberals add a variety of other proposals, pushing to match municipal zoning more directly to official community plans and potentially waive rezoning hearings for projects complying with plans. Similarly, the BC Liberals suggest strengthening and enforcing municipal adherence to regional growth targets. To match these “sticks” the BC Liberals would apply to municipalities, they also suggest “carrots” in the form of an incentive fund offered to municipalities expanding supply. Other welcome suggestions include digital tracking for development projects, enabling the identification of hold-ups in the approval process. Interestingly, the BC Liberals also suggest mixing a cautious approach toward rental zoning (recently enabled by the NDP) with provincial restrictions requiring replacement of rental apartments (which many municipalities already require). Finally, they suggest upping the mandated number of disability-accessible units for new developments. The BC Greens call for encouraging a “missing middle,” but offer the fewest specifics on development reform for getting there. Yet they embrace two proposals for reforming development that many in the non-profit housing sector have long called for, including both a capital fund to acquire old rental buildings when they come up for sale, preserving affordability, and the establishment of a land bank to support cooperative development.

Mix and Match!

Overall (and staying positive) there’s a lot to like in mixing and matching the housing platforms on offer. I like many of the NDP’s taxation and social housing ambitions (though I don’t like targeting satellite families and I’d up property taxes and social housing construction further); I’m happy with the Green’s embrace of supporting land banks for cooperatives; and it would be great to see many of the BC Liberals plans for reforming and improving the municipal role in approving housing development implemented (also shout out to the NDP here: yay for lifting parking minimums!) Let’s hope everyone keeps their good ideas on the table after the election’s over!

Vancouver’s Crime Pandemic! That wasn’t.

We now have over six months of pandemic conditions in Vancouver and crime data to (roughly) match. We also have all kinds of claims about crime flying around, sometimes pushed by the police (VPD) themselves, only heightened by click-seeking reporters and the vote-seeking politicians. So we should probably check into the data. Long story short: there’s scant evidence of a crime wave showing up in the VPD crime data.

First a quick round-up of claims. Let’s start with a recent police report, promoting the idea that crime, and particularly assaults, have risen. This was touted by various media reports and politicians as pointing toward a breakdown in law & order associated with the pandemic and prominent tent cities in parks near downtown. But the police report – though they failed to emphasize this point properly – explicitly referred to data from the first two quarters of the year. In other words, they mixed pre-pandemic and post-pandemic data from earlier in the year, and this data was used to make claims about conditions on the ground now. This was perhaps potentially useful to the VPD in the face of calls to defund the police, but bad form overall! The report has been joined to anecdotes, polls, and neighbourhood and political campaigning all pushing the idea of a pandemic-induced breakdown in public order.

Despite the VPD reporting only on data from January to June, regular monthly VPD data now extends through August. We can use this data to more carefully separate pre- and post-pandemic conditions. Let’s first do this for the most common crimes reported (i.e. those where trends are most easily distinguished from random variation). These include both violent (Assaults) and non-violent (Break & Enters, Thefts of Motor Vehicle, Thefts from Vehicles, Thefts up to and around $5,000, and Mischief) crimes, all of which tend to average more than 100 cases a month. We’ll compare all of 2019 to the pandemic period we’re currently experiencing. What’s that look like?

Let’s start with assaults, the most common violent crime (top lines above). It looks like any rise in assaults relative to 2019 occurred BEFORE the pandemic. Indeed, for July and August, we’re running well below where assaults were in 2019. Of course it’s possible that the composition of assaults have changed, with drunken brawls on Granville down, and hate crimes up. So it’s worth paying closer attention to the data than is available in VPD reporting. But there’s nothing about post-pandemic 2020 that looks like a violent crime wave.

The picture for common non-violent crimes is more suggestive. But here it looks like we’ve seen a dramatic drop in crime reporting associated with the pandemic. The seasonal pattern from 2019 whereby crime rises through the summer months looks like it might’ve been replicated in data from June to August of 2020, but at a much lower level overall relative to 2019. Looking at the most common crimes, we’re not in a crime wave. If anything we’re in a crime trough.

But does it cover the spots most identified as trouble spots by recent political rhetoric? The VPD data also allow us to break out data by neighbourhood. Here I’ll zoom in on Downtown Vancouver (the Central Business District) and the Strathcona neighbourhood, both of which surround and contain the neighbourhood of the Downtown Eastside, where many have recently claimed a breakdown in public order (also associated with tent cities in parks) is threatening public safety. What do assaults look like in these neighbourhoods?

The patterns for assaults are pretty similar in these neighbourhoods as what we see for the city as a whole, but there as some variations. Assaults downtown ran high in January and February, but seemed to drop dramatically at the beginning of the pandemic, and have since risen with the warm weather, but not to levels comparable level to 2019. In Strathcona there wasn’t any sustained drop in assaults early in the pandemic, but relative to 2019 they declined from heightened levels in January and February to roughly match and recently drop below 2019 patterns.

The pattern for non-violent common crimes looks much the same for Downtown and Strathcona as it does for the rest of Vancouver. There’s been a big and sustained drop in these kinds of crimes relative to 2019. If there’s been a breakdown in public disorder, it’s not showing up in common reported crime data.

Are we seeing anything different in less common crimes? I’m wary of monthly patterns in the data, but including March, we’ve now got six months of data since the pandemic began. So let’s look at all kinds of crime reported by the VPD and compare the six months of the pandemic (March – August 2020) to the data for the six months prior (September 2019 – February 2020), as well as the six months matching the same year-over-year period (March through August) from 2019.

Here we can see that there’s not a lot of variation in most crimes between how they’ve appeared in the pandemic relative to the prior six months or the same set of months last year. The most recent drop off in Assaults doesn’t really show up as notable across the full six month period. But the decline in Thefts of all kinds is striking and strong (as compared to the other crimes of Break & Enters and Mischief, which appear down relative to the prior six months). Overall, very little evidence to support a pandemic crime wave. But there is one exception to the trend…

What’s up with Arson?

Any interpretation of Arson data needs to be keep in mind that Arson is not a common crime, but let’s set aside my concern about random fluctuations to just take a peek at the monthly arson data. Is this a sustained rise, or driven by a weird month?

That looks… pretty sustained. Though arson cases generally remain rare relative to other kinds of crime (nowhere near my arbitrary cut-off of a hundred cases a month for common crimes), they appear to have gone up, mostly in conjunction with the pandemic itself. The one month during the pandemic where they drop below 2019 levels looks like a weird spike in arson in July of 2019.

It’s hard to fully interpret the arson data without more context. Properties left unattended subject to a particular form of mischief? Business owners weighing their insurance policies against the cost of staying open? Pretty interesting… but who knows? Not me. The consequences, as with the New Westminster Pier, can be terrible. But overall, arson is still pretty rare.

My big takeaway: we’re not seeing a big crime wave associated with the pandemic here in Vancouver. Anyone running on that theme would appear to be doing so with bad information or in bad faith.

If anyone wants to play around with the data themselves, I’ve downloaded the VPD monthly report pdfs into a common spreadsheet here, complete with the summary of data and figures above. Enjoy!

*** UPDATE Nov 17, 2020 ***

Given that crime and VPD remain in the news with the VPD’s survey on crime feelings and attempt to set up a new unit, I thought I’d update the chart to their latest data (now from September, but October should be out soon). The story remains consistent with the above. Feelings aside, no evidence of a pandemic crime wave, assaults comparable or below 2019, common property crimes still waaay down.

Let’s Visit the Airport!

So, what’s happening at the airport these days?

Here in Vancouver (or more specifically, Richmond), I discovered that YVR actually posts some of their data. This is great! I’m going to look at their recent passenger data to get a sense of two things. First, how much air travel into and through Vancouver has grown in recent years. Hello globalization! Second, how much air travel into and through Vancouver has shrunk in recent months. Hi there world-wide pandemic!

Let’s take a look, first at annual data, which YVR has posted from 1992 on. Of note, this series begins just YVR completed its international terminal expansion in 1996. Also, the series starts after Vancouver’s first global party event (Expo 86), but before its second (2010 Olympics), both of which are mentioned in YVR’s declarative history of the airport.

YVR1

The data cover all “enplaned and deplaned” passengers, so everyone coming through YVR for air travel. They break down the passengers by domestic, transborder, and other international travel. From 1995 onward, they also helpfully break out Asia-Pacific and European passengers from other miscellaneous international. My working assumption is that passenger categories mostly mirror YVR’s organization of flight destination information, so that Domestic covers all flights within Canada, Transborder covers flights to the USA, Asia-Pacific covers flights to Mainland China, Hong Kong, Taiwan, India, the Philippines, Japan, South Korea, New Zealand, and Australia, and Europe covers flights to the EU plus the UK. Misc. Intl. covers everyone else, but probably mostly picks up flights to Mexico and the Caribbean / Central America. Of note, there’s enough ambiguity in labeling that it’s possible flights to Mexico fit in the Transborder category instead, but I’ll assume we’re just talking about the immediate border there.

The big patterns are dramatic growth in passengers between 1992 and 2019. There are waves to the growth, which really seems to kick off in earnest with the expansion of the international terminal in 1996 before retracting a bit by 2003, then expanding in near linear fashion till the recession of 2009. From there, once again we’re back into a dramatic rise until… well… 2020. Where we don’t yet have full data, but needless to say, we expect we’ll see a drop. Once all the data’s in, we’ll probably end up somewhere back in 1992 territory. We’ll have a look at monthly data in a moment, but first let’s also point out two other patterns.

First, despite the name-check of the 2010 Olympics in airport marketing materials, we see no real evidence that 2010 was anything special for passenger traffic. It fits right about where we’d expect it to be on the ten-year rise between 2009 and 2019.

Second, the growth in passenger air travel through YVR has been widespread. It’s not driven by any one category of destination. But the rise of globalization is apparent. Domestic air travel between 1992 and 2019 more than doubled. But transborder travel nearly tripled and other international passengers nearly quadrupled over the same time period. Other international passenger travel is only broken down by Europe, Asian Pacific and other categories from 1995 on. Here we can see that the rise in Asian Pacific destinations leads international growth, but the growth remains widespread. Of note: seats for Hong Kong appear to be only the second most common destination outside of Canada, just behind seats for Los Angeles. Despite Hong Kong’s extensive ties to Vancouver, it’s hard to make out for certain any particular upswing in flights to the city surrounding its handover to China in 1998.

Back to the present! Let’s zoom in on 2019 to 2020:

YVR2

There’s our pandemic effects! Normally February begins the climb back to summer travel highs. Instead, March saw a big drop with quarantine restrictions put in place, and the drop only got bigger in April. Since then there’s been a very modest recovery into May and June, which likely continued into July (data forthcoming). After a couple of months of quiet, I can certainly hear the jets back in the sky again. But they’re still not carrying very many passengers.

Here’s 2020 again, looking at percentage of 2019 monthly passenger data by category:

Jan Feb Mar Apr May Jun
Domestic 99% 102% 56% 4% 6% 13%
Trans-border 97% 96% 44% 1% 1% 2%
Asia Pacific 99% 76% 45% 5% 4% 7%
Europe 108% 108% 62% 2% 1% 1%
Misc. Int’l 113% 118% 62% 1% 2% 5%

We can see that the biggest recovery, so far, is in the Domestic category. Not surprising, given that the provinces have lifted most of their quarantines against travel within the country. Canada continues to impose a travel restrictions for other international travel. But the next biggest recovery is for flights between Vancouver and Asia Pacific, where COVID recoveries so far tend to look the strongest. Misc. Int’l flights, continue, but travel to the US and Europe remains almost non-existent. At least as of June (Europe began lifting travel restrictions in July). Of note, of course, we’re still experiencingair travel related exposures (h/t Jens).

Every decent human being is looking forward to the end of the pandemic. But do we want air travel to come roaring back to where it was? There are lots of things to think about, like the emissions associated with air travel. But there’s also little doubt that here in Terminal City, air travel is now how an enormous proportion of our visitors arrive and how many Vancouverites get around. So no matter what, it’s worth keeping an eye on the airport.

Lots for Sale

I’m currently enjoying Desmond Fitz-Gibbon’s Marketable Values: Inventing the Property Market in Modern Britain. It’s a fascinating book on how British real estate was transformed from estates granted and traded in private transactions bound by custom (think of landed nobility but also the Commons pre-enclosure) into something that could be bought and sold at auction and described in terms of a market, mostly over the course of the late 18th and 19th Centuries.

I was curious about this book for lots of reasons, not least because it seemed British property practices often spread to colonies, as in Canada. But as described by Fitz-Gibbon, this was actually a two-way street, and experiences in real estate at the peripheries of Empire also often informed practices back in England.

At any rate, the book and related projects have me re-examining the creation and marketing of properties here in Vancouver. Head on over to the Vancouver Archives and search for “lots” to have a look. We can see maps of surveyed properties to be sold and advertisements for the land that would become the City of Vancouver. Crucially, all of this property was created from unceded land claimed by the Crown in an enormous act of theft amid a series of pandemics spreading across BC’s First Nations. Locally, the Musqueam, Squamish, and Tsleil-Waututh held lands that were carved up into properties to be granted or sold by the Government of British Columbia.

Let’s take a look. The first lots for sale show up for the townsite of Granville in 1870, some 16 years prior to the (renamed) City of Vancouver’s incorporation (archival links: left, right). The lots, carved out of the government reserve, cover old Gastown between Carrall, Hastings, Cambie, and Water St. The latter remains mostly underwater in the map, but the surveyors imagined the future land that now extends beyond Water. Note the disregard for existing buildings outside of lot lines in the map! Several lots (circled) had already been sold or otherwise issued grants of ownership.

Lots1

 

By 1886, the railroad had been promised to the City, and in turn, Vancouver had been promised to the railroad. The Canadian Pacific Railroad (CPR) obtained enormous land grants from the province in downtown Vancouver, extending south across False Creek, in exchange for establishing their western terminus in the City. They made similar deals with nearby land owners, obtaining every third lot in the West End (famously pre-empted by the Three Greenhorns) and other districts nearby. The land was quickly cleared of trees and sold off in a speculative frenzy. One of the fires used to clear the brush famously ended up burning the whole city down shortly after its incorporation. But the clearing had to continue apace in order to sell off all the new properties being subdivided and marketed abroad.

Lots2

The maps above were printed using the same underlying survey and land subdivision plan, originally authored by CPR land commissioner Lauchlan Hamilton in 1887 (archival links: left, right), whose signature remains on each map (see more from Derek Hayes wonderful Historical Atlas of Vancouver). The more weathered map on the left is annotated and coloured to represent clearing status in 1887-1888, with lots in blue fully cleared, and lots in red just waiting the hauling off of lumber piles. On the right, the same underlying map has been turned into an international sales brochure by 1889, adding lots in Mount Pleasant and highlighting Vancouver’s location alongside travel lines and connections relative to Liverpool, Hong Kong, and Sydney.

The Provincial Government also got in on the sales, slowly releasing their own surveyed and subdivided holdings onto the market via auction. The lots auctioned below would ultimately become the Western third of Kitsilano, centred around McBride Park (archival links: left, right). Sales agents played up the advantageous location of subdivided lots and blocks within lot 540 near the CPR holdings, arguing that the CPR might install a port nearby.

Any Lot of Block not cross-lined on Map herewith, offered for Sale, WILL BE SOLD WITHOUT RESERVE – Adjoining this property the Canadian Pacific Railway Company have located their Docks, it being the nearest Ocean Shipping Point of Vancouver And the place Selected for the Commercial Traffic of the Trans-Pacific Fleet.

Joshua Davies, Auctioneer.

 

Lots3

 

Instead, of course, the CPR subdivided and sold off most of the nearby holdings within their land grant as well. The size of the grant, visible above and comprising roughly a quarter of the present-day City, says a great deal about why Vancouver’s often referred to as a “Company Town.” The company was the CPR, and its business was primarily real estate  (see further discussion in Doug Harris’s great piece on “A Railway, A City, and the Public Regulation of Private Property: CPR v. City of Vancouver“).

By 1906, some provincially owned lots remained for sale in District Lot 540. These were auctioned off with other provincially owned lots available in Hastings Townsite to the east and South Vancouver to the south and west (marked in red on left map below). Of note: western portions of South Vancouver would secede to form Point Grey in 1908, before ultimately reuniting in the amalgamated City Vancouver in 1929 (archival links: left, right).

Lots4

Provincially owned lots in the Hastings Townsite went up for auction again in 1909, as advertised in the map on the right. These were sold on the basis of their proximity to “important and extensive railway yards” associated with the Great Northern Railway and the prominent “99-foot” wide Renfrew Street. Times were given for transit options:

These lots can be reached on the 2:30 Great Northern Railway daily. After 1st April by the First Avenue B.C.E.R. cars, thence along Renfrew Street. Just here will be one of the most important suburban railway stations around the City. TERMS easy; one-fourth cash, BALANCE 6, 12, 18 and 24 months. INTEREST 7%.

Hastings Townsite would vote to amalgamate with the City of Vancouver in 1910. According to an advertisement for the vote in the Vancouver World (dug up by John Mackie):

At last women will have a voice in municipal affairs. On December 10th, if they are registered land owners, women will be able to cast a vote to say whether Hastings Townsite will be annexed by the City of Vancouver or not. In fact, everyone holding property in the said townsite will be given an opportunity. Anglo-Saxons, Orientals, Hindoos, and Africans alike, will be entitled to have a voice in such an important question.

Property ownership entitled owners to a vote in this particular municipal affair, potentially providing a voice to many groups, including most noted above, kept from voting by explicitly sexist and racist legislation at the time. Little wonder that immigrants and others facing discrimination have often devoted their energies toward purchasing property as soon as possible.

Of course, haters gonna hate. And exclusionary racists gonna discriminate by race. By 1927, the westernmost parts of Point Grey were subdivided and put up for sale. Westmount Park was advertised as The Subdivision Superb, an exclusive set of lots still tucked away North of 4th, just west of Blanca before the UBC Endowment Lands. Lots were sold not on the basis of nearby industry, but rather on beautiful views, nearness of beaches and golf courses and, perhaps most crucially, restrictions:

Realizing the necessity of guarding and conserving the character of the development of such a property as Westmount Park, the following restrictions have been placed on the sale of lots:

  1. For a period of 20 years, one residence only may be built on any one lot.
  2. No residence of a vale of less than $4,000 may be erected.
  3. No business or commercial building may be erected.
  4. No lots will or may be sold to Orientals.

In the Westmount subdivision we see covenants restricting properties to single-family residential uses directly tied up with classist and racist exclusion. A good reminder that real estate subdivision and sale simply left to the market was terrible at keeping out “undesirables.” The making of a truly exclusive neighbourhood required market restrictions and careful control over development. This particular version of “community not commodity” may have been quite useful to the exclusive agents at Orr-Hamilton Ltd. in selling the lots of Westmount Park (archival link to brochure below).

Lots5

On a happier note, let’s turn our attention to a bonus map from the Archives. Here we see Kitsilano Indian Reserve No. 6 still set aside on a map of lots in Vancouver in use from 1935 to 1940. Quoting Doug Harris, this was a time period more than twenty years after “…the City and Province induced the Squamish residents to leave the reserve” in 1913, but before “it was formally surrendered” in 1947 (p. 10). We also see the right-of-way forced through by the CPR long before this time. The Squamish reached a multi-million dollar settlement over the shady circumstances of the surrender of the Indian Reserve in 1999. Coming full-circle back to the railroad, in 2002 the Squamish won back the land that had earlier been taken as a right-of-way by the CPR. Of course this win happened only after the CPR, true to form, attempted to sell the land for redevelopment.

Lots6

So it is that the peculiarly shaped parcel of land pictured above – extending beneath and around the Burrard Bridge kind of like a big curvy triangle – was returned to the Squamish Nation (archival link). It’s now under development planning as Sen̓áḵw, a massive project aiming to create some 6,000 dwellings, largely much needed purpose-built rental, all tucked in around the Burrard Bridge. See detailed renderings here.

All in all, it’s way too easy to fall into the trap of naturalizing property as currently recognized on land titles in Vancouver. To forget how it was stolen in the midst of successive pandemics, marked off by survey line, written down on paper, then granted or sold off to the highest bidder. We need reminders. Which is one of many reasons to support the City of Vancouver Archives and all their wonderful digital imaging work. They’ve kept the receipts!

Projections and Self-Fulfilling Prophecies

jointly authored with Jens von Bergmann at MountainMath

 

When people want to live in your city, how many should you let in? On the one hand, this is a moral question. Do you have an obligation to people who don’t already live here? On the other hand, it’s a moot question. At least in Canada, cities don’t have the power to control migration.

BUT WAIT! Cities DO have power over how many new dwellings to allow. This actually changes our moral question a bit. Cities can’t keep people out, but because they have power over dwellings, municipalities can control how many people get to remain in. As a result, if you don’t allow any new dwellings when people want to live in your city then rich people will generally outbid poor people for the housing that’s left.

It may be the case that municipal politicians are fine with rich folk replacing the poor folk in their cities while their own housing rapidly appreciates in price. Why let any new housing get built? “No thanks, we’re full!” But they can’t always SAY this. Especially in cities full of renters that generally support progressive and inclusive values.

So what to do? Two paths are readily available. One: transform the moral question (“isn’t it terrible that developers make money off building housing?”) Two: turn the moral question into a narrow technocratic one instead. Let’s explore this latter option a bit more, because it’s really interesting and sits well within our wheelhouse (mathematician and demographer).

Here in the City of Vancouver, a new motion was just launched, titled Recalibrating the Vancouver Housing Strategy (RVHS). There are some good initiatives in this motion, but the main thrust and motivation is to turn the moral question of how many people get to remain in Vancouver into the narrow technocratic question of how do we forecast population growth? As any demographer can tell you, this can be tricky, especially when it comes to forecasting for municipalities. But there’s a naive kind of work-around some people use when they don’t follow demographic techniques and concerns very closely and don’t want to think too hard about the question at hand. They simply turn the population forecast into a projection forward from how a city grew in the past.

This is a neat trick! Especially if you’re in a city that’s limited new dwellings in the past and thereby kept its population growth to a minimum and you want to keep it that way. “The evidence suggests we haven’t been growing very fast, so we shouldn’t add much more housing.” With a little bit of hand-waving, the number of dwellings allowed by the city is reimagined as something that can be tailored to meet the forecast rather than the central determinative factor of the forecast.

Is this the kind of thing that could happen in Vancouver? Before we get into the motion, let’s just quickly look at Vancouver’s recent past. We know prices and rents rose rapidly through 2016 (and beyond), which is pretty good evidence that we didn’t add enough housing for the people who wanted to live here all by itself. But how did the City of Vancouver grow relative to the rest of the region? It grew more slowly. (“No thanks! We’re full!”) Did we lose poor people and replace them with rich people as a result? Yap, this is exactly what has happend in the City of Vancouver, which has lost lower and middle income people, and gained high-income people, at a faster pace than the surrounding Metro area.

2005-2015_rel_change-1

 

The Motion

Now let’s get back to that RVHS motion, starting with part A:

THAT Council direct staff to revisit the Housing Vancouver Strategy targets to align with historical and projected population growth based on census data.

This is a vague statement. There are, of course, many ways to “align” something (Dungeons and Dragons fans may be immediately reminded of the nine different alignments readily found therein). There are also many ways to project population growth. These often rely upon multiple sources of data. Birth rates, death rates, age structure, labour market statistics, and net migration rates serve as typical baseline sources of information for demographers, and are usually gathered from all manner of data (e.g. vital statistics, surveys, policy-based immigration projections, etc.) rather than simply historical census data. So how is the author of this particular motion imagining more specific alignments and projections? The answer can probably be found in the WHEREAS sections 4 and 5:

Population growth has been consistent at approximately 1% per annum over the past 20 years according to Statistics Canada census data. Based on this historical trend, a similar growth rate for the coming decade would amount to a population increase of around 66,000. In the City of Vancouver, the average household size is 2.2 individuals per dwelling unit (or “home”);

The target of 72,000 new homes across Vancouver in the next 10 years multiplied by 2.2 would mean a population increase of 158,400 – more than twice the historical rate. A projected historical rate of population growth would imply instead a need for roughly 30,000 new housing units over the coming decade;

We’ve left the refined techniques of demography behind here, as well as the determinative forces of births, deaths, and moves. Indeed, people pretty much disappear and their dwellings get only scare-quotes as homes. But let’s follow the math we do get and try and understand what projecting past trends means in terms of numbers (leaving aside if we agree that things went splendid and we should just keep going the same way). Let’s try and reproduce the estimation of new housing units assuming we hold the 20 year trends in the two mentioned metrics, population and household size, constant.

The 1% annual growth rate roughly checks out, although there have been variations.

cov-vs-metro-pop-growth-1

 

And population in the City has grown consistently at a lower rate than overall Metro Vancouver population. In fact, if the City of Vancouver had grown at the same rate as Metro Vancouver over those 20 years, Vancouver would have had 60,000 more people within city limits in 2016. But maybe people would just rather live farther out in the surrounding suburbs? Again, there are variations, but overall that is not what the price and rent data tell us.

rent-unnamed-chunk-3-1

 

People want to live in Vancouver. But they often settle for living farther out, based on the specifics of what they want and can afford. The competition for the limited number of dwellings in Vancouver drives up prices here relative to surrounding municipalities.

So what to make of the close relationship between population growth and dwelling units added? It’s a real relationship.

dwelling-pop-unnamed-chunk-4-1

 

The motion, as presented, seems to suggest that this close relationship is evidence that we’re projecting population growth really well, thereby allowing almost perfectly enough new housing to meet population needs. Is this what we’re doing? Well, no. In fact, the amount of new housing allowed sets a cap on population growth that can only be exceeded by increasing household size (which in many cases cities have also made illegal)1 or decreasing the number of empty dwellings.

There is broad support for decreasing the number of empty dwellings, and both the City of Vancouver and the Province of British Columbia have put in place taxes on vacant properties and their owners to do just that. Have they succeeded? Quite possibly! But compared to other municipalities, Vancouver’s vacancies (as recorded in the Census) looked relatively normal prior to the new taxes, despite persistent rumours of some mythical oversupply. After the new taxes, administrative data reveals there aren’t many taxable units left vacant at all (~1%).

What about household size? The motion suggests imposing a constant for Vancouver, expecting 2.2 people per household. But household size is not staying constant. It’s falling all across Canada, due to a combination of forces (aging of the population, declining childbearing, changes in partnership, the rise of people living alone). We also know that as people get richer, they tend to occupy more space. And, as pointed out above, Vancouver’s been getting richer.

hh-size-chunk-5-1

 

As we see, household size in the City of Vancouver has continuously declined over the years, a trend that has significant impact on the relationship between housing and population growth. Sticking with the bad assumption that past population growth should be predictive of future housing needs, we can see that we’re still going to need more housing per person than in the past. Projecting these trends forward, lazily anchored at the 2016 census data, gives an increase in population in private households of about 67,000 and a corresponding increase in 41,000 households (aka occupied dwelling units). And that is not yet accounting for the increase in population in non-private households that Vancouver has experienced, like retirement homes or similar institutional housing.

So if the RVHS motion points us toward a bad way to do population projections, then how should one do it? There are lots of models to look at, but given that people want to live in Vancouver, a key ingredient in any model should be how much housing will be allowed. Conditional on allowing a given amount of housing, we can attempt to forecast how many people will come. But this moves us back from narrow technical questions (which we’re more than happy to continue exploring in depth!) toward the central moral question at hand. How many people are we comfortable allowing to live in Vancouver? Because if we allow more housing, more people will come. And if we allow more housing, we’ll also allow more of those currently at risk of feeling unwanted in Vancouver to stay.

That begs the question: What would be the problem with allowing more housing? The last WHEREAS of the RVHS motion holds an answer to that.

A revised and more accurate understanding of demographic needs and demand will assist in properly planning for the post COVID-19 reality. Setting excessively high targets will pressure the City of Vancouver to grant significant amounts of density at a low price, in an attempt to induce housing construction approaching the HVS targets. This will cost the City of Vancouver potential revenue, and will mean that the City abandons its commitment to having growth pay for itself.

In short, housing might get cheaper. Which incidentally is quite in line the goals of the Vancouver Housing Strategy.

But there are a couple things here that need a bit more unpacking. First, from the title throughout the motion and showing up here again are mentions of planning for a “post COVID-19 reality.” To put it bluntly, this is odd. These parts of the motion caution us against assuming what comes next will reflect what came before. But, as discussed above, this is exactly the assumption the rest of the motion says we should make, resting as it does upon a very selective reading of Vancouver’s recent population growth. Weird contradiction. But then again, pretty much the same language has been employed way before COVID-19 was on anyone’s radar, suggesting that COVID-19 has just been tacked on for extra effect.

Second, the notion that “growth pay for itself” sounds quite reasonable, but it’s not clear what that means in practice. In Vancouver, new housing projects pay a variety of municipal fees, DCLs, CACs and additional engineering fees upfront, and annual property taxes thereafter. How much of the overall cost of living in the city should be charged upfront, and how much should be charged over the lifetime of the housing as property taxes? That’s a political question that Vancouver should have a discussion on.

Charging high entry fees keeps prices high, not just of new housing but of all housing. It encourages treating housing as an investment, with low holding costs (property taxes) and high barriers to increasing housing even as population pressures keep prices and rents rising.

Charging a lower entry tax and collecting a higher portion as property taxes later can lower the entry point to housing and spreads the costs out over the lifetime of the dwelling unit. This treats housing as a place to live, lowering the barriers to new housing construction and asking people to pay for city services and amenities over their time living in the city.

The (sort of) good parts of the motion

Let’s end with a few bright notes. There are some good parts to the motion! We like data and Part B asks:

THAT Council direct staff to provide annual historical data since 2000 on the number of units approved through rezoning, the breakdown of housing types that have been approved, housing starts and net housing completions, and estimated zoned capacity for the City of Vancouver.

This part of the motion is asking for better data, but it needs refinement. As it is right now it is hard to see what it will accomplish.

Number of units approved through rezoning is hard to interpret unless it is accompanied by more detail on how many of these units actually got built. Take the approved first version of the Oakridge development for example. A massive number of units got approved, yet the project died when drilling found an aquifer that precluded the project from going forward as approved. Several years later, a different proposal got approved, for the data on approvals to be useful we need to know what happened to those units.

Monthly data on housing starts is already easily available, asking the data be reproduced adds zero value and amounts to a waste of staff time.

Net housing completions is an important number, but very hard to do in Vancouver, given our high reliance on informal housing. It is still worthwhile to try and approximate this, but the motion should be clearer what part staff should focus on beyond the data on completions, demolitions and secondary suite estimates that we already have.

Estimates of zoned capacity is a great stat to get clarity on. Some vague estimate has been making the rounds for a while after surfacing in a consultant report, with next to no detail how it was derived. Having an estimate with a clear methodology would be a great addition to inform Vancouver housing policies.

Part B is a good and simple ask:

THAT Council direct staff to clarify whether the Vancouver Housing Strategy targets refer to net housing completions or gross housing completions.

Part E is mostly redundant:

THAT Council direct staff to provide detailed inventory data through the Open Data Portal4 of housing starts, development projects anticipated in the pipeline (including form and type of units), and existing zoned capacity (disaggregated by local area) to inform this work.

The open data portal already has detailed information on housing units in the pipeline. The information could be improved, but this ask is useless unless it specified how. As mentioned before, detailed information on housing starts is already easily available as open data, monthly stats by structural type and intended market, down to the census tract level. It is less helpful than the other parts above and risks directing staff resources away from other project just to replicate what’s already out there.

Bottom line

There’s no way around it. How many dwellings to allow in a city is ultimately a moral question rather than a technocratic one. Given the overwhelming evidence that people want to live in places like Vancouver, population forecasts necessarily reflect first and foremost how many new dwellings we’re willing to allow. In technical terms, it’s silly to imagine we’re meeting the needs of population growth when we’re in fact setting a hard cap on population growth. In moral terms, we come back to the central question: Are we planning for kicking poor people out? Or are we open to inviting more people in?

As usual, the code underlying the stats and graphs is available on GitHub for anyone to reproduce or appropriate for their own use. And if you want to read (much) more about how to know if you have enough housing, check our simple metrics post.


  1. For example the City of of Vancouver only allows at most one kitchen per dwelling unit and limits the number of unrelated individuals sharing a dwelling to 3 (+ 2 boarders or lodgers) to restrict sharing of homes. [return]

How many owner-occupiers can already defer their Property Taxes in BC?

We’re rolling around to property tax time, and municipalities are about to feel the COVID-19 crunch. The Mayors of Metro Vancouver have been leading an ask of the province to backstop municipal finances given that many residents and businesses may fail to pay their property taxes. Indeed, the City of Vancouver recently commissioned a survey indicating that due to job and income losses, some 25% of home owners in the city would be paying less than half of their 2020 property tax bills.

One ask from the Metro Mayors is for the province to expand it’s property tax deferral program to cover those not currently included. As they advocate:

propertytaxdefer-2

This, of course, is a big ask! But just how big? Here I want to separate out the ask for businesses and non-profits (where the ask is very big indeed), and focus on homeowners. And after all, homeowners are where the City has focused its survey. So how many homeowners are not currently covered by provincial tax deferment options?

There are two programs covered under provincial tax deferment: the regular program and the program for families with children. The regular program is open to any property owners (of a primary residence) over the age of 55, as well as surviving spouses (of any age) and persons with disabilities. The province effectively puts a lien on your property to secure the debt and charges 1.95% interest on outstanding taxes owed. The families with children program is open to anyone living with or supporting children under age 18, or children enrolled in education (e.g. university), or children with disabilities of any age, and the interest charged under this program (3.95%) is higher.

Just focusing on the two main groups covered, homeowners age 55+ and families with children, we can draw upon census data from 2016 to roughly estimate how many owner-occupied households are likely covered by existing tax deferment options. The answer: the vast majority, over four-in-five. Why? Because home owners are especially likely to be old or have children. Here are owner-occupier households in BC by age of primary maintainer and presence of children*:

propertytaxdefer-3

Overall this is good news! Most resident homeowners in BC are already covered under property tax deferment options. And the province will likely see a big uptake in deferments this year through existing programs. But those who fail to qualify also deserve provincial attention. And, of course, renters deserve a lot more attention too. I’d argue that it’s also well worth supporting expansion of the property tax deferral program more broadly since this also supports municipal finances at a very trying time. Moreover, if the province expands the program at family program interest rates, it may also help support provincial coffers down the road.

 

*- Here I lump the relatively tiny set of multiple family households into those without children, following the general household type categorization. See StatCan Table 98-400-X2016226 to play around with your own operationalizations.

So are you two a couple now? Asking for the BC Government

BC has been lauded for rolling out an assistance program for renters, unlike basically every other province. At the same time, BC’s also been criticized for the perceived inadequacy of that rental assistance program, as well as the fact that it literally goes straight to landlords. In conjunction with the temporary eviction moratorium, it would appear that the BC Temporary Rental Supplement (BC-TRS) is really aimed at supporting landlord incomes and easing tenant-landlord relations to avoid a rash of evictions once the moratorium has been lifted.

Here I want to question another aspect of the program, at least as we’ve seen it so far: What’s it got against couples?

The BC Temporary Rental Supplement, as announced today, provides $300 per single person or couple household, and $500 per household with dependents. But roommates can apply separately for benefits, and it would appear each roommate is eligible for a $300 or (if living with a dependent) $500 rent supplement. Here are relevant items from the FAQ:*

Rental_Assist_1This means the “household” definition being applied by the province – whereby roommates constitute separate households – best matches the “family” definition of the Census, whereby family is defined by a couple (married or common-law) or parent-child relationship. The Census considers roommates as members of the same household, but unrelated, and hence not members of a family.

Why does it matter? Well, what’s the distinction between roommates and a couple?** Because if you’re a COUPLE you max out at a $500 benefit with children or a $300 benefit without. But if you’re ROOMMATES, it appears you qualify for $300 each, or more if there are children involved, maxing you out at $600+. In effect, couples have their status turned against them in terms of government benefits.

Interestingly, this isn’t the first time the current BC government has zeroed in on couple status as a determinant of less than favorable policy treatment. The BC Speculation and Vacancy Tax hinges upon marital status in terms of whether overseas partner incomes get counted toward family incomes, distinguishing “satellite families” hit with higher property taxes from everyone else. In effect, if you own a home this is a huge disincentive for formalizing, declaring, or maintaining transnational relationships, at least if your partner potentially earns more than you. BC tax policy says it’s better for you to split up than stay coupled with anyone outside of Canada, just as BC renter support policies seem to tell us it’s better to be single (with a roommate) than part of a couple.

One way of looking at the government position on rentals is that couples might be considered more resilient than singles. So singles, including roommates as well as single parents (who get $500), need more help and more allowances. And as I wrote previously, with respect to rental supports this might well be correct. Singles and single parents make up the bulk of those in core housing need. I’m happy that the BC government is providing special help to those with dependents, even if I wish the amounts were higher.

HouseholdsRenting-fx2

It’s also the case, as in my past research auditing rental listings, that BC’s tipping of the scales against renting couples might actually counteract some of the beneficial treatment they usually receive in the rental market, where landlords tend to discriminate against single parents and some same-sex couples (who may, in some cases, have been taken for roommates). Finally, policy is being rolled out at a ridiculously fast speed, which is important and a success in its own right because people are in need of money now. But that speed is bound to come at a cost in terms of care in crafting policies. We’ll see plenty of mistakes and unintended consequences of fast policy roll-out in the days to come. We shouldn’t forget the urgency behind the roll-out, even as we offer up critiques and fixes.

That said, we’re left with a fun contrast. If Pierre Trudeau famously declared “there’s no place for the state in the bedrooms of the nation,” the government of BC still wants to know: are you two an item?

 

UPDATE (Apr 12, 2020):  Another interpretation (in this case my partner’s) is that the BC – TRS is geared entirely toward assumptions about how many bedrooms different kinds of households need and what the associated costs might be. The logic being that couples might only need 1BR, whereas parents with children need at least a 2BR, and roommates are (ironically) assumed to sleep in separate bedrooms, also requiring at least a 2BR. This interpretation actually mirrors the logic of the Canadian National Occupancy Standards defining the suitability aspect of the Core Housing Needs measure. Accordingly, BC-TRS payments could be designed simply to go up in response to anticipated bedroom need. I like this interpretation a lot, so I thought I’d share it too! (I hinted at the importance of considering bedroom need in my previous post on the renter benefit, only I didn’t think they’d adopt the couple assumption from the National Occupancy Standards, which I’ve also researched in the past! Kicking myself a little that I didn’t think of this interpretation first, but also patting myself on the back for settling down with someone more clever than me…)

 

*- Yeah, also your adult kids don’t qualify as roommates (item 18) and you don’t get any assistance if your landlord is also a family member (item 19).

**- As it happens, I asked just this question in my dissertation… though from a viewpoint embedded within demography (i.e. are people more likely to cohabit with an unmarried partner in response to housing shortages, making them like roommates, or less likely, making them act more like married couples?) In the context of Swedish demography, easier access to housing meant greater likelihood of cohabitation, providing evidence that cohabiting couples tended to be acting more like married couples than economizing roommates. BUT, there’s a lot of grey in there. Especially insofar as we usually leave it to people to define their own relationships.