A.M.R. or A.M.I. Not?

Christmas comes to montreal

Montreal          As housing becomes a larger and larger issue in city after city around the world in the throes of development and attendant gentrification, not only has inclusionary zoning in new construction of units become an issue, but so have the policy questions of how to define affordability.  In campaign discussions at the ACORN Canada Year End/Year Beginning meeting inevitably these questions arose prominently in the face of new proposals and committee deliberations about policy in various forums in Toronto.

Inclusionary zoning of course is not a new policy program. Where enacted it requires a certain percentage of new units built by developers to include a fixed percentage of the units to be set aside as affordable housing.  New York, London, San Francisco, and many other urban centers as well as cities from New Orleans to Vancouver have such requirements or are in the process of implementing them.  Where there was easy agreement in the ACORN Canada discussion was over the demand for 30% of the units to be set aside.  Consensus over the demand does not mean achievement is assured or certainly easy.  Most municipal requirements are much smaller where they even exist. More vexing is that even winning 30% would not solve the affordable housing crisis in Toronto, or other cities for that matter, since the need is so great for constructing more public or social housing, rather than a simple allowance of units from private development.

Nonetheless, central to any program’s success is defining affordability, and it is here that too often the devil emerges in the details, especially in debates over the role of AMR or average market rents and AMI or area median income.

Developers and some cities have used average market rents to define the set aside of affordable units.   Affordable units in a project might be 70 or 80% of average market rents then or some other percentage.  This doesn’t stop gentrification because as rents are escalating anything from 50% of AMR to 80% of AMR can still price out low-and-moderate income families.  London and New York are good examples.  Further, if eligibility for units is defined by area median income, as gentrification and wealth inequity continues to explode, so-called affordable units at 80% of area median income mean that lower income and working families are also excluded because affordability can be over $100,000 in annual income, cementing gentrification even as the community and our organizations fight to prevent displacement.

ACORN’s position everywhere is that affordability for the units, no matter the percentage of the set aside or average market rents or area median income, should mean rent accounts for only a certain fixed percentage of a family’s income, normally meaning no more than 30%.  In some policy discussions endless complexity is introduced with debates over what allotment of the set asides should go to different segments of the lower income community, but the fear is that this confuses the campaign by blurring the lines for politicians and the public, especially if the organization is lured into using average median income as the delineating line between segments of the low-and-moderate income community.

Starting from the point of trying to guarantee that there will permanently be affordable housing in a city allowing lower income families to continue to be part of urban environments they have helped build and where they have always lived, the arguments are difficult because the slope is so slippery.  Letting area median income be a defining point seems to almost be a guarantee of inevitable displacement and gentrification.  Better to define eligibility based on a percentage of the poverty index similar to what is used under the Affordable Care Act or other measures, and work from the bottom up, rather than use area median income that means working from the top of the income averages down, and inevitably eliminating the poor.

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The Ironies of Vancouver: The Post-Gentrified City

Vancouver       Vancouver in British Columbia, Canada may be a case study of the post-gentrified city.  Average housing prices have dropped all the way down to $1.4 million per house.  The Vancouver Sun reported that a Habitat for Humanity house had sold for $330,000.  ACORN Canada’s office and all of our groups are in the working-class suburbs of Burnaby, New Westminster, Surrey, and other communities.  It is difficult for low and moderate-income families to afford to even think about living in Vancouver.

The government is progressive.  Leadership has been stable with an excellent and forward-thinking mayor in Gregor Robertson for a number of years.  There is no lack of people trying to do the right thing.  There is no confusion at the top or at the bottom of the economic and political ladders that housing is unaffordable.

So, what does Vancouver do to assure that housing is affordable and to prevent the city from just become the living and working space for the rich and elite?

While in the city for the ACORN Canada board meeting and annual general meeting, the next four years city budget for capital or big construction and development projects was published.  The capital budget is big time for the coming four years, $2.6 billion.  Surprisingly though, 55% of that budget or $1.44 billion the Sun reported are “earmarked income from ‘development contributions,’ which are raised by charging real estate developers.”  At first glance, we might say that’s great, “Make them pay!”  At second glance it is hard not to think that the city of Vancouver may be riding the sharks as much as regulating them.  If developer money is funding so much of capital expenditures, then the city also depends on new development, which gives developers a lot of leverage

In fact, when it comes to affordable housing and child-care spaces, which many might argue are the top priorities for lower income and working families in the city, the capital budget is scary.  First, it only provides for 1200 to 1600 nonmarket rental house and 1000 child-care spaces, which annually is only 300 to 400 units per year and 250 child care spaces. That’s way too little.  The fiscal number for the construction was $539 million and the budget says that 99% or $535 would come from development contributions, meaning the city and its taxpayers have zero skin in those projects.  For the $117 million for child-care development contributions are 94%.

The Sun helpfully defines these development contributions.

“Development cost levies…are typically a standard calculation.  Community amenity contributions tend to be individually negotiated between the city and a developer over rezoning for a specific project and can be paid in straight cash or the building of an on-site amenity such as a pool or community center.”

One is a tax and the other is what we would normally see emerge from community benefit agreements, although it almost seems like the developer is driving the decision to benefit their own project, rather than the community or the city.  An amenity would seem to accelerate the rewards for gentrification as well.

It would seem like a rich, gentrified, progressive city like Vancouver could – and should – be doing so much more.

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