As summer's end nears, look for civic politics to gear up

Post by Daniel Fontaine in

20 comments

sunset
As the sun sets on summer, get ready for more coverage of Election 2011

If you’re a regular reader you may have noticed that we’ve cut back on the number of daily posts on this blog over the last few weeks. As you can appreciate, with Mike Klassen no longer providing his regular daily analysis of urban issues, we’ve been a tad short-staffed lately.

I’m also abundantly aware that in a few short weeks it will be on hands on deck as we swing into the upcoming civic election. As a result, I thought it was best if we pulled back a bit in August in order to provide time to prepare for a very robust and active fall season.

After Labour Day, we hope to provide our readers with as much coverage about the upcoming BC municipal elections as possible. Who is in the lead? Who is trailing? Are the polls really reflecting the reality out there? These are the kinds of questions we’ll be answering leading up to the Nov 19th election.

I’d also like to open up the floor to you. Are there issues that you’d like to see your civic candidates discuss on the campaign trail? If so, what are they? I am encouraging all of you to provide us (using a pseudonym or otherwise) what you think should be discussed by our politicos.

All you have to do is submit your issue in 100 words or less to daniel@citycaucus.com. We will then periodically post a compilation of those ideas in a few feature posts. We may end up using some of your ideas to help formulate a formal candidate questionnaire which all mayors and councilors will be asked to fill out. In turn, we will publish their responses online.

Needless to say we won’t have the big budgets or staff to provide the same kind of coverage the mainstream media will provide. Unlike some other local blogs, we also don’t have the resources of wealthy charitable foundations to hire journalism students and beat reporters. However, as has been demonstrated in the last three years, our readers can expect the unexpected from CityCaucus.com. You just never know what you’ll wake up to in our “Breaking News” section which we proudly reserve only for real breaking news.

We’ve also stored up a few interesting FOI responses and plan to release them in the weeks to come. In addition, we’ll also continue covering city hall and monitor closely how a new era of a politicized civil service in Vancouver will interact with the politicians and media during the election.

Now that it’s all but assured that we won’t have a provincial election this fall, the focus will be on all things municipal. It’s a topic we’re a tad familiar with here at CityCaucus.com.

We’re definitely looking forward to waking up from our summer slumber and getting back into the thick of things. We hope you are too!

- Post by Daniel. You can follow us on Twitter @CityCaucus. Or you can "like" us at Facebook.com/CityCaucus.

20 Comments

There are documents available at both Vancouver and New Westminster City Hall indicating some very serious civic elction issues.

Thank you for reaching out Daniel.

In addition to the obvious topics (transparency, bike lanes, transit and its funding, homelessness, four pillars, etc.) I would really like to understand the policy options on two themes:

1. Housing Affordability. I think this is becoming a key issue for Vancouver's economic viability. I know that I can no longer attract quality management or technical talent to Vancouver because of housing costs and I have heard others say the same.

2. Housing Market Sustainability. What will happen if there is a serious & sharp correction to real estate markets and what will the city need to do to adjust.

Of course these two issues go together.

@ Steven - A logical third point to your housing questions would be what the City is doing to become less dependent on revenue from property development. I don't know that the City is necessarily developer friendly; rather I think they are stuck having to approve a certain amount of up zoning each year in order to meet their revenue targets. If Developments are going to be approved on merit and not revenue potential, what would each party do to fill that gap? Cut services? If so, which ones?

Firstly, I want civic politicians to stop making promises about things they have absolutely no control over. Steven, how can a civic government control #1 and #2?

I would prefer they spend their time and energy on things they can actually influence - like becoming cost efficient in the engineering and planning departments; projecting budgets 5 years out so we have more time to plan; finding out why Surrey and Nanaimo can deliver civic services as a fraction of the cost per resident - (if there is a good reason... fine but let's figure it out; deciding what our spending priorities might be rather than always hold the public hostage with the threat of fewer police; figure out what the city can do to help businesses survive and thrive so good paying jobs and tax revenues remain in the city.


@Julia

You are absolutely right - not only do governments not have the competence or even the means to tackle many of these issues, but we can't afford to expand the scope of civic services. Instead we should focus on delivering existing services better at less cost.

And Steven, if you cannot afford to pay employees enough to attract them to Vancouver, then perhaps your business model is not viable or you should relocate to a lower cost location. Perhaps you could explain to me why it is wrong to "subsidize" car drivers so that they can afford to drive to a job in Vancouver yet it is ok to subsidize housing for your employees so they can ride to work on a bicycle.

Steve, the answer to your first question is found in Paul's comment - the end to reliance on bonus revenue that comes from development that may or may not be there year over year (as we learned in 2008)

Answer to question 2 - regardless of price of housing, the tax revenue remitted to the city does not change so what difference does it make in a civic election?

Try reading a bit more carefully. I am not arguing in favour of housing subsidies. I am generally opposed to subsidies of any kind, including externalities. I would even get rid of SR&ED, though I know this is not a popular position amongst my peers. I am saying that housing affordability is a big issue in Vancouver and that it is beginning to crimp our economic potential. Do you disagree with this?

The median salary at my three key investee companies is more than $100K so these are reasonably high-paying jobs. In the tech indutry people can pretty much live where they like and many are now choosing not to live in Vancouver.

Hi Julia - I quite agree. And I like all of your other points as well. It may be there is nothing the city can do about affordability, but I would like to hear other positions on this. I don't think anyone actually understands all of the reasons why housing prices are what they are in Vancouver so policies are likely to have unintended consequences. But we can't pretend that it is not an issue.

As to the impact on the city if the housing bubble pops (and I think it is a bubble and that bubbles inevitably pop), there is a lot of economic activity in Vancouver that depends on development. If there is a major slump this is likely to have many cascading impacts - more unemploymnet, more social problems asscociated with unemploymnet, loss of developer subsidies for infrastructure, higher demands for some services, lower demands for others, people pleading for tax releif on their property tax ... It seems unlikely that there will be as little impact as you suggest. I believe a responsible government should have contingency plans for this. And it is quite likely that they exist somewhere but that people do not want to talk about them for fear of spooking nervous markets. I will be asonished in Vision or the NPA address either issue head on.

Steven, I submit that the majority of problems that may result from a correction in the housing market will fall at the feet of the province and the feds - less taxes remitted (federal/provincial), requests for social assistance (provincial), pleading for tax relief - that would be provincial as well.

The biggest challenge for the city is how do stop being reliant on development revenue and that should be happening regardless of markets because you can't count on it. It should be windfall money not core revenue and we should control our spending accordingly.

Not only that, if we continue to put our heads in the sand and believe that businesses can pay far more than their fair of property taxes without risk of them picking up and moving their jobs elsewhere - we are more foolish than I thought.

As you say...if professionals are choosing not to live in Vancouver because of affordability, a significant chunk of the business community can say the same thing.

I really don't know what magic bullet you think exists when Economics 101 tells you that if Vancouver is a very desireable place to live, then there is a very good chance that more people will want to live here than there are places to live - demand will exceed supply. Given that supply is relatively fixed, the market sorts this out through prices.

If you don't like this outcome of higher prices, then you can reduce demand by making the City less desireable (Vision seems to be working on this angle). Or you can ration housing through subsidized housing through means tests.

You say you are opposed to subsidies yet any scheme that distorts the market price for housing is a subsidy for those lucky enough to win the lottery. And at the same time you are concerned about affordability, you like the City's Green Manifesto which will only add costs to housing. (The "Greenest Building" recently completed in Seattle cost a third more than conventional construction and was only economically viable because of a grant from a private foundation).

It is time to get real and recognize the limitations of government.

I am not an expert in this area so I am hoping for other people to propose ideas, especially people in the NPA or Vision.

Some ideas (possibly naive) that might help to free up the market. (i) Do not require any car parking. If there is a true demand for car parking then the market will create it. (ii) Separate ownership of car parking from ownerhsip of the dwelling (this has been effective in the South End of Boston). (iii) Allow for more infill housing and more density. (iv) Make it easier, much easier, to have suites in every part of the city. (v) Allow much more mixed zoning so that business, light industyr and residential can be co-located. (vi) Review current zoning and developer subsidies to see what market distoring impacts they are having and if these should be removed.

At other levels of government, level the playing field between renters and buyers (the CHMC subsidizes buyers at the expense of renters). Consider tightening mortagage requirements.

Is it your position that nothing can or should be done? Having lived through the 1990 Tokyo bubble and the 2008 US bubble I hope you are wrong. Or are you one of those hard-core Chicago school EMH people who believe that bubbles cannot exist on theoretical grounds?

Thanks Julia. That makes sense. Is part of the problem that the municipal levels of government have too few optoins when it comes to taxation policy, so overrely on property taxes and developer subsidies?

Bill, I wonder if you are one of those people who assumes that the staus quo is not subsidized. Externalities are real costs. And the services provided by the environment are real economic benefits. If you want efficent markets and clear price signals then you want to build these into price mechanisms. Many of the subsidies to the staus quo are deeply burried in the system and many of the people who benefit from them object when they are called out.Housing and transit are a good example of this. There is a lot of cost shifting going on.

"Or are you one of those hard-core Chicago school EMH people who believe that bubbles cannot exist on theoretical grounds?"

I believe that people generally act in their own perceived best interests but that is not the same as acting rationally as demonstrated by the results of the HST referendum.

Demand that is driven primarily by the belief that prices will increase significantly will often be self fulfilling, reinforcing the belief and pushing prices even higher until something triggers a change in sentiment. With demand now driven by the belief that prices will decline, prices will usually decline much faster than they went up, hence the “bubble” descriptor.

No doubt, low mortgage interest rates have been a major factor in the rise of housing prices so it is reasonable to expect a price correction should interest rates increase rapidly. I believe rates will increase gradually and expect housing prices to be soft or experience some decline but not collapse. You could very well be right if price speculation is a significant factor in the price differential for Vancouver real estate rather than attributable to the “desirability” factor.

I don’t think your housing suggestions will move the price dial very much but they are valid suggestions that merit consideration.

"I wonder if you are one of those people who assumes that the staus quo is not subsidized."

You have described accelerated write off of exploration and capital costs as subsidies for the oil industry. How are these different from deductions for union dues (subsidize union activities), tuition (subsidize students), age exemption (subsidize seniors), pension contributions (subsidize retirement), medical expenses (subsidize sick people).... and you can see the list is as long as the Income Tax Act. In fact, if you were sincere in wanting to abolish all embedded subsidies, you would support a personal income tax that was a flat tax on total income – no deductions and only one rate since a progressive tax structure subsidizes the low wage earners. What do you think?

Subsidies are in the eye of the receiver – if you get the benefit, I think it’s a subsidy but if I get it, it is just good social or economic policy.

The Thought of The Evening

"Duelists - the 'It's not you, it's me' routine, only with swords, in your case with... words, just drop the first 's', eh!?"

Personal feud? Don't think so, contenders of a duel don't menace anyone but each other.
Your exchange, Bill & Steven is really interesting, as I can see two completely different sides.

My question is 'Do you even remember what started the "fight"?'
Was it about affordable housing, business opportunities, subsidies, or elections... dunno.

One thing, do never ever put politicians on a pedestal or political parties. IMHO I think we could be able to manage our cities our province and our country without any of them. Period.

En garde!
http://www.youtube.com/watch?v=3VVHSounmrE

We live in Vancouver and this keeps us busy.

It's not personal and it is certainly not in support of a particular political party but of two different world views - one that believes government should have as little a role as possible in our lives and be the referee rather than be an active player and meddle in every aspect.

Yup, their are subsidies laced through the system and it is time to clear them out. I quite agree with most of your list. The distinction is that (i) I believe there are such things as public goods and that the government should make prudent investments in them and (ii) that markets are a social technology, not a natural artifact, and as a technology the design can be improved through adaptation and creative diestruction. I also recognize that socieites with a lower gini index tend to be more successful and that a sensible social policy will address this.

Thanks, you are right that we have wandered far off topic. My original response to Daniel's question was that (i) I am concerned about housing affordability in Vancouver and would like to know Vision's and NPA's views on what, if anything, can or should be done about it and (ii) I am concerned about what will happen to Vancouver's economy if (when) housing prices decline sharply.

The question of what, if anything, the municipal government can do about the first point is a good one. The answer may well be 'very little' and in that case I would like Vision and the NPA to say so. But I would still like to understand what impact that would have on the city's finances. The most coherent responses on this point were Julia's (thank you Julia) but I still hope to hear from the political class.

Has anybody else noticed that Vision was trolling the neighbourhood by Jericho Beach?

They are having a movie night in the park " the Princess Bride" .
A family friendly movie on the last night of the long weekend.
Keep your kids up late, why not?

Saw Mike Lombardi. etc,etc,etc,trawling the
neighbourhood.

Why are our parks being used for politics?

I AM SO SICK OF POLITICIANS>
ALL PARTIES.

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