housing matters! · real estate speculation, densification and gentrification, affluent newcomers...

HOUSING MATTERS! The James Bay Housing Report – Spring 2017 Highlights of the housing crisis in Victoria and its impact on the residents of James Bay, in terms of affordability, availability, income inequality and quality of life.

2017

Housing Advocate James Bay New Horizons Society

3/23/2017

2 The James Bay Housing Report – Spring 2017

This document has been prepared by Victoria Adams, Housing Advocate, James Bay

New Horizons Society, Victoria, B.C. e: [email protected]– March 23, 2017.


HOUSING MATTERS! The James Bay Housing Report – Spring 2017

1. Introduction

This report focuses on making accessible, improved data on housing and ownership trends and

socio-economic information about households in the James Bay neighbourhood.

A vital part of the local area planning process, is to clarify the place and role of our

neighbourhood in contributing to a sustainable vision of B.C.’s capital City in the 21st century.

For this reason, it raises an important question: “What can people do about a growing trend of

real estate speculation, densification and gentrification, affluent newcomers and tourists

displacing long-term residents that is fuelling a crisis of unaffordable, unavailable housing and

creating a widespread insecurity of belonging?

2. The Context: Victoria’s Housing Characteristics

“Victoria is the least affordable smaller housing market in Canada” (Times Colonist, January

24, 2017.) The 2017 Demographia International Housing Affordability Survey may have ranked

Vancouver the third most expensive housing market in the world after Hong Kong and Sydney,

Australia, but Victoria now ranks 381 out of 406 as one of the most costly cities to find a home.

There is now an 8.1 ratio between Victoria’s median income of $67,300 and what is required to

buy a house with a median cost of $542,400. Demographia defines housing markets as

affordable when the median price is less than three times the median household income.

Rapidly escalating house prices are related to Victoria’s desirable climate and location, i.e.

containment by water, surrounding municipalities, mountains and built environment which can

only grow through densification and towering vertical villages.

The 2016 Census reported that the City has experienced over the past five years a 7.2 percent

increase in its population to 85,792. B.C.’s capital is now home to 49,212 private dwellings, an

increase of 6,252 from 2011 to 2016. Victoria is the seventh most densely populated city in

Canada with 4,405.8 residents per square kilometer.

The Statistics Canada 2011 National Household Survey revealed differences in the pattern of

housing tenure between the Capital Regional District (where 66 percent of its total number of

private dwellings were owner occupied), versus only 41 percent for the City of Victoria. Five


years ago, the City had the highest proportion of renter-occupied dwellings – 59 percent, within

the entire region. Today, the City estimates that approximately 27,000 private dwelling units

are rentals (or 53 percent of the total housing stock in Victoria).

In addition to successive decades of inadequate investment in rental housing, increased

demolition of older apartments, and vacancy rates near zero, tenants over the past five years

have also experienced a minimum 18 percent increase shelter costs even under rent controls.

Their rent increases exceeded the B.C. weekly wage increases of 11.8 percent from 2011 to

2016; while many on fixed-incomes could not keep up to the soaring shelter costs.

Tenants have also been negatively impacted by the growing commodification of housing and

speculative real estate investment fuelling B.C.’s economy. The province is now dependent on

property tax revenue accounting for more than 40 percent of B.C.’s GDP which came from the

real estate sector in 2015 and 2016, dwarfing the 7 percent revenue generated by the resource

sector. The amount of foreign investment in BC real estate purchases in 2015 was equivalent to

the value of the entire residential construction industry in Vancouver according to Bill Tieleman

(billtieleman.blogspot.ca, July 12, 2016).

BC has more than 2 million properties on the assessment rolls worth $1.67 trillion, of which

360,000 properties are on Vancouver Island valued at $193.2 billion up $20 billion over last

year. Three billion dollars of the region’s updated assessments are due to new construction.

(Home values take a big jump in the capital region, Times Colonist, January 3, 2017).

According to the 2016 Census, there were now more than 3,450 unoccupied private dwellings

in the City of Victoria, which represents 7.9 percent of all dwellings. These units may have

been identified during the Census as “unoccupied” or “not occupied by usual residents,” but

the data do not reveal how many units were vacant (awaiting sale or purposely left empty as a

real estate investment), derelict (unoccupied due to the condition of premises), or ‘under-

utilized’ (perhaps furnished and operating as seasonal or short-term rental properties).

The 2016 Census tracts for one downtown area revealed 953 unoccupied units or

approximately 14.6 percent of the neighbourhood’s total housing stock. Since this area is now

the focus for more than 40 multi-storey condo properties, it is likely that many of these units

are now being purchased by both individuals and corporate interests as part of their residential

investment portfolio or income-generating properties.

This is best reflected in the recent inaugural Real Estate Investment Expo held in Victoria to

promote the City and its residential development projects as a “lifestyle superpower” for


affluent retirees, well-paid high-tech industry contractors or tourists wanting ‘authentic’ local

experiences in “alternative hotel accommodations” afforded by the City’s many desirable and

walkable neighbourhoods.

Here’s the question: Are City politicians, planners, and developers building a mecca of

expensive amenities, attractions, and high-end housing for the well-to-do and tourists while

displacing the majority of Victoria’s full-time, long-term, modest to middle-income residents,

particularly renters?

While some 240 properties in the City have been assessed at more than $1.7 million dollars,

Victoria now ranks the third highest in terms of apartment rents in the country. The Statistics

Canada National Housing Survey has revealed that more than 6,000 tenant households spent

in excess of 50 percent of their monthly income on shelter costs, while more than 1,500

individuals have no roof over their heads. (See ‘rent poor’ map of Victoria neighbourhood

2011 census tracts: https://censusmapper.ca/maps/76#14/48.4228/-123.3644)

3. James Bay Housing Characteristics

James Bay, one of the City’s 12 neighbourhoods, has seen a 6.9% increase in its population over

the past five years to 11,988. Not only is it one of the most densely populated areas (6,116

individuals per square kilometer), it is also one of the city’s oldest neighbourhoods. James Bay is

home to the Legislative Precinct, a working harbour with heavy reliance on a seasonal cruise

ship industry, hospitality/tourism sector and diverse retail and business services.

According to Statistics Canada 2011 National Household Survey, 69 percent of private dwellings

in James Bay were renter-occupied, the third highest percentage after the neighbourhoods of

North Park and Downtown, each at more than 70 percent. (See Renter Households map of

Victoria neighbourhood 2011 Census tracts: https://censusmapper.ca/maps/60#14/48.4236/-

123.3662)

James Bay was once considered one of the City’s poorest neighbourhoods prior to its

redevelopment in the 1960s and 1970s. With the aid of Federal government housing subsidies

in the 1960s, the neighbourhood saw the demolition of older single family homes and the

construction of new multi-family high-rise apartments. From the turn of the millennium to

2011, the neighbourhood saw only modest growth (see Table 1 below).

https://censusmapper.ca/maps/76#14/48.4228/-123.3644




Table 1. James Bay – No. of Dwelling Units Over Time % Change

______________________________________________________________________________

2001- 2006 2011

2001 2006 2011 2016 2006 2011 2016

_____________________________________________________________________________________

6,575 6,695 6,695 7,651 2% 0% 14.2

______________________________________________________________________________

Source: Statistics Canada 2001, 1006, 2011 Censuses (City of Victoria) and 2016 Census

However, with the housing and real estate boom over the past five years, James Bay has seen a

14% increase in new residential construction, primarily through infill densification.

Based on BC Assessment and MLS sales data, it is estimated that there are now almost 40 Strata

Title properties in James Bay representing approximately 1,577 condominium units, 25 percent

of which have been built since 2000; the remainder have been converted from rental

apartment and single-family homes.

A growing number of these units appear to have been purchased as investment properties, or

operate as short-term vacation rentals and comprise more than 70 percent of the 123 Airbnb

listings for James Bay in August 2016 (see Insideairbnb.com – Victoria, B.C.) Note: According to

the James Bay Neighbourhood Association’s Community Profile, 500-800 residential dwelling

units are used part-time (the equivalent of 1,000 to 1,600 part-time home-owners).

Table 2 (following page) highlights the various housing types found in James Bay in 2011.

Approximately 79 percent of the more than 6,695 private dwelling units were multi-family

rental units; the lion’s share being five-storey or fewer apartments, predominantly wood-frame

purpose-built units constructed prior to 1970.

As property prices soar, up 20 percent over last year, commercial rental property owners are

assessing their options. Many of these five-storey rental buildings are nearing the end of their

life-cycle and will likely be torn down and replaced by higher-density condo-units, displacing

existing long-term tenants – seniors, working families or students.

Renters are not immune to the soaring land values and higher new construction costs. Tenants

in BC, even under Provincial rent controls, experienced a minimum 18 percent increase in rent

between 2011 and 2016. The Canada Mortgage and Housing Corporation’s Rental Market

Report for Victoria CMA in the Fall of 2016, indicated that tenants in the City of Victoria faced


an average rent increase of 5.9 percent (in spite of rent control limits of 2.9% in 2016, up from

2.1 percent the previous year. And, James Bay tenants incurred the highest rent increases

averaging 7.5 percent in 2016, up 4.3 percent from the previous year.

Table 2. James Bay - A Profile of Housing Types - % of Total Dwelling Units in 2011

______________________________________________________________________________

Total Number of Dwelling Units 6,695

Single Detached House 6.8%

Semi-Detached House (Side-by-Side) 3.0%

Apartments/Duplexes 3.4%

Row Houses 8.5%

Other Single-Attached House 0.3%

Apartments (fewer than 5 storeys) 49.9%

Apartments (five storeys or more) 29.1%

Moveable Dwellings none

______________________________________________________________________________

Source: Statistics Canada Census 2011

According to the Statistics Canada 2011 National Household Survey, 90% of private dwellings

were multi-family dwellings with 10 percent single or duplex residential units. There were 4,645

rented residential units in James Bay, of which 3,334 units were in five-storey or less apartment

buildings. More than 1,900 rental units are in multi-storey apartment complexes which are also

at the end of their life-cycle.

The Central Mortgage and Housing Corporation Rental Market Report – Victoria CMA, October

2016 indicates that James Bay has 3,461 private apartments – a loss of 179 units since

October 2015. James Bay represents 21.2 percent of the City’s total number of apartment units

(16,310). Note that the Victoria lost an overall 158 apartment units between October 2015 and

October 2016. Clearly the City appears to be doing little to preserve the rental housing stock,


and doing everything they can to displace renters in favour of affluent home-owners who can

afford its many newly-minted upscale condos.

Over the past two years, six high-rise apartment properties with more than 600 rental units, are

undergoing or have undergone cosmetic changes and retrofits involving toxic asbestos product

removal, although not seismic upgrades. This has resulted in a growing number of evictions,

‘renovictions’, and displacement of long-term tenants, many of whom cannot return to these

units as the rent hikes are significant and fixed-term leases without the benefit of rental control

are is now becoming the norm.

As far as subsidized housing units are concerned, B.C. Housing confirms that as of 31 March

2016, there were 5,157 such units in the City of Victoria. These included emergency and

transitional shelter, independent social housing, and rental assistance units in the private

market. According to the JBNA Housing profile, James Bay has 11 properties (comprising 253

units), less than five percent of the City’s social housing market.

In terms of public and private Seniors’ care (independent, supported, and long-term care), the

JBNA Community profile indicates that Greater Victoria region has 6,783 units. Approximately

2,122 units are located in Victoria, of which 860 (including Concert’s planned Tapestry Seniors’

residence) are in James Bay, comprising 40.5 percent of this market.

The 2016 Canada Mortgage and Housing Senior’s Housing Report for British Columbia, states

only regional data but indicates a rising demand and declining vacancy rate for Independent

Living Spaces throughout the province. Metro Victoria and the Gulf Islands provide 3,504

independent living units for 3,664 residents. This represents an uptake rate of 10.4 percent of

the estimated population aged 75+ (35,298).

4. Issues

This environmental scan data concerning housing highlights in Victoria points to a growing

income inequality, a limited and declining supply of affordable rentals for local residents

(seniors, students and working families), and a shift in the housing landscape of the City toward

affluent baby-boomer retiree home-owners in upscale properties—located in desirable,

walkable core areas and the nearby neighbourhoods: Cook Street Village, James Bay, and

VicWest.


The fact of the matter is that renters often remain invisible in policy discussions and popular

commentary about the economy. They are however key contributors to the social and

economic fabric of city life, especially to maintaining its vibrant neighbourhoods.

Growing demolition and replacement of pre-1970 construction apartment complexes with

medium and multi-storey higher-density, small condo units, begs the question: Where will

current renters move in a low-vacancy unaffordable rental marketplace?

If the City encourages home-owners to explore rental accommodation in secondary and garden

suites, where will renters find accommodation if it is more profitable to offer lodging to a

tourist on a short-term/seasonal basis rather than a long-term lease for a local tenant?

Where can tenants move on a temporary basis if their landlords renovate their premises and

insist on hefty rent increases and/or fixed-term leases which permit them to increase rents at

the end of each term or oblige the tenant to move out?

Does the Mayor’s vision of a “lifestyle superpower” and the City’s Official Community Plan to

accommodate an additional 20,000 people to Victoria over the next three decades mean the

vast majority of moderate income individuals and families will be excluded? Will access to the

City and its exclusive enclaves with multi-million dollar amenities be limited to only the most

privileged people in society – well-heeled tourists or seasonal homeowners?

4.1 Data Gaps

There exists no central registry operated by the City or by any non-profit housing group that

records and monitors the number of full-time renters being displaced or evicted by the owner

as a result of: 1) a sale of a commercial rental property, 2) demolition of an existing rental

property, 3) renovation of a rental complex or 4) conversion of a long-term rental unit to a

more lucrative short-term vacation rental property. No data captured to determine where

these long-term renters move, e.g. couch-surf with a friend or family member, or move out of

the city, and if so where?

There exists no housing inventory for the City of Victoria. Canada Mortgage & Housing Rental

Market Report for Victoria CMA – October 2016 identifies the total number of condo units

constructed (12,553), the number and proportion rented (3,195 – 25.5%), the vacancy rate

(0.7%), and average rent for a condo in Victoria ($1,419) on a year-to-year basis; but there is no

break-down by neighbourhood. Most of the data is aggregated for either the City or the Census

Metropolitan Area. Likewise, there is only limited aggregated data for other secondary rented


units by dwelling types and average rents (e.g. single detached, semi-detached, row and duplex,

other primarily accessory suites) and the estimated number of households living in these rental

units.

Given that Victoria is amending its regulations and zoning bylaws to accommodate short-term

vacation rentals downtown, legalizing secondary suites for rental purposes, and encouraging

construction of new garden suites in neighbourhoods, this missing information is critical to

assess the housing supply available for long-term rental use versus short-term vacation rentals

for tourists.

No data or GIS information is available re the distribution of housing by dwelling type and age

of construction, neither is there BC Assessment and Property Tax information by

neighbourhood, distribution of residential properties by assessed value, and total taxes paid; or

information on those who pay deferred taxes, and taxpayer infrastructure investments in the

neighbourhoods.

Likewise there exists no mapping data available for potential high risk residential

neighbourhoods and properties related to 1) identified contaminated sites; 2) seismic

risk/soil/water table issues 3) utility – electrical, natural gas risk – gas/sewer/waterlines/fires in

event of earthquake, tsunami as well as emergency plan.

4.2 Vacant or Unoccupied Private Dwellings

The 2016 Census identifies a high proportion of unoccupied dwelling units both in the

downtown area (14.6% comparable to the already identified problem in Vancouver’s

downtown desirable areas such as the West End, Coal Harbour, Kitsilano etc.) But James Bay

has the second highest proportion of vacant units—641 (equivalent to 8.3 percent of the

neighbourhood’s total housing stock); and these units comprise 18.5% of the City’s 3,450

unoccupied dwellings.

This suggests that speculative real estate investment definitely contributes to elevated land

prices, soaring rents, and shortages of living accommodation for long-term renters who often

have to compete with tourists for accommodation.

The revelation that the City now has thousands of unoccupied dwellings, when renters face a

vacancy rate of below .05 percent lack of available and affordable rental units, suggests there is

a serious problem. In the absence of any data from development and demolition permits,


business licenses etc., we do not know how many properties are derelict, unused, under-

utilized and/or held for investment or short-term revenue-use.

The fact that recently, over a period of only 10 days, more than 1,121 individuals signed a

citizen-initiated petition presented to City Council to oppose unregulated, unlicensed, and

untaxed short-term vacation rentals in all neighbourhoods; to support licensed bed-and-

breakfasts, existing hotel operators, mixed housing/ tenure options and housing for all

residents of Victoria, is a huge accomplishment: the first of many steps to ensure that the

voices of Victoria’s renters are heard re the affairs of this City.

What’s To Be Done?

The housing crisis has no easy, one-size-fits-all solutions. This does not mean however that we

should overlook the major factors contributing to the crisis, as Guy Dauncey points out in his

paper, Canada’s Housing Crisis: Twenty-Two Solutions.

1. The failure of all levels of government to address the growing crisis of impoverishment and

income equality.

2. The failure of all levels of government to investment in affordable housing for everyone,

rather than defer to private property developers and the profit-driven market.

3. The trend towards commodifcation of housing, allowing affluent individuals and real estate

investment funds to treat housing as a money-making financial vehicle.

4. For the past four decades, particularly since the Great Recession of 2008, there has been a

faster increase in the supply of money afforded by financial institutions than the growth in

the economy needed to absorb it; this is fuelling inflation and the monetization of non-

productive commodities such as housing.

5. The choice of Canadians with higher disposable incomes to invest in housing, particularly in

desirable urban centers, thereby inflating the prices.

6. The ability of wealthy non-Canadians to purchase property in Canada with few restrictions,

further inflating housing prices.

7. The unwillingness of governments to eliminate tax evasion loopholes, or to regulate against

the purchase of land as a commodity in order for ownwers to evade payment of taxes.


8. The inability of affordable housing advocates to mobilize those who are suffering from the

negative impacts of the housing crisis (e.g. demovictions, renovictions, displacement by

gentrification or tourism rentals, as well as soaring rents), and to assist them in organizing

into a visible and verbal political force.

Who says nothing can be done? Only those who have a hand in preserving the status quo,

would tell those suffering the consequences of the housing crisis, that they’re doing their best –

while using the public purse to serve the self-interest of the powers that be.

Why not discuss some options to tackle the housing crisis? Why not put our heads together and

find ways to resolve the situation in a just and equitable fashion? Perhaps as Daphne Bramham

suggests, the ’Third housing sector’ would make Vancouver more affordable for middle class

(Vancouver Sun, March 19, 2017).

Consider housing models of other jurisdictions e.g. Madrid, Rotterdam, Nordic countries

and elsewhere; develop a realistic and comprehensive housing strategy

Restrict foreign ownership of property; close the financial regulation loopholes that permit

tax havens

Establish meaningful rental housing price controls; close loopholes in B.C.’s Residential

Tenancy Act

Use municipal powers related to zoning and bylaws that do not favor home-owner investors

over long-term tenants, working families, and students; place a limited ban on short-term

vacation rentals in all neighbourhoods; like Whistler

Explore innovative options for new affordable housing for all Canadians, adopting a

“Housing First” approach; housing cooperatives; land trusts, passive (renewable energy)

homes; student housing; First Nations housing; social shared-homes, and affordable

housing collectives/villages

Explore a variety of financial tools to increase the housing supply and curb real estate

speculation: zero-interest capital loans, an affordable housing tax levy, a municipal levy on

vacant residential properties or second homes; a municipal levy on properties purchased by

non-residents; increasing the Property Transfer Tax on high-value properties; consider


introducing a Housing Speculation Tax or a Property Investment Tax on individuals who

avoid paying Capital Gains Tax.

Consider a variety of tax reforms to address the deeper problem of growing income equality

by escalating a federal inheritance tax on properties valued at more than two million

dollars; providing a living wage or increasing the minimum wage to $15 per hour; regulating

the growing gig economy and a contingency workforce without benefits or a livable income;

ending staggering student debt, supporting affordable daycare and public transportation.

Those who are concerned about how to address the housing crisis, what options they have as

independent citizens, where to find assistance and support to move forward, please consider:

Write to the Mayor, Council Liaison, MLA, or MP to express the need for a national housing

policy; tax reforms and incentives that protect the rights of renters to secure housing

tenure, appropriate relocation notice and support in the event of displacement.

Volunteer to undertake research, writing, social media, polling, surveys in support of renter

needs and to resolve their critical issues.

Participate in Local Area Planning initiatives to preserve critical social services, public

transportation, housing etc. in the neighbourhood.

Engage in petitions, round tables, forums as well as grass-roots initiatives to address

concerns of renters – health and safety matters re renovations; rental property issues, and

other joint-initiatives. Host a Housing Speakers Signature Event or colloquium to discuss –

innovative and provocative ideas in urban planning or citizen-inspired journalism.

Contribute information and talents to James Bay New Horizons Ad Hoc Housing Advisory

Committee; to the Mile Zero Matters monthly Conversation Cafes.

Work together in a broadly-based Affordable Housing Alliance to seek workable housing

solutions for seniors, working families, and students, indigenous people, and those who are

vulnerable and need special support.

If not now, when? Housing is a right, not a privilege. Housing is for shelter, not just an

investment tool. Housing matters to everyone. All for one, and one for all. No action is too

small!


View of James Bay from Ogden Point Breakwater, V. Adams, 2016

For further information on housing issues, activities, programs, and volunteer opportunities to

work with the JBNH Ad-Hoc Housing Committee, please contact:

Victoria Adams, Housing Advocate

James Bay New Horizons Society

234 Menzies Street

Victoria, B.C.

V8V 2G7

Telephone: 250.386.3035

Email: [email protected]

Web: www.jamesbaynewhorizons.ca

Twitter: @JBNewHorizons

mailto:[email protected]

http://www.jamesbaynewhorizons.ca/

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