Only Vision could get away with giving developers a $22 million tax break

smoke-filled room
Mayor Robertson holds roundtable meeting with local developers to map out a tax break scheme

A report came to Vancouver Council yesterday that proposed giving the city’s big developers a $22 million tax break. With the exception of NPA Councillor Suzanne Anton and COPE Councillor Ellen Woodsworth, the tax break was unanimously supported by the Vision-dominated City Hall.

This move by Vision to give tax breaks of up to $9000 per unit constructed would have never passed the sniff test under an NPA government. That’s because Vision would have immediately called a media conference and demanded the Mayor halt this "gift" to his big campaign donors. Oh how the tables have turned.

It’s public knowledge the development industry are some of Vision Vancouver’s largest donors. They simply couldn’t run an effective civic campaign without all of their hefty contributions. Now that Vision’s in government, it’s amazing to see how they can slip in this massive tax gift with a straight face.

They are calling the tax gift program STIR, a cutesy name which stands for Short-Term Incentive for Rental program. Vision argues that by giving big tax breaks to the city’s developers it will help to spur on construction, thus creating new jobs.

The problem is this report came in at the last minute (yet again), and was not the result of broad community consultation. For heaven’s sake, besides a handful of developer and architect types who were hand-chosen to participate in a roundtable discussion with Mayor Robertson, the public has been kept in the dark until this week.

Vancouver taxpayers are now going to see a shortfall of $20 million dollars that could have been used to build pocket parks, greenways, community centres etc… Once again, public amenities will take the hit. All the while, there is no clear evidence that this type of tax break is going to create a single additional unit of affordable rental housing in Vancouver.

It’s worth noting that Vancouver already has 48% of the rental housing stock in the Metro Vancouver region. However, it doesn’t represent 48% of the population. In other words, as a percentage, Vancouver is already punching above its weight when it comes to the development of rental housing. However, if you listened to the rhetoric of the Vision councillors, you’d think Vancouver were trailing other municipalities…something that is simply not true.

There is a clear pattern emerging under Robertson’s leadership. Act now, consult later. He did it with his HEAT shelters. He did it again with Gregor’s Garden. And now he’s doing it with his STIR program.

This is in addition to the disturbing amount of in-camera meetings he’s been holding as well as an increased number of "late distribution" reports which allow the public little time to review major policy initiatives before they become law.

Robertson is displaying a real father-knows-best attitude. It’s something that’s likely been hard-wired into his political DNA and that of his Vision/COPE colleagues. You know what I’m referring to. A sense or moral superiority that can supersede the legitimate concerns or questions common folk like you and I might have about any particular issue.

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  • Michael Phillips

    Nowhere in your post do you mention that the tax-break is only for developments with a certain rental component. This isn’t a free-for-all, it’s genuine rental stimulation, and the idea that cutting fees on rental developments isn’t going to create more of them is ridiculous.
    I too have a couple questions about this plan, and I think you’re right that a major ongoing issue is that this is at the expense of tax funding which could be going to other things.
    One concern I have is that I don’t see why developers would build more than 8 rental units per building as required by the “simple stream” of the plan when at that point they guarantee their fee waiver. Why build more? A per-unit plan would seem more tailored to our needs. Also, 8 units, for major developments, isn’t a very big number.
    For smaller units it would be but then the question is why would a developer building a 3-story building have half the units be rental for the next 60 years just to save on some fees. Some who are on the margin of building rental vs. ownership would, but not alot.
    In 50 years even the person who built the building’s grandkid wouldn’t be able to sell the units and all the kid would have to console themselves with is that once 50 years ago his grandpa didn’t have to pay some development fees. In other words I’m not sure who would take the bait, not to mention that including rentals in your building depreciates not only that unit’s value but also surrounding units for some rather sociologically unfair but none the less economically effectual reasons.
    The report mentions something like this in a rather odd way…
    “While the precise benefit of reassessment will vary on a case by case basis, BC Assessment Authority estimates that there could be a 10 to 20 percent reduction in the assessed value of properties secured by the City as rental housing …The reduction in assessed values will result in savings in both municipal general purpose tax levies and taxes levied by other taxing authorities.”
    Finally, this system doesn’t exist in rate-of-change zones which are to some extent rental protected and are thus the areas where the building of new rental housing is often most in need.
    It’s definitely a rental stimulus plan which is what we need, and I do support this, but it could be greatly improved. I’m not sure it will be either as expensive as suggested nor as profound a change as suggested.

  • Sean Bickerton

    I am truly shocked. After an impassioned and sometimes nasty election campaign, it now appears that Vision’s main beef with the NPA was not that the council was too friendly with developers, but that the NPA wasn’t close enough!
    In just six months we’ve seen Vision’s relationship with developers progress from just being friends to friends with benefits!
    Back-room, closed door meetings by invitation only …
    Tens of thousands of dollars in donations, not all of them declared to the public …
    More in-camera sessions than ever before …
    Unfriendly project managers eased out …
    Less public consultation …
    More politicization …
    Is this really worthy of the promises made just seven months ago?
    In order to rescue Vision’s legacy, it’s time for Mayor Robertson to start governing for the entire city, now, not just as a partisan acting on behalf of his backers.
    I find this giveaway all the more notable because one of this council’s first acts was to cut arts funding 8%, after repeated promises to increase funding during an election in which everyone agreed the arts are a vital economic engine in this city.
    I’m all for more affordable housing – affordability should be the city’s number one priority. But it does leave one to rightfully ask: “Is Vision taking money out of the mouths of starving artists in order to fill up the piggy banks of the developers who just happen to be one of their largest sources of donations?”

  • michael trivisano

    i have a story to tell that illustrates why people distrust all levels of government. First some background: my family owns a two story rental building in hastings-sunrise area the 2009 tax assessment shows an increase of 25% from the 2008 level . This strikes me as out of line-what has changed in one year ? When i inquired as the reason for this i was told that the assessments for area where inflated by London Drugs inc. buying up many properties in the area with the plan to redevelop the entire block and add a shopping center. This is not fair and besides the redevelopment plan is on hold. what really irks us that a newsletter that came with the tax notice brags about how city staff have worked hard to minimize tax increases- these are their numbers-net tax increase for residential property owners is 7.89% and GET THIS 3.89% for non-residential properties -3.89% , well we must really be unlucky to get stiffed with a one year 25% increase. What most politicians do not understand is while they can play “games” with finances the general public can and will continue to practice “creative” accounting , yours truly michael trivisano