A residential housing neighborhood in West Vancouver on Oct. 10.CHRIS HELGREN/Reuters
When Vancouver was planning its Olympic Village on the southeast shore of False Creek in the mid-2000s, the city council of the day had lofty ambitions. Local politicians wanted to build a mix of housing that would seem almost European in the way it catered to renters of different income levels.
Under the initial proposal, one-third of the new neighbourhood’s apartments would have been reserved for people who could pay only the lowest of rents. Another third would have been priced to suit people making minimum wage or slightly more, who would have paid rent geared to their incomes. And the rest of the village would have been for those who could afford to pay the city’s market-rate rents.
That dream ended when a new, more conservative council was elected in 2005. Everything was scaled back over concerns that the city couldn’t afford the huge subsidies that would have been required, especially as costs rose and the 2008 recession set in. Most of the village was sold as condos. A couple of social-housing buildings and one co-op were all that survived of the original vision.
Since then, only the most stubborn local housing activists have clung to the idea that Vancouver could ever achieve the same kind of affordable-housing successes as some European cities, where developers must ensure that as much as two-thirds of the apartments in new housing development projects rent below peak market rates.
But it doesn’t have to be that way, according to Maria Vassilakou, the former deputy mayor of Vienna, a city notable for its work creating buildings and neighbourhoods where low-income residents co-exist with wealthier neighbours. And while Vienna has been leading the way in housing affordability for decades, other cities, such as Hamburg in Germany, have demonstrated in recent years how much progress a concentrated effort can produce in a relatively short time.
“What we are doing is transferable. I think all of it is transferable,” Ms. Vassilakou said.
There are many reasons affordable housing continues to be in short supply in Vancouver. One of them is that the housing development process pits all the parties involved against one another.
Each new development requires a new round of talks. Private developers barter for extra height on their buildings in exchange for reserving a negotiated number of apartments to be rented at lower-than-market rates.
The city, meanwhile, is constantly trying to pry money out of the provincial and federal governments for social housing. The same holds true in most other Canadian cities. The battle to build even a tiny bit of housing that is not subject to unregulated price increases is continual.
Ms. Vassilakou, who was in Vancouver recently to speak with local housing advocates, told The Globe and Mail her city is not immune to the real-estate madness that has gripped Canada and the United States in the past decade. The difference, she said, is that some European politicians have used their negotiating leverage and authority over public land more deliberately and effectively than their North American counterparts.
Vienna’s model can’t be transplanted wholesale to other countries, she added, but that doesn’t mean Canada can’t implement it. “What is transferable is a collaborative effort with non-profits, and with federal agencies that also own land,” she said.
In 2019, Vienna introduced a new housing requirement for any project with more than 150 units: two-thirds had to be affordable, with a mix of rents subsidized at different prescribed levels, similar to the way Vancouver’s Olympic Village was initially supposed to be.
“That, of course, was a radical step,” Ms. Vassilakou acknowledged.
In Vancouver, the proportion of affordable housing units the city requires in large new developments is just 20 per cent.
There are other mechanisms Vienna has been using for longer periods of time. The city aggressively buys land, then rezones it for high-density real-estate development, sells part for a profit and uses that money for housing. And the local government already owns a lot of developable land – decommissioned hospitals, abandoned airfields – that can also be upzoned and sold.
That puts it in a better position than Vancouver, where large chunks of land are owned by the federal or provincial governments, both of which are reluctant to sell.
Another thing working in favour of affordable housing in Vienna is that the city is effectively its own province, meaning it gets a portion of all the taxes collected by the Austrian national government. Vienna has to pay for a much wider array of services than Canadian cities do – everything from welfare to health care. But the transfer payments give it money to work with.
The city of Hamburg, in northern Germany – the country’s second-largest after Berlin – has also changed its housing dynamics through sheer force of political will.
Hamburg’s housing policy is the political legacy of the man who is now Germany’s chancellor, Olaf Scholz. In the city-state’s mayoral election in 2011, he ran on a promise to tackle the local housing crisis, and won. Once in office, he set up the Alliance for Housing, a partnership between the city government and housing industry associations. The arrangement has been renewed in every legislative period since.
Under the current agreement, the city, with a population of about 1.8 million, sets a goal of 10,000 approved new housing units a year. (The goal isn’t always met. This year, the city is falling short because of high construction costs.) The aim is for 3,000 of those units to be subsidized for lower-income renters.
The alliance is founded on a contract between the city of Hamburg and its seven districts. Those mini-municipalities receive €350 for each unit approved, a direct incentive for green-lighting development.
In 2011, the year the alliance started, 6,811 housing units were approved in the city. Ten years later, that number had increased to 10,207.
Jan Grade, managing director of the German research and consulting firm Empirica Regio, said rents in Hamburg have remained relatively stable over the past 10 years, even as prices elsewhere in the country have risen sharply.
Empirica data show that rents in Hamburg have increased by an average of 2.3 per cent annually since 2011, compared to an average of 3.7 per cent across Germany’s seven largest cities.
That has happened even though Hamburg has seen an influx of immigrants since 2015.
The successes of Hamburg and Vienna rely on the willingness of local politicians to work together with the private development industry, and to insist on a housing system that doesn’t focus only on the poorest of possible tenants.
“It’s important that social housing should not target only low-income groups,” Ms. Vassilakou said. “It should target the middle class, which is the backbone of society.”
Things are not perfect in either city. Construction and energy costs have skyrocketed because of the war in Ukraine and pandemic-related supply-chain issues. Interest rates are rising, and manpower is in short supply, as is land.
Implementing similar models in Canada would require overcoming not only global economic challenges, but also all the obstacles that are particular to this country.
“It is worthwhile to build on the model, but it must be adapted to current and, above all, local and regional conditions,” Empirica’s Ms. Grade said.
Ms. Vassilakou agreed. “You can never transplant a model from one city to another directly, but you can interpret and adapt the parts that can be useful,” she said.
The hardest thing to transfer to Canada, she added, might be Europe’s long culture of supporting social housing. It’s politically accepted in Europe that the state will intervene to make sure that people at all income levels can find housing.
That idea is still up for debate in Canada and the U.S., where residents fondly remember how the private market satisfied most of the huge postwar boom in demand for housing. That unprecedented building spree has been unmatched since then.
“There’s two things politicians tend to fear most,” Ms. Vassilakou said. “One is public opinion and one is taking risk. They’re very risk-averse and, every year, it gets more and more.”