Back and forth on CACs

So, did you know that community amenity contributions (CACs) are at the root of every housing problem Vancouver faces? Neither did I, until I watched Glen Chernen of the Cedar Party in a civic election debate on housing affordability last week. Perhaps I exaggerate slightly, but Chernen really did seem to work something about CACs into each of his responses, and I gather this was not a one-time occurrence. CACs, in a nutshell, are contributions the city negotiates with developers who seek rezoning. In probably 99% of the cases, the developer is asking  to  build more units than the current zoning allows, i.e. to increase density. And in the vast majority of cases, if granted, that extra density will be achieved through the construction of taller buildings. The amenities requested in return might be green space, public art, affordable housing, or sometimes just the cash to buy these things. There’s been a lot of interesting debate recently about the pros and cons of Vancouver’s CAC system, but suffice to say I don’t think Mr. Chernen’s remarks contributed to it. This was the first time I’d heard him speak and I didn’t find him credible (or informed) at all; I’m stretched to believe that anyone else would. You can view the debate here and decide for yourself.

However, the debate did include some substantive discussion on CACs, which came about one hour in, in response to a question from Vancouver Sun journalist Jeff Lee (a former journalism instructor of mine). Lee said that the money in the city’s CAC reserve fund had increased from $48 million in early 2009 to $128 million in 2013. He asked each of the candidates whether she or he would support spending that money on affordable housing.

Although it provoked responses I was interested in, I think the question was a bit off the mark in that, as I understand it (and I stand to be corrected), a good chunk of the CAC reserve fund is probably already earmarked for spending on affordable housing – that’s one of the various purposes for which the city uses CACs. The other thing is that the money in the CAC reserve that isn’t already designated for affordable housing has been designated for spending on other public goods, such as the ones already mentioned. I’m no authority on how CACs are negotiated and I’m not one to have blind faith in governments, but I am fairly confident that the amount and type of CACs that are negotiated for each project is not random, but instead the product of deliberate decisions, likely (hopefully) based on an assessment of neighbourhood needs. I’d even venture so far as to suggest that there is some means (I’m not saying adequate means) for communities affected by each development to have input into how the associated CACs are used. If that’s the case, it would be poor process and antidemocratic to overturn the existing decisions on how to spend CACs so that all the money could instead be funneled into affordable housing, as dire as the need for that housing is. The only candidate who seemed to agree with the idea was OneCity’s RJ Aquino, whom I otherwise think has worthwhile housing ideas. The others all said no, for somewhat different reasons. Chernen and the Green Party’s Adriane Carr called the current CAC system “broken.”

Even before this debate, I’d been thinking quite a bit about CACs because the topic came up in the class on “great urban thinkers” I’m taking as part of my master’s in urban studies. That discussion led me to wonder if there was a comprehensive list somewhere of all the city projects that had ever been funded partly or wholly through CACs. And if not, it made me think there should be. Doesn’t that make sense? CACs (and the related topics of development, housing and density) are subjects of debate and even controversy. It would be helpful for our local government to provide its residents with a list of public benefits the CAC policy has produced and what was traded to get them. I don’t see this information as supporting one side or the other of the debate, but instead just part of transparent and accountable governing. Unfortunately, a comprehensive list does not seem to exist, at least not in the city’s possession, and I did ask. Granted, such list would be very long indeed, stretching back about 25 years (for a brief history of CAC policy, see this article originally found on the Price Tags blog).

What does exist, however, are three publicly available (though not easily findable) annual reports that provide details on the benefits obtained through CACs in 2010, 2011 and 2012. The city planning department informed me that a 2013 report is in the works, which is good news. While I’m very glad the reports exist, they are provided in pdf format, which makes it onerous to sort and compare information, and they don’t have all the information I would like to see included.

Therefore, to aid analysis, I have compiled the information in those reports into a spreadsheet and posted it here:

https://docs.zoho.com/sheet/published.do?rid=32ek9248ec85b33014b818b229b4f0b138900

Please note:

• The city reports do not include information about before and after floor space ratios.
• The city reports do not include the names of the developments or developers (I plan to add those gradually), only their street addresses.
• The city reports do not include a column for “recipient,” which I have added and aim to fill in as I’m able.
• I created the “type” column and the types with the goal of making it easier to sort by type of benefit.
• I have checked this data for accuracy against the city reports, but use it at your own risk – you may wish to check its accuracy yourself.
• I recommend reading the city reports for context and policy information.

Adding pre-2010 data seems like a worthwhile but daunting project since it would require sifting through city reports on each rezoning. That’s unfortunate, since as former planning director Brent Toderian put it, “Our annual DCL and CAC reporting has made the results of public benefit system much more transparent and understandable for members of the public.”[3] I agree.

I have also compiled an incomplete list of some Vancouver civic leaders and urban thinkers who either support or critique the current CAC system. “For” or “against” in this case doesn’t necessarily mean that any of those listed are unreservedly in support or opposed to all aspects of the current CAC system; it just signifies where I think they best fit.

For

• Geoff Meggs, Vision City Councillor on his own blog responding to professor Penny Gurstein’s op-ed below.
• Brent Toderian, Vancouver’s director of planning (2006-2012), responding on Frances Bula’s blog to what he calls “a campaign to have ordinary people turn against public benefits by suggesting they are contributing to unaffordability.”
• Gordon Price, director of SFU’s City Program and former NPA city councillor, saying “The city shouldn’t give up this wonderful cash machine.” Also see this dialogue between Price and Patrick Condon.
• Peter V. Hall, associate professor of urban studies at SFU, responding to Michael Geller.

Against

• Patrick Condon, urban design program chair, UBC: Vancouver’s spot zoning is corrupting its soul.
• Jak King, former president of the Grandview Woodland Area Council, who calls CACs “the crack cocaine of city finance.”
• Penny Gurstein, UBC SCARP director, arguing that they are an obstacle to ending homelessness.
• Bob Ransford, consultant and former real estate developer, on their effect on housing costs.
• Peter Ladner, former NPA city councillor, on Gordon Price’s blog here.
• Ray Spaxman, former CoV director of planning: Is anyone else concerned?
• Michael Geller, architect and development consultant, on his own blog
• Adrienne Carr, Green Party councillor, saying the “The CAC system is broken” in the recent housing affordability debate (at around 1:10).

In addition to being interested in the debate itself, I’m intrigued by the fact that it doesn’t cleave along neat ideological lines, as my list shows. On the side of those who defend the current CAC system we have both Geoff Meggs and Gordon Price, councillors who have represented opposing parties at city hall. Some (not me) would explain this by saying all politicians are the same. Others would point to their common experience serving on council, which gave them the opportunity to spend the money generated by CACs and shape the projects they fund.

However, we have a former NPA councillor on the anti-CAC side too – Peter Ladner. There are also former city planning directors on both sides. Like the “pro” side, the ideological composition of the “against” side is mixed. It includes development consultants Bob Ransford and Michael Geller, as well as Jak King, who identifies as an anarchist and is a former president of the neighbourhood association that represents the lefty hotbed (at least historically) that is Commercial Drive. Interesting.

After all that, where do I stand on the CAC issue? Do they serve Vancouver’s goals of increasing housing affordability or hinder them? Is Vancouver too reliant on CACs? Should the system change? Good questions, and I seem to be landing in the proverbial mushy middle.

I will say that of all the arguments I read, I am most persuaded by those of UBC professor Patrick Condon (in the list above). As he points out, Vancouver is governed by the Vancouver Charter and therefore exempt of some of the requirements of the Local Government Act that neighbouring communities are subject to.  For example, Vancouver is not required to have an official community plan for the whole city or to regularly update that plan. There is also the fact that there are no legal limits on how much money donors can contribute to civic election campaigns, despite multiple requests to the provincial government from Vancouver and elsewhere to impose limits.

So, we have no citywide plan + no limits on campaign donations + a hot real estate market. Regardless of what’s actually happening, the combination of these factors is ripe for the perception that density is for sale and that the outcomes of rezoning applications have more to do with the amount of money developers fork over in the form of amenities and campaign contributions than with sound policy and citizen input – in other words, for rule by “the growth machine,” as defined by urban theorist Harvey Molotch. As part of the solution, Condon advises that we undertake a citywide comprehensive planning process so that residents, armed with necessary information about projected population increases, can help determine where growth should go in a proactive way, rather than be forced to mobilize and play catch up every time a developer proposes a rezoning. This does sounds like a much more transparent and democratic way to manage growth and it makes a lot of sense to me.

Still, I know that the current system has created significant public benefits in terms of affordable housing, parks, childcare, cultural spaces, and public art (as per my three-year list). Many of the features that Vancouverites are most fond of, including portions of the False Creek seawall, VanCity Theatre and Emery Barnes park, were funded partly or wholly by CACs. Whatever system we have, it’s important that developers not only pay their fair share of the infrastructure their developments require, but also contribute to the amenities that make it possible for them to profitably market Vancouver as a green and livable city. Under former planning director Brent Toderian, the city began tweaking the CAC system to set more of the contribution rates ahead of time rather than through case-by-case negotiations. Perhaps that is enough.

In case anyone is wondering how Vancouver’s CAC system relates to a class on great urban thinkers, it was discussed in the context of the influential “city as a growth machine” theory developed by Harvey Molotch in 1976 (and later, John Logan). The question our professor put to us was along the lines of, “Are CACs and similar density bonusing policies a check on urban growth or is their existence and increasing popularity evidence for the growth machine theory?”

Briefly, Molotch argued that the economic growth and physical form of cities (North American cities in particular) is determined by those who have an economic interest in rising land prices within those civic boundaries, such as local politicians (who want to increase property tax revenue), property owners, and those in the business of serving them, such as real estate developers, agents and lawyers. While this idea might elicit a “Tell me something I don’t know” response from some quarters today, the theory represented a significant break from the approaches to analyzing urban economic development and form that directly preceded it, which Molotch critiqued for “conceiving of place quite apart from a crucial dimension of structure: power and social class hierarchy.”[1] According to Molotch, the desire for growth is the “key operative motivation towards consensus for members of politically mobilized local elites, however split they might be on other issues.” Further, he argues that it is this “growth imperative that is the most important constraint upon available options for local initiative in social and economic reform.”[2]

Well…I don’t see how the growth machine theory accounts for the ideological diversity on either “side” of Vancouver’s CAC debate. However, I do see an argument along the lines of Condon that our current system and the opportunities it creates for so much ad hoc negotiation allows the biggest and best-funded developers to have more influence over the growth and shape of Vancouver than they would if we had a comprehensive citywide plan developed with community involvement. Because having a real plan would (or should) result in fewer spot rezonings. So perhaps the growth machine theory explains, at least in part, why we don’t have that plan. It’s certainly the case that if there were no development applications to exceed current zoning, there would be no CACs filling city coffers and funding public amenities.

In fairness, I should add that the idea that Vancouver lacks of an overall community plan came up at the housing debate and Geoff Meggs disagreed with that premise. I’m not sure on what grounds though. He noted that the 1996 Cityplan is still technically in effect, but it is also so old that I can’t see how it could be considered a current plan. It may be, as Gordon Price seems to think, that Meggs considers the zoning and development bylaw to be the city’s community plan.

It’s also true that CACs can be viewed as a check on growth, since they make growth more expensive. As Meggs put it during the debate, “They’re called extractions by developers for a reason.” Meggs, Toderian and others who support the CAC system as it is argue that it has been designed to recapture for the public a chunk (and a good chunk – 70 to 80%) of the value that developers gain when their property is rezoned. Certainly developers have complained that not only the cost, but also the uncertainty of the CAC negotiation process, deters them from starting projects inside the city proper.

The fact that Vancouver has a crippling shortage of affordable housing also figures in to the controversy over CACs. As my list shows, some very informed people have argued that developers just pass the cost of CACs on to the end users of the land (homebuyers and renters), and that CACs are therefore an obstacle to realizing the city’s goal of increasing housing affordability. Others (also very informed) counter that it doesn’t work like that, because as much as they might like to, developers can’t increase prices beyond what the market will support. However, that also begs contentious questions concerning the composition of Vancouver’s purchasing pool and whether the city is in a housing bubble – questions that are beyond the scope of this already lengthy post.

Given all these factors and the city’s policy push for densification, it’s not surprising that CACs provoke debate, both over underlying principles and their particular applications (the Rize project in Mount Pleasant being one recent example). That just reinforces how important and useful it is for the public to have specific and clear information about the results of the CAC policy, so I do hope the reports keep coming (and are made easier to find). I’d like to see this information put in a spreadsheet and included in the city’s open data catalogue.

[1] Harvey Molotch. “The City as Growth Machine: Toward a Political Economy of Place.” American Journal of Sociology. Vol. 82, No. 2 (Sept. 1976), 309.

[2] Molotch, “Growth Machine,” 310.

[3] Brent Toderian, Speech to the Urban Development Institute. November 28, 2011.