Affordable housing for everyone

By Rob Wipond, March 2013

There’s growing local interest in land trusts as a way to tackle housing costs and reshape our communities.

 

"It’s not a housing strategy, it’s about land reform,” said Michael Lewis. The declaration felt rousing, as if we were in an impoverished part of Latin America rather than a comfortable University of Victoria meeting room. Lewis was leading a discussion with representatives from Vancity, Victoria and Esquimalt municipal governments, the Capital Regional District, the Co-operative Housing Federation of BC, and local non-profits and other groups searching for solutions to this region’s housing affordability crisis. And though no decisions were reached, there was general agreement that Lewis’ research report (funded by Vancity) and innovative proposal to build a regional Community Land Trust (CLT) to support multi-owner homes merited further discussions.

There are good reasons to pay attention to the perspectives of Vancouver’s Michael Lewis. Since the 80s, Lewis has been one of the most prominent researchers, consultants, and activists in Canada in Community Economic Development (CED)—economic development which also aims for environmental sustainability and social justice benefits. He’s consulted for credit unions and governments, and helped the Nisga’a form a tribal development corporation and the Nuu-Chah-Nulth forge a forestry strategy. A prolific author, he’s launching his latest book, The Resilience Imperative: Cooperative Transitions to a Steady-State Economy, at a talk on March 11 hosted by UVic’s Centre for Co-operative and Community Based Economy. It’s a theoretical and practical guide for re-localizing and re-democratizing our economies and reshaping every aspect of our communities to survive climate change, resource depletion, and global financial volatility. (Not coincidentally Lewis’ organization, the Canadian Centre for Community Renewal, has been instrumental in nurturing Canada’s Transition Town movement.)

That partly explains why Lewis’ perspectives were garnering interest. Additionally, of course, many local leaders are just generally keen to consider any new ideas for taking action on housing. With both our federal and provincial governments steadily cutting support for non-market housing even as aging buildings, economic woes, and other government cutbacks are increasing the needs, we know the problems are only worsening. The squeeze is being felt hardest at the local levels, so that’s where the desire for solutions is strongest—but where will the money come from?

For example, the municipality of Esquimalt owns two acres near downtown Esquimalt, and municipal Director of Development Services Bill Brown would like a healthy dose of non-market housing there. “We’d like to see the site developed with mixed-use, commercial and residential buildings, using state-of-the-art green technology,” says Brown. However, the municipality can’t afford to do it, so that’s why Brown was at the meeting about CLTs. “We’re looking for a partnership where we provide the land and location and the partner provides financing and development wherewithal. Part of my job is to go out and find options.”

Victoria Councillor Ben Isitt, also at the meeting, is all-too-familiar with such challenges—Isitt recently joined the Capital Region Housing Corporation board and has long been involved with the late-Paul Phillips’ legacy, the three-house Spring Ridge-Fernwood Community Housing Land Trust.

“It was very exciting,” says Isitt of the UVic meeting. Isitt feels we need a variety of different housing solutions in play, but he’s intrigued by Lewis’ proposed regional CLT, especially by possibilities of potentially using such a CLT to leverage the collective housing equity of smaller local non-profits, trusts and co-ops, and to inject capital into renovations of publicly-owned buildings. Isitt suggests the municipality might play a “facilitating role” in bringing stakeholders together to help continue discussions. “It’s an idea that’s still incubating, so I think this support that Michael [Lewis] and the others are providing is really useful,” says Isitt.

A CLT is a community-based non-profit, usually with a multi-stakeholder board representing local financial, public, development, and tenant-owner sectors, that acquires and holds land for non-market housing. While this region already has various types of subsidized housing and trusts operating, most provide only rental units. The relatively new model that Lewis was promoting aims to help get low and middle-income earners into home ownership. The land is owned by the CLT, while the building or buildings are sold to a homeowner or tenant co-operative. Tenants pay in no more than 35 percent of their income and, when they move out, they must sell the house, or the share of the building(s) they’ve paid for, back to the CLT at an agreed price. So tenants can build some equity to finance renovations or expansions, or to eventually enter the private home market, but the CLT’s land stays out of the market and its buildings remain at below-market prices. 

According to Lewis’ research, CLTs have been succeeding in the US for 25 years, and survived the real estate collapse in stellar fashion: 15-30 percent of subprime or prime housing loans in the US are in delinquency or foreclosure right now, but less than one percent of loans to CLTs are. And over time, the CLT homes are becoming more affordable to more people, not vice versa.

Victoria sustainability consultant James Pratt welcomes the “groundswell of interest” in such land trusts locally. He was also at the UVic meeting, and feels an urgency to forge ahead quickly with broader goals than just lowering costs. “I think we’re all driving towards a brick wall at 120 kilometres an hour, and we have to find a way of living on the planet sustainably,” says Pratt. “So [our group is] exploring the possibility of a land trust for the capital region that would have a green, sustainable-living focus.” 

Pratt, a widely respected, long-time local activist-facilitator, has in recent months been connecting people, relevant experts, and organizations interested in helping create a green land trust, as well as those interested in living in housing supported by such a trust. Another motivation for these efforts, says Pratt, is to create opportunities to break down class, age, nuclear family and other silos to create more diverse, supportive, communal mini-villages. “I want to see the possibility for my children and grandchildren to live in my community, the community they grew up in, and be able to afford to live here, and ideally to have a community setting where they’ll have an easier go of it than I did.”

Pratt’s group is organizing a series of educational talks on these topics (james@prattconsulting.ca for more info) and can provide charitable receipts through its partner organizations. “If people have land, a home, or significant financial donations towards this vision, they could contact me,” Pratt says. Another group with a similar land trust vision is trying to raise money to purchase 153 acres near Sooke by April 1 (see www.villagefarmblog.wordpress.com).

In an interview after the UVic meeting, it’s clear that Lewis’ interest in CLTs is also based in an urgent desire for society-wide transition towards resilience—and he sees transforming land ownership as key.

Lewis points out that lower housing costs here would reduce worker commuting, create more diverse neighbourhoods, and help small, local employers keep workers. And while developers typically say that making houses more affordable requires building more houses in the private market, Lewis argues that’s misguided. The real reason house prices are climbing beyond the reach of ordinary people, he explains, is because houses are treated by governments, investors, banks, and even homeowners as speculative investments from which they all demand profits at each resale, rather than as simply places to live. 

“We’ve got to deal with how the inequity in the housing market is created over time,” comments Lewis. “It’s almost guaranteed that if you do not have a means by which you can protect the land tenure from being speculated upon or taken over for private gain…you’re going to lose affordability over time. Which is precisely the dynamic that we’ve seen in high-amenity communities like Saltspring, Victoria and Vancouver.” Alongside this process, notes Lewis, the costs of making this expensive housing affordable keep increasing for our governments. 

Lewis provides compelling illustrations of how speculating on homes also constantly siphons off public, collective wealth and centralizes it in fewer, private hands, further increasing social inequities and reducing housing affordability. If he buys a house and ten years later it’s worth 30 percent more, then who or what created that extra wealth and properly “owns” it? “Is it me who’s created this other value?” asks Lewis. “What’s the role of the public sector? What’s the role of other businesses? What’s the role of just the population itself, who lives there? That’s all part of creating this ambience; the public sector has created the framework, the infrastructure, roads and so on.” He describes London, England’s municipal government investing 3.5 billion pounds into a subway extension in the 1990s. Land values within a kilometre of the subway nearly quadrupled, increasing by over 10 billion pounds (about $15 billion). Yet most of those profitable increases in value went to private landowners, many of them offshore investment firms, who’d done little more than wait for this gigantic public subsidy to roll in. “So think about that,” comments Lewis. “Why should an individual or a corporation be able to scoop the uplift in market value, when it’s the community and the taxpayer that creates the benefit?” 

The same thing has happened near Vancouver’s Skytrain, Lewis points out, and could happen if an LRT is built here. “We’re having a hard time funding public transit expansion, and yet we’re privatizing all the benefits.” If those land value increases were instead effectively “owned” or heavily taxed by the community, some of those profits could finance land purchases for CLTs; alternatively, if all the land had been in a CLT to begin with, we’d all get the public transit benefits without the corresponding negative impacts on land costs and housing affordability.

Unfortunately, Lewis adds, the political, legal and psychological processes that brought us to where we’re at now are deeply entrenched. “Going back 500 years, the process of enclosure, that is, the claiming of the commons by private interests and the aristocracy, is a historical fact. There’s been many aspects to it, and land is a key one.” 

Today, most urban areas like ours have very little public land left for housing. And when we “connect the dots” at broader scales, says Lewis, we see that whether we’re discussing housing, food security, renewable energy or many other aspects of our society which have to be transitioned to lower-impact, lower-carbon processes, the underlying challenge is the same: “They all take land.” 

Yet the ideology that “private everything” somehow will lead to collective good is still embedded in our psyches and culture, says Lewis, even as we witness economic disparities and environmental exploitation worsening daily. “In a nutshell we’re at a real, real significant conjuncture in human history,” says Lewis. “The biosphere itself and everything that depends on it is being compromised so severely in the name of an ideology that’s out of touch with reality.”

If we hope to make our communities more resilient, Lewis concludes, we need to forge innovative ways to reclaim the commons for the public good. Community Land Trusts are one place to start. “How [else] are we going to navigate transition, if we’re only seeing the world through this very, very narrow prism, this framework that’s dominated by the ideology of private property and the Holy Trinity of free trade, free markets, and free capital?” asks Lewis. 

 

Michael Lewis’ book launch and talk will be in UVic’s Cadboro Commons building on March 11 at 4 pm. For more info go to www.uvic.ca/research/centres/cccbe or call 250-472-4539.

Rob Wipond would like someone to donate a house with garden to him, too, and he’s decided to stop keeping that private.