The East Village is growing up, fast. But where do low-income residents go?
It’s dusk, or close to it. Trees have blossomed and clouds are sparse. A cyclist coasts by an illuminated brick building, passing a few meandering pedestrians. Neon blue light emanates from the rectangular wooden benches. The only real oddity to suggest that the scene’s actually a billboard-style advertisement is four bold words and an orange-and-white slogan carefully Photoshopped onto the pavement: “The Future is Rising.”
It was an innocuous enough Facebook ad, serving as another addition to the prolific campaign that the Calgary Municipal Land Corporation (CMLC) has run for the past few years to help promote the reputation of the East Village. But while the image attracted more than 2,000 likes on Facebook, it also drew substantial flak in the comments section about the seemingly classist implication of the superimposed motto.
“Yuppie scum. Quit pushing the poor out of THEIR OWN neighbourhoods,” one person wrote. “Only the rich will be able to afford to live there,” wrote another. “But we cater to the rich I guess.” That comment garnered more “likes” than any of the other 180 comments. A third noted that “the city moans about more affordable housing for people but waste the money on putting down new bricks on a pathway and some high rise condos?”
The Facebook commenters, while blunt, hit the conflict head on. Gorgeous condos are coming, and they aren’t cheap. The price tag for a one-bedroom, 515-sq. ft. apartment in the soon-to-be-built FRAM+Slokker building starts in the mid-$200,000s. Add another $100,000 to that for the cheapest spot in the “Fuse” tower. But those exorbitant prices won’t end with the construction of the 400 condos: there currently aren’t any concrete plans to build any more affordable housing in the New Urbanist’s dream area, according to the City of Calgary and CMLC.
Affordable housing, which is defined by the Canadian Mortgage and Housing Corporation (CMHC) as non-market options that ensure renters or owners don’t respectively pay more than 30 or 32 per cent of their gross income on housing, is needed by 18 per cent of city residents. City of Calgary planning documents for the East Village refer to the need to somehow build more, but there aren’t any incentives for, or pressures on, developers to build any smaller, subsidized apartments. At this point, it’s all talk.
Susan Veres, the spokesperson for the CMLC, says that “you will see solutions come to the marketplace over time.” Ald. Druh Farrell, who along with former mayor Dave Bronconnier helped bring the CMLC into being, similarly states that “there may be potential for creative affordable housing.” Both suggest there’s already enough affordable housing in the area, with most current residents living in some form of non-market situation. To Veres and Farrell, the new homeowners will balance out the monoculture of low-income residents.
But 1,000 of the current “residents” sleep nightly at the Drop-In Centre. The Salvation Army’s Centre of Hope also provides emergency and transitional shelter. Most of the rest reside in low-income seniors housing, such as the Murdoch Manor and George C. King Tower. The affordable housing options presently available in the area are designed exclusively for people in or transitioning out of homelessness, and the retired — not exactly a reflection of the wide range of people who need subsidized housing.
Debbie Newman, the executive director for the Drop-In Centre, says that she just doesn’t believe that building more non-market housing is a priority for the CMLC. “The term ‘affordable housing’ has, I think, disappeared from any of the language that is used,” she says. “I think based on the units that are currently selling, it is not affordable housing. If you look at a living wage for a good percentage of people that do live in the city, even paying $1,000 in rent is not affordable for the majority of people.”
FOLLOW THE MONEY
“Blighted.” For the past decade or so, the word has served as the polite way to describe the East Village. Aldermen, developers, journalists and urban planners have tossed it around the same way that one might characterize an uncle as “troubled” or a relationship as “complicated” — it successfully suggested an unfortunate problem while avoiding the particulars, as any effective euphemism should.
It’s no coincidence that such a word is used. Along with other urbanist buzzwords like “revitalization” and “economic development,” the term is a consistent part of the vocabulary for municipal governments attempting to garner provincial funding for infrastructure projects. Specifically, they use a Community Revitalization Levy (CRL), which is modelled on a public financing model based off of the highly controversial Tax Incremental Financing (TIF) system used extensively in the United States.
The CRL works like this: an area is labelled as “blighted” and in need of massive investment in order to build new infrastructure to attract developers. In order to pay back the loan required to build that infrastructure, a CRL zone is declared. A property tax evaluation is taken of the area at that point. For the next 20 to 25 years, the amount by which the tax evaluations increase — which, if everything goes as planned, they inevitably will — goes to pay off the loan.
Both the city and the province give up their share of the property tax calculated between the baseline and future value as part of this scheme, beginning in 2008 and ending two decades later. But here’s the crux of the problem: tax money that would otherwise be going to education, public transit and, yes, affordable housing, will be channelled into the CRL to help pay for hundreds of millions of dollars worth of infrastructure that in the long-term will mostly benefit the area’s well-to-do residents and business owners.
Scott Hennig of the Canadian Taxpayer Federation describes the financing model as “complete bullshit,” noting that it bypasses the traditional and systemized means of acquiring government grants for projects such as the East Village. It’s an idea based upon “faulty economics,” he says, made to seem like free money is being used when in fact it’s being drawn from other sources. If the CRL doesn’t work as planned — if no one moves in — general tax revenue will be used to pay off the remainder.
“If you’re in favour of using schemes to get money out of the province, this is brilliant,” he dryly notes. The most “comical” part of the East Village situation to him is how the CRL map juts out to include The Bow building, meaning that property taxes for the city’s tallest tower will be directed to pay off the loan for an area it’s not even technically part of. The city estimates that an extra $14.3 million a year will be brought in from The Bow. Bev Sandalack of the University of Calgary’s Urban Lab says that the inclusion of The Bow in the CRL zone makes the plan “doable.”
But this kind of gamble will almost certainly reduce the likelihood of new affordable housing being built in the area. According to the 2007 Community Revitalization Plan, between $495 million and $810 million will have been borrowed by the time the CRL has expired in 2028, which is equivalent to one to two years of the city’s transportation budget in 2011: it’s major money. The CMLC — and by extension the city of Calgary — literally can’t afford to mess it up. They need people to buy into expensive properties in the neighbourhood to increase property tax values, and consequently the chance that they’ll pay off the CRL.
THE PRICE OF AFFORDABILITY
It’s already expensive for cities to build non-market housing, as virtually all federal funding was cut in the early ’90s and the CMHC is facing even more budget cuts in the next few years. In addition, there are currently few reasons for developers to build affordable housing in the city. Gail Sokolan, the city’s affordable housing manager, says that the Financial Incentive Pilot Program (FIPP) — a system of small rebates and incentives for developers — will expire within a year.
John Rook, the president and CEO of the Calgary Homeless Foundation (CHF), says, “nothing’s impossible, but developers want to make money. That’s the reason they’re in the business. So there has to be a good profit line for developers. The area redevelopment plan (ARP) talks about a percentage of low-income housing in that area, so if the city can stick to that and keep the pressure on developers through either the TIF or some tax break somewhere, then it’s not impossible. It’s just difficult.”
The ARP does refer to “housing diversity,” going so far as to state objectives such as “promote a mixture of housing forms” and “encourage adaptive re-use of existing building stock for resident units for singles (Single Room Occupancy, or SROs) where appropriate.” But a research paper authored by Kristen Erickson for the Washington University Journal of Law & Policy about low-income housing in TIF zones suggests it’s not quite that simple: plans and solutions need to be defined at the beginning of the process, not during.
Erickson provided a multitude of ideas in her work, such as requiring developers to either build some affordable housing or pay a fee to the municipality if they don’t, ensuring that relocation assistance is given to low-income residents who are displaced, and developing an area in “phases, with the first phase including housing of lower-income residents.” Another popular concept is that of inclusionary zoning, where developers are required to build a certain percentage of smaller, non-market units.
Michael Geller, an architect from Vancouver, worked for the Canadian Mortgage and Housing Corporation during the construction of the mixed-income community of False Creek in the late ’70s. He confirms that the likelihood of affordable housing being built in East Village is slim, considering the financial situation of cities: “[False Creek] was possible because in those days there was a fair amount of federal and provincial subsidy money,” he says. “The federal government has basically ended its social housing programs. It’s been very difficult for the municipalities to do it all on their own.”
The East Village is essentially a clean slate. If there was ever a place in Calgary to experiment with mixed-income housing like the Woodward’s project in Vancouver — a 40-storey tower combining subsidized and market condos — this would be it. Geller points out that another development proposal was approved by Vancouver city council in October, with the condition that 20 per cent of the suites would be handed to the city to use for affordable housing. So it can be done here. But it hasn’t.
Joe Ceci, a former alderman and the government relations manager for social service agency Momentum, notes that other alternatives, such as secondary suites, likely won’t be addressed in the near future due to the upcoming municipal election: “I think it would have been much easier for this council had they done that right off the get-go and taken that hit early on in this term,” he says. “I don’t think you’ll see it now.”
It’s clear that the East Village will become one of the most vibrant, walkable and engaging communities in the city, if not the country; Sandalack of the U of C’s Urban Lab says the current project “makes sense from an urbanistic point of view,” noting its success over past plans (which at one point included building canals). The CMLC has done a great job of preparing for and attracting developers to the previously barren area, but diversity of income levels is a fundamental principle in New Urbanism. At this point, it looks to be forgotten.
Although developers have only just started construction, with the first shovel hitting dirt in September, residents are already feeling the ripples of change. Fred Robertson, who’s lived in the area for over two decades in shelters, hostels and now the Murdoch Manor, still reminisces about the old culture of bikers, blues and beer — now long gone. While acknowledging that the rapid changes have been positive in some ways, he says they’ve also changed his entire lifestyle.
“In one sense, they’ve cleaned up the streets,” Robertson says. “In another sense, they’ve just sort of put it down to a condition where it’s not really noticed anymore. There’s still drug dealers doing drug deals. Not the way they used to.”
Crime rates are way down. But so is the number of late-night venues that Robertson feels welcome in. What current residents need, he says, is a “semi-senior-friendly and low-income-friendly bar” to replace those lost in the flurry of “revitalization.” But that’s not the sort of the plan the CMLC has: according to their website, the area’s businesses will be “fashionable, crafty, adventurous, arty, ethnic and overwhelmed with choice.”
Jean Swanson, the co-ordinator of Vancouver’s Carnegie Community Action Project, says that an influx of upscale stores that sell “spas and T-shirts that cost $100 and dog clothes that local residents can’t shop in” was one of the indicators of gentrification in Vancouver’s Downtown Eastside. While the East Village situation isn’t technically gentrification — Sandalack of the Urban Lab describes it as “rebuilding after 40 years of nothingness” — Swanson says the same thing will likely happen here.
“Condos always have a gentrification impact when they come into a low-income neighbourhood,” she says. “They push up land prices, they push up store rents, they push up hotel rents, they push up apartment rents. The stores start serving higher income people rather than the lower income people.”
That perspective is affirmed by other residents: Ron McGhee, who has lived off and on at the Centre of Hope for a decade, predicts that “the last bastion of downtown Calgary is going to be exclusive,” while the former long-shot mayoral candidate Lawrence Oshanek, who lives in Murdoch Manor, suggests that “the city of Calgary’s planning department finds it inconvenient to have anything in the downtown core that is reflective of lower income.”
It will take many years before such claims are validated or rejected. But for now, one thing is almost certain: despite having an urban tabula rasa to work with and possessing mechanisms to require developers to construct non-market housing, no plans have yet been made. The atmosphere of the East Village is changing quickly. The future is indeed rising, but who’s future will it be in the otherwise stunningly designed neighbourhood?
“I think ultimately the money’s going to talk,” Robertson concludes, staring out of the wide window of the East Village’s Golden Age Club. “It will not be feasible to keep low-income people in the area. They’ll move them somewhere else.”