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"LRTs displace all the poor people"?
#1
An unintended consequence of intensification and LRT/subway construction: Mississauga council fears poor people will be pushed away from LRT route 
Quote:Mississauga councillors want to make sure a new $1.3-billion LRT along the city’s spine won’t create an exclusive, high-rent corridor that’s out of reach for residents who need affordable housing options and accessible transit. “LRTs displace all the poor people,” Councillor Carolyn Parrish said at Wednesday’s general committee meeting. She told staff she wants a plan to guarantee that the LRT corridor, with developers lining up to build where property values are sure to skyrocket, won’t squeeze out those who rely on public transit the most. “I want a fulsome report on how we look at the concentration of affordable housing in this strip.”

That this quote comes from Carolyn Parrish aside, perhaps she has a valid point.

I saw this in Toronto with the Sheppard subway. Sheppard Ave E from Yonge St to Don Mills Rd used to be mostly strip malls with some post-war veteran housing and a few rental towers. Now a decade later it's lined, almost wall to wall, with highrise condo towers. Moreover existing housing north of Sheppard, e.g. in Bayview Village has more than doubled in price during that decade. Now you can't buy a detached house there for much less than $1.5M.

The same is happening along our LRT route. What obligation, if any, does city hall have to ensure a mix of housing types and affordabilities ? Should they "encourage" developers to include some more modest, lower cost accommodation options among their grandiose luxury offerings? What are Kitchener and Waterloo doing in this regard? What else should they be doing?
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#2
(11-06-2015, 08:20 AM)ookpik Wrote: That this quote comes from Carolyn Parrish aside...

Haha. That was my thought, too. Pity, I'd forgotten about her.

You asked: "What obligation, if any, does city hall have to ensure a mix of housing types and affordabilities?"

I think it's our shared responsibility to make sure that everyone has opportunities to better their situations. Allowing them to be pressured to areas where they have to face lengthy commutes to access employment doesn't jive with that.

Frankly, I doubt it's much of an issue in a region like ours, but it could be, and we should be proactive. Other cities have led the way by requiring that a certain proportion of new developments be set aside for lower-income housing. That seems to be the best practice in big progressive cities like Vancouver, and I personally think Kitchener and Waterloo should do the same, particularly around the LRT line.

There are so many benefits to having a broad mix of incomes in every neighbourhood, and we should be promoting it.
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#3
I've read a few articles lately claiming that "gentrification" is a term to avoid. Here's one:

http://www.slate.com/articles/news_and_p...eople.html

It seems like it should be a problem but that article above points to some data which suggests it may not be such a problem. I haven't really thought about it. I could see it being possible, however, that before LRT, people just live far away anyway, and now they have more of an opportunity to live somewhere along the LRT line at least, even if it's not in the center. You hear about poor people and 2+ hour commutes, but this area just isn't big enough for that.
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#4
In the Shepphard example you gave, there's greater housing supply in the area now. So even though prices are higher, they would be even higher if the single detached homes and small rental towers remained.

I think some stops along the LRT route will be slow to gentrify for a while - Mill/Courtland, Blockline, and Fairview mall. From what I can tell, there's a fair amount of affordable housing in these areas. Maybe not so much at Mill/Courtland since that area isn't built up much. I'm expecting the Cedar Hill area to gentrify fairly quickly though. As well as the area around the hopsital.

Honestly, I don't expect city or regional governments to do anything practical to prevent it. There may be some motions passed in principle to limit gentrification, but I doubt it will have a real effect. I think Kitchener council would bend over backwards for development of south downtown, affordable housing be damned.
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#5
"Should they "encourage" developers to include some more modest, lower cost accommodation options among their grandiose luxury offerings? "

I always have to laugh at this line of thinking... do you really think it's the granite counter tops and stainless steel appliances that add all the cost? The reality is the 'premium' fit and finish added to most condos likely only adds ~$5k incremental cost per unit (compared to more basic fit and finish) when you factor in the wholesale prices developers have to pay. Here's the reality: Building accommodations for humans to live in is not cheap - the cost of labor, materials, and building things up to today's code - the premium fit and finish is simply to justify the prices required to build the basics of the accommodation in the first place (the structure, heat, electricity, plumbing, windows, drywall, flooring, fixtures, kitchen, appliances, etc... never mind the environmental cleanup that is required half the time in Kitchener!)

So sure - it's unfortunate the the price of housing is going up - but that's not the fault of developers or politicians - that's just a fact of life. A 100 year old home in downtown Kitchener is at least $300k these days - if a landlord were to purchase a house for that price and rent it out the rent would have to be enough to cover the mortgage payment - which is going to be the same amount as a $300k condo. The only 'affordable' housing that exists today are run-down hole in the wall rental units that are not fit for human habitation - the only reason they are 'affordable' is because they are being run by slum lords who don't bother to invest a dime upgrading them (probably because they're hoping for a developer to come a long and buy them out) and guess what: If they invested the money to upgrade the units and bring them up to par with today's standards it would cost so much money that they would have to charge the same rents that these new condo's will be rented for anyways.
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#6
(11-06-2015, 09:01 AM)plam Wrote: It seems like [gentrification] should be a problem

Really, I live in a crime ridden neighbourhood and suddenly crime starts to drop, my house goes up in price and the schools get better. Care to explain where exactly is the problem with that?

To me gentrification is for gloomy types who refuse to take yes for an answer. Gentrifying an area, while not perfect is a clear step forward in urban development, but chicken little types hang on to anything and everything that isn't perfect about it and make it sound like it was a tragedy.
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#7
(11-06-2015, 09:01 AM)plam Wrote: I could see it being possible, however, that before LRT, people just live far away anyway, and now they have more of an opportunity to live somewhere along the LRT line at least, even if it's not in the center. You hear about poor people and 2+ hour commutes, but this area just isn't big enough for that.

My concern is that because an LRT or subway line makes an area more desirable to live in, in large part because of reduced commuting time and/or more convenient commuting (in the Sheppard example if a building has direct access to the subway then one could commute to work downtown, go shopping, to the theatre, etc. without the need to put on a coat), property values rise at faster rates than elsewhere. This in turn drives up rents and drives away those who can't afford the increases, resulting in an increase in commute times for them. And of course because they no longer live in the area, it then becomes "gentrified." But that's just my simple-minded view.

(11-06-2015, 09:25 AM)Andy Wrote: In the Shepphard example you gave, there's greater housing supply in the area now. So even though prices are higher, they would be even higher if the single detached homes and small rental towers remained.

There's greater housing supply to be sure. But most if not all of that new housing is very expensive. In addition the prices of existing houses have gone up at rates that far exceed inflation. Some of this is masked by the real estate "bubble" in Toronto which only makes analysis that much more difficult.

(11-06-2015, 09:59 AM)Owen Wrote: So sure - it's unfortunate the the price of housing is going up - but that's not the fault of developers or politicians - that's just a fact of life...

I'm not suggesting that it is, only that the city and developers might have some obligation to provide lower cost housing for those who would otherwise be driven out. Note I'm asking, not telling. It does seem to me that as a society we have an obligation to help those less fortunate than we are. (I realize that this goes counter to libertarian doctrine. But fortunately that's not quite as popular here as it is to our south.) Most communities do provide subsidized housing of some sort, including in "gentrificatied" areas. Should we (have we) made any commitments of this sort in our current LRT plans?
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#8
(11-06-2015, 11:16 AM)ookpik Wrote:
(11-06-2015, 09:59 AM)Owen Wrote: So sure - it's unfortunate the the price of housing is going up - but that's not the fault of developers or politicians - that's just a fact of life...

I'm not suggesting that it is, only that the city and developers might have some obligation to provide lower cost housing for those who would otherwise be driven out. Note I'm asking, not telling. It does seem to me that as a society we have an obligation to help those less fortunate than we are. (I realize that this goes counter to libertarian doctrine. But fortunately that's not quite as popular here as it is to our south.) Most communities do provide subsidized housing of some sort, including in "gentrificatied" areas. Should we (have we) made any commitments of this sort in our current LRT plans?

I don't disagree with you - My point was that housing is simply expensive (whether you make the finishes 'luxury' or not.) If we want to help out members of society who need help affording it then some sort of subsidy or tax credit would probably be the most (only) effective way to do it - there's no magical way to build accommodation at dramatically lower prices because the lion's share of the cost is the basics (not the "luxury" finishing).
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#9
(11-06-2015, 11:44 AM)Owen Wrote: ...there's no magical way to build accommodation at dramatically lower prices because the lion's share of the cost is the basics (not the "luxury" finishing).

There is a somewhat magical way that works quite well next to higher-order transit: build much less parking. The least expensive condos being built in the Region right now are in the university district, where they're being built with 0.25 parking spaces per 1 bedroom + den unit.

If we want housing affordability, we need to ensure enough new housing can be built in all of the newly desirable areas. Otherwise the mismatch of supply and demand will make any existing housing, however crappy, unaffordable.
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#10
mpd618 is bang on that reducing (or eliminating) parking requirements is a good way to encourage housing affordability. Parking requirements mean a big subsidy to (generally more affluent) car-owners by (generally less affluent) non-car-owners. Here is a good explanation.
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#11
(11-06-2015, 09:25 AM)Andy Wrote: ..Maybe not so much at Mill/Courtland since that area isn't built up much. I'm expecting the Cedar Hill area to gentrify fairly quickly though. As well as the area around the hopsital...

Out of curiosity, what do you specifically see happening in these neighbourhoods? I know that Cedar Hill is known regionally as being a lower-income area, but I would say both of those areas have a real mix of people, and in both (it seems to me) there are some affluent people already. I wouldn't characterize either neighbourhood as particularly poor, particularly dangerous, particularly rundown. What would "gentrification" in those areas seem like to you?
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#12
(11-06-2015, 08:20 AM)ookpik Wrote: I saw this in Toronto with the Sheppard subway. Sheppard Ave E from Yonge St to Don Mills Rd used to be mostly strip malls with some post-war veteran housing and a few rental towers. Now a decade later it's lined, almost wall to wall, with highrise condo towers. Moreover existing housing north of Sheppard, e.g. in Bayview Village has more than doubled in price during that decade.

I think housing in most areas of Toronto has more or less doubled during that decade, Sheppard is not unique in that regard.
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#13
(11-06-2015, 01:28 PM)MidTowner Wrote: mpd618 is bang on that reducing (or eliminating) parking requirements is a good way to encourage housing affordability. Parking requirements mean a big subsidy to (generally more affluent) car-owners by (generally less affluent) non-car-owners. Here is a good explanation.

To both mpd618 & MidTowner: What you're saying makes sense in that it would reduce the overall price slightly, but I think my point still stands: The cost per unit to build (even completely omitting parking) has very little to do with the luxury/premium finishes within the unit (unless they are exceptionally high-end, but that is not the case with the majority of the units in the condos going up). Condo units - even without parking - are still in the $200k's or higher. What everyone always misses is that the rents are dictated by the mortgages. Lets assume a a $250k condo with no parking - a landlord gets an 80% LTV mortgage - the payment is $930/month (CIBC mort calculator - 1 yr closed at 2.84%) + property taxes + insurance + condo fees. That unit is going to be on the rental market for $1500/month. Pretty sure that's not affordable housing.
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#14
(11-06-2015, 01:54 PM)Owen Wrote:
(11-06-2015, 01:28 PM)MidTowner Wrote: mpd618 is bang on that reducing (or eliminating) parking requirements is a good way to encourage housing affordability. Parking requirements mean a big subsidy to (generally more affluent) car-owners by (generally less affluent) non-car-owners. Here is a good explanation.

To both mpd618 & MidTowner: What you're saying makes sense in that it would reduce the overall price slightly, but I think my point still stands: The cost per unit to build (even completely omitting parking) has very little to do with the luxury/premium finishes within the unit (unless they are exceptionally high-end, but that is not the case with the majority of the units in the condos going up). Condo units - even without parking - are still in the $200k's or higher. What everyone always misses is that the rents are dictated by the mortgages. Lets assume a a $250k condo with no parking - a landlord gets an 80% LTV mortgage - the payment is $930/month (CIBC mort calculator - 1 yr closed at 2.84%) + property taxes + insurance + condo fees. That unit is going to be on the rental market for $1500/month. Pretty sure that's not affordable housing.

I don't want to seem like I have no respect for individuals who buy condo units to rent. But purpose-built and professionally-managed apartment buildings are a much bigger part of the rental market. One positive is that we're finally seeing purpose-built rental stock being built again, and I think in many parts of our region rents are holding steady for that reason.*

You're absolutely right that finishes are a tiny part of the cost of providing housing, and people get a bit confused about "high-end" finishes being a big cause or component of high housing costs. I think rents are not really married to construction costs, either, especially when a lot of buildings around could probably have been fully depreciated by now. It's supply and demand which set rents, ultimately, and when supply is constricted (or demand shoots up), rents reflect that.

I don't think we're in the midst of any kind of affordable housing crisis. We should be proactive in trying to ensure that people of a variety of means are able to live in places with good access to employment and services, even when demand goes up as a result of LRT.

*This reminds me of a conversation I had with someone I ran into by chance. She evidently owns a triplex in the Victoria Park area, and was complaining about the city approving condo projects, and viewed that as a cause of her rents going down in the last few years. She told me by how much, but I doubted the veracity of the specific number. Her logic was fuzzy at best. I'm not sure, but my experience does tell me that rents in Kitchener have not been going up very fast lately.
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#15
(11-06-2015, 08:20 AM)ookpik Wrote:  What are Kitchener and Waterloo doing in this regard? What else should they be doing?

As far as I know, the City of Waterloo does not an affordable housing strategy or policy, while Kitchener does. Maybe it's time to push Waterloo to start considering it?
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