Rich Folk Poor Folk: Mixed-Income Housing

Vancouver’s experiment with mixed-income housing broke new ground. But to what extent is it a replicable model? When Bob Rennie set out to sell 536 glitzy condominiums in the Woodward’s complex next to 200 units of Downtown Eastside social housing, Vancouver’s real estate marketer extraordinaire took a self-described leap of “blind faith,” one that people told him would ruin his career.?

Many doubted condo buyers would want to live in the Downtown Eastside, but the Woodward’s suites sold in hours.

Vancouver’s experiment with mixed-income housing broke new ground. But to what extent is it a replicable model?

When Bob Rennie set out to sell 536 glitzy condominiums in the Woodward’s complex next to 200 units of Downtown Eastside social housing, Vancouver’s real estate marketer extraordinaire took a self-described leap of “blind faith,” one that people told him would ruin his career.

“I was convinced that Woodward’s would work,” Rennie says, leaning over a round table in the corner of the austere, cement-walled coffee shop below his Chinatown office. Rennie’s choice of slogan for the Woodward’s marketing campaign, “an intellectual property,” pointed to the highbrow allure of the theatre, gallery and university campus included in the complex. But it also hinted at a slightly deeper faith in the buyer’s appreciation of the in-your-face diversity Woodward’s offered.

“It wasn’t just a bet on selling that complex,” he says, gazing out the window to the bustling streetscape outside. “I was placing a bet on mankind.”

The bet paid off: the Woodward’s condos sold out within hours of going on the market. But to UBC sociologist Richard Carpiano, it shouldn’t have come as much of a surprise. According to his research, wealthy buyers have every reason to choose to live among economic diversity.

In 2009 Carpiano and his colleagues asked how levels of affluence in a neighbourhood affect the development of children living there. After reviewing the scores of almost 38,000 children in over 400 neighbourhoods throughout B.C. on a test indicating their readiness for school, Carpiano found that children actually thrived the most in neighbourhoods with a relatively equal proportion of affluent and disadvantaged families. 

He attributes the results partially to the presence of services aimed at assisting lower-income residents, which in turn benefit wealthier residents as well. But he also suspects the results have to do with the greater access to what sociologists refer to as “social capital,” surmising that increased neighbourhood diversity allows a wider range of residents to invest themselves in the community.

Carpiano’s findings, which were published in the academic journal Social Science and Medicine, added a surprising new angle to existing sociological research. While many studies point out the benefits mixed-income neighbourhoods provide to less-fortunate residents, Carpiano’s findings also suggested that the more affluent citizens benefit as well. Living among diversity, Carpiano found, is actually good for everyone.


Vancouver’s neighbourhood diversity

Vancouver has been no stranger to neighbourhood diversity since the early 1970s, when the city decided to develop the industrial land lining False Creek’s south shore between the Cambie and Burrard street bridges into a residential neighbourhood with an equal mix of low-, middle- and high-income groups. The goal in the neighbourhood was to replicate the demographic composition of the entire city within the confines of a single neighbourhood. Then, in 1988, the city passed a policy requiring that 20 per cent of the unit potential in all new neighbourhoods be made available for the development of affordable housing. The idea was to avoid concentrating affordable housing in a few areas. 

In fact, nearly every neighbourhood in Vancouver, from the Downtown Eastside to Yaletown and Point Grey – with the notable exceptions of Shaughnessy and Kerrisdale – has some element of social housing. But that has mostly been the government’s doing. Only recently have private developers been eager to jump into the game. 

“More and more, we’re seeing developers willing to contemplate that type of mix,” says Brent Toderian, Vancouver’s director of city planning. “I think Woodward’s was an important catalyst for making that idea more interesting for the development industry.” 


mixed income housing
Studies on child development suggest there are
clear benefits, for both rich and poor, to living in
mixed-income neighbourhoods.

Mixed-housing advantages

Helping spur that interest is the emerging recognition that mixed housing bears advantages for developers and the city alike. If the city wants public amenities that it otherwise can’t afford to build, it can acquire them from the private sector by offering density bonuses. These allow developers to build a higher building with more units than would be allowed by zoning regulations for the piece of land in question. In return, developers will finance the construction or restoration of public amenities, such as parks, community centres, or, in this case, affordable housing units, out of their own pockets. 

The game, however, has its share of wild cards. Don Forsgren, western region president of the real estate development company Intracorp Projects Ltd., is in the throes of such a development in North Vancouver’s funky Lonsdale core, where three buildings of low-income veterans housing were in desperate need of replacement. So Forsgren cut a deal with the city to consolidate the 76 units of social housing into one brand-new facility and build a tower of market-rate condos on the same property adjacent to it.

But between dealings with the city, the province and the organization running the veterans facility, what should have been an eight-month lead-up process wound up taking nearly two years. For developers such as Forsgren, the process begs the question: What’s in it for me?

Partially, it’s to prepare for what Forsgren believes is the inevitable. “In the future, to acquire well-located land and create really extraordinary developments, you’re going to have to be somewhat outside the box. There just aren’t blocks of land sitting around in good locations,” he says, particularly in the Lower Mainland. 


Rebuilding B.C.’s deteriorating social housing

But there is a vast stock of existing social housing crumbling to pieces and in need of replacement. BC Housing estimates the cost to repair and upgrade its current Vancouver housing stock over the next 10 years will total about $300 million. Meanwhile, the city is setting 20 per cent of unit potential in new neighbourhoods aside for affordable housing that it does not have the financial means to build. This means the city must wait patiently for its funding partner, the province, to slowly fill in the gaps. As a result, many of those gaps remain unfilled.

“I think it really ultimately requires all three of those levels of government – the federal government, the provincial government and the municipal government – to say, This is our problem, and let’s partner with private sector people,” explains Forsgren. 

Plus, when it comes down to neighbourhood vibrancy, Forsgren believes urban people understand the message of Carpiano and his colleagues: “Most buyers don’t want to live in a sterile community without some character to it.” 


Olympic Village housing project

But not everyone would agree that diversity is a winning bet when it comes to housing. Following the 2010 Olympics, the beleaguered Olympic Village project was left with hundreds of unsold condos, and many were quick to point fingers at its 252 units of social housing as the cause, especially when the possibility briefly arose that the Portland Hotel Society, a non-profit traditionally associated with the “hard to house,” might take over management of the units.

“If you think of the population as divided into five groups on a social and economic basis – a’s, b’s, c’s, d’s, e’s – when you start putting together the a’s and the e’s, there is the potential for people to not get along,” said Vancouver developer and architect Michael Geller in a now infamous October 2010 interview with the Globe and Mail. “If you’re going to mix people, it should be a’s, b’s and c’s together or c’s, d’s and e’s.” Comments on online articles about the Village’s woes reflect Geller’s sentiment. For example, one commenter on a Georgia Straight article asked, “Who would want to pay a million bucks for a place shared by a crack addict?”

Geller was at the helm of the original south False Creek development as special co-ordinator for the federal government in the 1970s, and he says he’s not against mixed-income neighbourhoods. But he does advocate that they be done in a way that mitigates financial risk.

“I don’t think we should be mixing very, very low-income people with very, very high-income people,” he says. “It reduces the value of the housing for the high income.” 

Woodward’s succeeded, he says, because 75 per cent of the units were originally priced at $500,000 or less. In other words, it was not marketing to the a’s.

Bob Rennie disagrees. When the property on the corner of Richards and Robson streets that would become the opulent L’Hermitage hotel and condo complex was bought in 2003, he says, it was the most expensive piece of real estate ever sold in Vancouver. Directly next to it? Forty-five units of social housing.

“It’s not for everybody,” Rennie says of housing where all the letters, from the a’s to the e’s, are rubbing shoulders. “And Shaughnessy isn’t for everybody. And living in a boathouse isn’t for everybody.” But that doesn’t mean Rennie thinks mixed housing isn’t still viable: “I believe there’s a deep enough well of buyers with a social conscience.” 

Gregory Henriquez, the architect who designed Woodward’s and who is currently working to create affordable condos, shares Rennie’s faith from first-hand experience. “If you do everything right, it will sell itself, ideally,” says Henriquez. “In the case of Woodward’s, you needed Bob, obviously. But now that Bob has proven he can sell in the [Downtown Eastside] neighbourhood, anyone can do this, if they do it right.” 

Henriquez says that with land in Vancouver so expensive and foreign investment so high, we have to deliberately try if we want to continue to live with economic diversity throughout the city. 

“It just requires people to take risk, and the people best suited to take risk are people like developers,” he says. “The city that only has rich people in it is a resort town. That is very, very unhealthy.”