Analysis: Since around 2021 there has been controversy surrounding the proposed El Paso deck park mostly centered around the cost of building it. Many of the discussions for or against the project lack details about what is driving the expansion of the highway that has provided the reason for the deck park. In essence, what has made the downtown deck plaza possible is the expansion of I-10 by the Texas Department of Transportation. Without it, there would be no discussions over the deck park today.
An important element of the expansion of I-10 is the need to allow for more traffic – automobiles and trucks – to travel through downtown El Paso. This negates the arguments for walkable communities and green space. Whether necessary or not, more pollution is the consequence of the highway expansion.
The proposed downtown deck plaza focuses on reconnecting “neighborhoods historically separated by I-10 to enhance livability, provide economic opportunity, add greenspace,” and “celebrate the region’s rich heritage and culture.” The use of the catch phrases is a marketing gimmick learned from past controversies like the Glass Beach study, with the latest being the Duranguito controversy. Each phrase is intended to placate critics by sounding inclusive.
References to a crucial component important to activists is the issue of affordable housing. Affordable housing is anecdotally referenced in the feasibility studies as nothing more than spurring housing development with public policy requiring that “a certain percentage” of new housing “be affordable.” Vancouver tried this starting in 2009. New development was taxed to help fund quality of life. Vancouver’s public policy also included affordable housing with programs such as Rental 100 that encouraged new apartments to be 100% rental. The impetus was for more affordable housing. It failed.
The 125 pages of the feasibility study for the deck park, divided into two parts, only mentions affordable housing twice. The one specific mechanism for making housing affordable only states that the City will make a policy requiring that a percentage of new housing be affordable. The feasibility studies offer no information about how or when the City will make the policy nor does it offer any guidance as to what the policy will look like.
To understand the magnitude of the problem one only needs to look at Vancouver, arguably one of the most livable cities in North America but also one of the least affordable. Adding to the understanding of the experience of Vancouver is knowing that Vancouver required new housing development to pay taxes that created the quality of life that Vancouver is known for today.
But building more affordable housing does solve the problem of housing, as Vancouver demonstrates. Vancouver is “Canada’s most expensive city.” Climbing housing prices have pushed renters out. The high price of housing is blamed on a problem of supply and demand. Simply, there are not enough houses for those looking for one.
Understanding why Vancouver failed to provide affordable housing is why El Paso’s public policy of encouraging affordable housing will also fail. It is a discussion glossed over by both proponents of the deck plaza and those against it.
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Between 1970 and 2020, Vancouver “tripled the number of homes within its limits” by adding density to the city. Density is where more people live in a footprint than before, i.e. multi-family developments. A homeowner’s value is derived by the land on where their home sits. When ordinances limit how many houses can be built on a parcel of land, the value of the land increases because of the restriction on density. It is the land that has value in single family homes. But in multi-family housing, especially in rental units, the renters are the value and not the land. The more renters in a footprint the more revenue they generate for the investors in multifamily developments.
Vancouver demonstrated that by allowing developers to build denser housing, the value of the property is no longer the dirt it sits on, but rather, the value becomes the number of renters that can be put on the same parcel of land. More renters equal more income for the owners of the multi-family housing.
Looking to ensure access to affordable housing, Vancouver officials made public policy that reduced fees for developments that offered units below market rates. A problem soon emerged. Developers offered rent controlled units for a limited time, usually during the first rental term to meet their obligations. Rental prices increased in subsequent terms eventually reaching the market rate.
To remedy the problem, Vancouver officials launched the Moderate Income Rental Housing Pilot Program (MIRPP). It added the component that affordable housing units would now be permanently stabilized at below market rate in return for concessions to the developers that allowed market-rate units along with affordable housing. The policy also included looser restrictions on the developments to help stimulate them. It was hoped that affordable housing units permanently priced at a percentage of the market rate would help to alleviate the housing problem.
What happened instead was that, in the case of at least one developer, the controlled-rate apartments were made available after the market rate apartments. Because the rent revenues are based on the renters and not the land, the demand would increase the rents, thereby pricing the rent stabilized units higher as the rents increased due to more renters in the complex.
Vancouver offers a lesson to El Paso’s policy makers and activists alike because as housing density increased it allowed Vancouver officials and residents greater access to enhanced quality of life for those in the footprint through increasing taxes created by the developments. The taxes were a windfall for the community. The taxes paid for parks, schools, transit and supposedly affordable housing.
The problem, though, was that everyone paid for the quality of life while the poorer constituents were systematically priced out of what they helped to pay for.
Vancouver, like El Paso, has obstacles that limit the city’s ability to grow. Vancouver is limited by mountains, the ocean and the US border. El Paso is limited by New Mexico and by México to the south. The mountain dissecting the city also limits housing. To the west is Hudspeth County.
Although several factors are blamed on what caused Vancouver’s housing crisis, like foreign investment in properties, limited availability of land and unchecked population growth and not enough building, the one thing tied to the debates is that affordable housing is defined by renters being able to afford the rent. Renters are excluded from the “American Dream” because their rent payments provide the “American Dream” to their landlords instead of to themselves.
The American Dream
At the heart of the “American Dream” is home ownership. Americans aren’t the highest homeowners when compared to other countries. Between 1970 and today, less than 70% of Americans own a home. At its peak, 69.2% of Americans owned a home in 2004. Since then, it has trended downward towards 62.9% in 2016 when it started to peak again. Today, around 65% of Americans own a home.
Most people understand that owning a home builds wealth for the family. It also opens financial opportunities that are difficult to achieve without owning a home. But it is also an important element of America’s national economy.
Homeownership represents almost 17% of America’s GDP. GDP is the measure of the strength of the country’s economy.
Removing almost a quarter of the country’s economy – homeownership – will negatively impact the US economy. This is the discussion that climate change advocates, supporters of “walkable communities” and the proposed downtown deck are also ignoring.
The Problem Of Renters
The single most important problem with multi-family development that mostly relies on renters for its financial models is that it erodes the single most important resources for both the American people and the country. Investors want to build rental properties instead of sellable units that generate a one-time profit over one that generates recurring profits for the life of the investment. This is why subscriptions are now becoming the new normal from automobiles to consumables.
Affordable housing is about making housing affordable to the members of the community. The barrier to buying a house, access to credit and down payments will only get worse in the coming years without government intervention.
Renters are excluded from the “American Dream” because their rent payments pay for the “American Dream” of the investors in the housing they live in.
Every discussion in El Paso over affordable housing, quality of life, building taxpayer-funded entertainment venues and now the deck plaza centers around renters being part of the equation. Not only do renters hurt the American economy by not becoming homeowners they exclude themselves from the “American Dream.” As Vancouver demonstrates they also help pay for the quality of life that they are eventually driven from.
Vancouver is the textbook example of how public policy, no matter how well meaning, does not make affordable housing available even when it is part of the public policy where taxes are used to enhance the quality of life.
Believing that El Paso officials will somehow create public policy bringing equity to low-income people assumes that El Paso’s leadership is more capable than Vancouver’s leadership was when it embarked on making Vancouver the example of quality of life. In Vancouver, the quality of life has come at the expense of the low income benefitting multi-family investors building recurring revenues for themselves and their families.