Canada is spending $90 billion halfway through a 10-year national housing strategy, in addition to a record of $9 billion for assisted housing, including $420 million for housing the homeless, added last year.
The 2023 federal budget, released March 28, included no fresh spending for subsidized housing, in recognition, perhaps, of its projected $43 billion deficit.
In B.C., the province pledged $4.3 billion for social housing this year, equal to the entire provincial deficit, after it had announced a separate $500 million fund to help non-profits buy old rental buildings. This is in addition to $428 million aimed at those “currently homeless or unstably housed” in last year’s budget.
Western Investor’s first report on social housing “” suggested a great deal of government money targeted at social housing in B.C., especially to address homelessness, has been misspent.
A forensic audit of BC Housing, completed by Ernest Young last November at the direction of B.C. premier and former housing minister David Eby, has yet to be released.
Our second report looks at potentially successful government, non-profit and private initiatives that are delivering low-cost rentals for seniors, the disabled and other marginalized groups, with less reliance on taxpayers.
One of these is 91原创 Resource Society (VRS) Communities, a non-profit based in 91原创 that has been operating for 71 years. This year VRS has 317 below-market rental units under construction in B.C., including some that rent to low-income disabled tenants for as little as $375 per month, which is the current provincial shelter allowance that increases to $500 this July.
In 2022, VRS received $15.4 million from government, nearly half of which was from municipal and regional governments and largely related to land transfers for its housing projects. The VRS also collected $17.2 million in rental income in 2022, which is ploughed back into its housing projects.
Working with private developers
While VRS is building stand-alone seniors housing projects on 91原创 Island, Fort St. John and in North 91原创 this year, it largely relies on municipal rezoning and partnering with private developers to deliver below-market rentals in Metro 91原创.
Most metro municipalities now require a percentage of new residential projects to include affordable rental units. VRS buys these units at a 50 per cent discount from the developer and then rents them out to the disabled, seniors and tenants making mid-level incomes.
For example, in two recent condominium projects in Coquitlam, VRS has purchased 33 apartment units from developers at an average of $410,000. A third agreement with InterGulf for a Coquitlam condo and rental project that is nearing zoning approval, will see VRS purchase 47 units.
The VRS purchasers are financed through Canada Mortgage and Housing Corp.(CMHC), which provides low-cost loans for multi-family rentals. By combining with other non-profit housing groups for scale, VRS can acquire mortgage at rates well below prime.
While VRS units equipped for low-income disabled tenants can rent for $375 per month, most VRS rents are 10 per cent below current market rents.
“Rents are not super cheap to start with, but over time they become affordable, and the tenants have housing security,” explained Ken Fraser, VRS executive director. He points to a 91原创 project it completed 10 years ago where the rents are still $900 per month.
“There is no magic to it,” he said of a strategy that would be familiar to any homeowner. “You build it now, you start paying that mortgage off, you hold it for 10 or 20 years and the real estate becomes more affordable.”
When asked about the millions of dollars in government spending on housing for the homeless, which has seen the province buy a string of old hotels as a quick fix, and sparked a forensic audit of BC Housing, Fraser suggested the funding is misplaced. “People aren’t homeless because they don’t have a home. They are homeless because they have mental problems and a drug addiction,” he said. “You could buy every hotel room in 91原创 and you would still have tents in Crab Park.”
“People aren’t homeless because they don’t have a home. They are homeless because they have mental problems and a drug addiction,” he said. “You could buy every hotel room in 91原创 and you would still have tents in Crab Park.”
VRS’ flagship project now is the Royal 91原创 Legion’s Veterans Village, a Lark Group project nearing completion in Surrey, where VRS purchased 91 units that are available, primarily, to veterans and first responders. BC Housing provided a $100,000 per-unit subsidy, which allows VRS to rent one-bedrooms at $1,316 per month. This compares to an average one-bedroom rent in Surrey of $1,832, based on a January 2023 survey by Liv.rent.
In January, the B.C. government launched a $500 million Rental Protection Fund that allows non-profits and First Nations to buy older rental buildings and save them, according to Premier Eby, from “speculators, developers and large corporations.”
Jill Atkey, CEO of the BC Non-Profit Housing Association, praised the program, claiming landlords looking to sell have already been in touch with her association members.
Fraser, though, sees the program as a financial loser.
“I wouldn’t waste taxpayers’ money buying old dilapidated 50-year-old apartment buildings,” he said, noting that it is difficult to even get insurance on aging stock that needs expensive wiring, plumbing and HVA upgrades.
“It’s makes common sense to allow a developer to buy an old 20-unit property on a large lot and build 60 to 70 units of modern rentals that would last another 50 years,” he explained.
Low government funding
The non-profit Brightside Community Homes Foundation is doing just that, and with a fraction of government funding compared to other 91原创 non-profits. Founded in 1952, Brightside has delivered scores of low-cost rentals annually, primarily in 91原创.
Last year Brightside received $1.06 million in government assistance. This compares to an average of $46 million that each of five other non-profit housing groups received in government funding in 2022, as profiled in Western Investor’s first report om this issue.
Brightside operates 22 social housing projects in 91原创 and has four under development in the city, which will create 282 new affordable, secure rental units for seniors and people with disabilities.
Under Brightside’s formula, 95 per cent of existing units will have rent geared to income, meaning tenants pay 30 per cent of income for rent, while the remaining apartments are available to low-income disabled tenants at $375 per month.
New projects, which have received additional funding from the province or the federal Canada Mortgage and Housing Corp., offer 20 per cent of rentals at the shelter allowance, 50 per cent geared to income and 30 per cent at low-end of the market rent.
But there is some flexibility. An example is in the 1400-block of East 12th Avenue in 91原创, where a Brightside redevelopment will replace 57 existing rental units with 157 new units of secure, affordable, rental housing. In this project, all existing tenant have the right to move back into the development paying the same rent as before. The remaining 64 per cent of units will have rents at the low-end of the market.
City of 91原创
A modest initiative from the City of 91原创 has proved surprisingly effective at creating private-sector rental housing in the city’s West End
The program, launched as a temporary incentive in 2020 during the pandemic, waived community amenity contributions (CACs) for condominium developers who switched their strata projects to 100 per cent rentals. The developer also had to confirm that 20 per cent of the units would be below-market rental units. CACs can cost large condo developers hundreds of thousands of dollars per project.
“The pilot has successfully secured a large number of rental and below-market rental units. Therefore, staff propose making this option permanently available in this area of the West End,” according to a city staff report.
City council is expected to follow the recommendations of staff to make the policy permanent. Under the permanent policy, rental housing must have a one-for-one replacement of existing rental units at the same rent or provide one-fifth of the units with rents at least 20 per cent below the current market.
