Thousands of low-income housing units at-risk to convert to market rental
Under a controversial social housing sell-off, B.C. government is encouraging non-profits to raise rents as people move out.
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B.C. is set to lose thousands of apartments currently targeted to the province’s most needy under an ongoing social housing shift that relies on market rents to subsidize building operations.
“We estimate that a third of social housing units are at risk of being lost as affordable units to the market, or (to building) deterioration,” said Kishone Roy, executive director of the BC Non-Profit Housing Association.
Roy was responding to a report from B.C.’s Auditor General that criticized the sale of hundreds of government-owned social housing properties to non-profits.
Carol Bellringer found that the sell-off is expected to net the government $500 million for an immediate reinvestment in social housing, but will cost government $1 billion over the next 35 years because it has agreed to help pay the non-profits’ mortgages to the tune of $30 million a year.
Bellringer said government had failed to make a long-term business case for the program, explain what problem it was fixing or demonstrate that the asset sale program will make social housing more sustainable in the future.
Another issue Bellringer identified was the movement away from rent-geared-to-income units — the most expensive form of social housing for governments and social housing providers to run, but the only model that guarantees tenants will pay no more than 30 per cent of their incomes to rent.
In a response to the report, B.C.'s minister responsible for housing, Rich Coleman, said the program is intended to make non-profit housing providers more financially stable. He said several non-profits have been able to build more social housing buildings since gaining ownership of properties.
Most of the new units currently being built with the $500 million will likely not be rent-geared-to-income, Bellringer said: “Although proposals for these units are still under review, early indications suggest that most units will charge low-end-of-market and market rent, with only the potential for some rent-geared-to-income.”
When two BC Housing buildings in Vancouver’s West End were sold to non-profits, the contracts stipulated that the new owners can change the rental rates when tenants move out, said Spencer Chandra Herbert, MLA for Vancouver-West End.
That means that eventually around 50 per cent of the buildings will be for people living on disability, welfare or old age security, while the other half will be set at middle-income rates “for folks making up to 66,000 a year,” Chandra Herbert said.
“We need housing for those folks too,” he acknowledged, “but we’re having a low-income housing crisis.”
Pressure to raise rents comes directly from the provincial government, Roy said.
“What is being proposed by government and by the design of these contracts is when someone leaves the unit, then it’s replaced at market rent or the low end of market so that adds some funds to the project to keep it viable,” Roy said.
“I hear from my members all the time that they don’t want to increase rent.”
Roy believes the asset sale was a good program, because non-profits now have the ability to use their asset to raise financing to repair or redevelop their properties. For years, he said, the non-profit sector has waited for government to step in and help, but “they’ve done nothing.”
“Regardless of the land transfer, the viability of a lot of these buildings and units is still in question,” Roy said.
“This helps it solve it somewhat ourselves, but it doesn’t mean that all of a sudden we have enough money to repair the buildings, or keep rents low.”
To do that, the province or federal government will need to increase the amount of money directed towards rent subsidies. Roy noted that when units of rent-geared-to-income social housing are lost, it will cost hundreds of thousands of dollars and many years to replace that housing.