British Columbia’s housing minister is defending the NDP’s now-defunct HousingHub program after BC Housing obtained a foreclosure order against a Merritt developer that defaulted on a low-interest government loan.
The state housing authority granted the developer a $16.6 million low-interest loan in 2020 for a 75-unit apartment building in Merritt, on the condition that 45 units be rented at below-market rates.
The project was part of the NDP’s HousingHub program, launched in 2018 to provide developers with low-interest financing in exchange for a guaranteed percentage of below-market housing units.
In April, a British Columbia Supreme Court judge ordered developer Olympic Villas Inc. and its construction company TBS Procurement Interface Inc. to repay more than $18 million in debt they owe.
“This is the only HousingHub project that has had funding issues,” Housing Minister Ravi Kahlon told CBC News.
“The project is still viable. If for any reason payments are not made, a nonprofit organization will operate the project and all residents of the building will be able to continue living at the same prices as before.”
Kahlon was on the defensive this week after critics cited high rents for a HousingHub-funded building in Vancouver’s Kitsilano neighbourhood as evidence that the program had not created enough affordable housing.
Only 14 of the 68 units in the L2 building at 1807 Larch Street are offered at below-market rents, while for other units, rents are $2,600 per month for a studio and up to $4,200 per month for a two-bedroom unit.
Peter Milobar, finance critic for BC United, said the projects in Merritt and Kitsilano were just the latest in a long line of embarrassments related to the HousingHub program, which he described as “housing construction mishaps.”
“Instead of addressing the concerns raised, they approved more and more projects. And now we’re finding that many of these projects are not actually creating affordable housing,” he said.
This is not the first time that the official opposition has raised issues with the Olympic villas.
Last year, it came to light that some of the units were being offered on Airbnb and Expedia for $250 a night and that units in the building were renting for as much as $2,380 a month, well above the province’s rent cap of $1,650 a month.
Kahlon promised that the BC Builds program, announced by Premier David Eby in February, will enhance the HousingHub program.
BC Builds, a central component of Eby’s housing program, will provide $2 billion in low-interest loans to developers and nonprofits to secure 20 percent of the housing units at below-market rent.
However, Kahlon said the program is different because in many cases the government provides the land, which imposes significant costs on developers.
However, Milobar said BC Builds is simply a rebranded HousingHub program.
“The government’s response to all this is to rename HousingHub, put more money into it and think they’re going to get a better outcome. That’s just nonsense.”
