The BC NDP’s HousingHub program is coming under scrutiny after a taxpayer-subsidized rental building in Vancouver’s Kitsilano neighbourhood that was touted as “affordable” now offers apartments for $2,600 a month for a studio and $4,200 a month for a two-bedroom.
The advertised rents are well above provincial affordable housing thresholds. A housing researcher says this is an example of how difficult it is to build affordable rental housing when market rates are so far above what the average renter can afford.
The leader of the Green Party of British Columbia called this an “annoying” misuse of taxpayers’ money.
The NDP government provided Vancouver developer Jameson Development Corp. with a $31.8 million low-interest loan for the 68-unit rental building through the HousingHub program, which aims to provide housing for middle-income renters who are excluded from the housing market.
Prime Minister David Eby, then-housing minister, was quoted in a December 2021 government press release announcing the project.
“Our government is investing in more affordable housing for people who work and live in Vancouver and across British Columbia,” he said.
The building at 1807 Larch St., called L2, is scheduled for completion next month and is now offering residential units.
According to the building’s website, a 390-square-foot studio apartment starts at $2,599 a month, and an 800-square-foot two-bedroom, two-bathroom apartment is listed for $4,299 a month.
British Columbia Green Party leader Sonia Furstenau said it was “exciting.”
“The people who need housing are not the people who can afford $4,200 a month in rent,” she told CBC News.
“No affordability program”
BC Housing declined to provide anyone for an interview with CBC News.
However, Michael Pistrin, the housing authority’s vice president of development, told the Globe and Mail last week that HousingHub is a “supply-driven program. It’s not an affordability program. The whole intent of HousingHub was just to create more housing. And it was to provide market-rate rental housing.”
The original press release stated that 14 units in the building would be rented “at median rents” to people with household incomes of less than $115,000 per year.
However, the waiting list for these units is already full. The developer did not return calls from CBC News.
Furstenau said increasing supply at market prices will not solve the housing crisis.
“Vancouver is one of the jurisdictions that has seen the greatest supply in recent decades, and we have the most expensive housing in North America,” she said.
Andy Yan, urban planner and director of the City Program at Simon Fraser University, asked what public interest there was in subsidizing developers who still charge rents that are unaffordable for 75 percent of Vancouver’s tenants.
“It’s about what you pay for and what you get,” Yan said.
“I think it’s affordable for a certain demographic. But is it really affordable for the people you’re trying to house? That’s the question. Who will ultimately be able to afford it?” the professor added.
“You can say you can create a supply of Ferraris, but the fact is that people can only afford Hondas.”
Yan acknowledged that given land prices and construction costs, “it is difficult to create affordable housing.”
The SFU professor added that the government’s definition of middle-income British Columbians is problematic because it includes homeowners who have a higher average income than renters.
For example, according to the latest census data, the median household income for renters in the City of Vancouver is $66,500, while the median income for homeowners is $106,000.
Yan said government rental programs touted as “affordable” should guarantee that rents are no higher than 30 percent of the median income of a renter household, which in Vancouver is no more than $1,663 a month.
Money to be repaid
Housing Minister Ravi Kahlon was not available for an interview this week.
His ministry said in a statement that the financing for the 1807 Larch Street development would be repaid in full to the province, plus interest, and used to finance other future housing projects.
Since Budget 2024 was unveiled last month by the NDP government and the BC United Opposition, housing has been a top issue for many British Columbians. CBC’s Dan Burritt spoke with Hasan Juma, a real estate agent with Oakwyn Realty, about both parties’ proposals.
The ministry also said market conditions have changed since the HousingHub program was launched in 2018. The goal of the program was to “increase the supply of affordable housing for middle-income earners,” according to the program overview on BC Housing’s website.
The ministry said inflation and higher construction and credit costs had made it difficult for the government to boost the construction of middle-class housing, which is why the HousingHub programme had been “suspended”.
Instead, Eby has launched BC Builds, a central element of his housing program, in which he promises to use $2 billion in government funding to stimulate the construction of rental housing on unused land, with the guarantee that 20 percent of it will be offered below market value.
The goal, Eby said when launching the program in February, is to provide housing for middle-income British Columbians who earn too much to qualify for BC Housing subsidized housing but still struggle to afford market rent.
However, Furstenau said BC Builds is just a repackaged HousingHub program that doesn’t place enough emphasis on building below-market housing or cooperative housing.
A provincial government housing program that provides tax-subsidized loans to developers is coming under fire. A rental building in Kitsilano, BC, that was originally touted as “affordable” is now being offered with rents ranging from $2,500 to $4,000 a month. As Katie DeRosa reports, these offers are causing critics to question the definition of “affordable.”
