The B.C. NDP’s HousingHub program is coming under scrutiny after one taxpayer-subsidized rental building in Vancouver’s Kitsilano neighbourhood, touted as “affordable”, is now listing units for $2,600 per month for a studio and $4,200 per month for a two-bedroom unit.
The listed rental prices are well above provincial affordable housing thresholds, and one housing researcher says it’s an example of how difficult it is to build affordable rental buildings when market prices are so far beyond what average renters can afford.
The leader of the B.C. Green Party called it an “infuriating” misuse of taxpayer dollars.
The NDP government provided a $31.8 million low-interest loan to Vancouver developer Jameson Development Corp. for the 68-unit rental building through the HousingHub program, which is aimed at providing housing to middle-income renters shut out of the real estate market.
Premier David Eby, who was the minister responsible for housing at the time, was quoted in a December 2021 government news release announcing the project.
“Our government is investing in more affordable housing for people who work and live in Vancouver, and throughout B.C.” he said.
The building at 1807 Larch St., called the L2, is set to be complete next month and is now advertising units.
According to the building’s website, a 400-square foot studio apartment starts at $2,599 a month and a 840-square foot two-bedroom, two-bath unit is listed for $4,299 a month.
B.C. Green party leader Sonia Furstenau said that’s “infuriating.”
“People who need housing are not the people who can afford $4,200 a month in rent,” she told CBC News.
‘Not an affordability program’
B.C. Housing would not make anyone available for an interview with CBC News.
However, the housing agency’s vice-president of development Michael Pistrin told the Globe and Mail last week that the HousingHub “is a supply-based program. It’s not an affordability program. The whole intent of the HousingHub was just to build more housing. And it was intended to be market [rate] rental housing.”
The original press release said that 14 units in the building will be “tenanted at moderate-income rent levels” for those with household incomes of less than $115,000 per year.
However, the waitlist for those units is already full. The developer did not return calls from CBC News.
Furstenau said adding more supply at market rates is not going to solve the housing crisis.
“Vancouver has been one of the jurisdictions that’s created the most supply in the last several decades, and we have the most expensive housing in North America,” she said.
Andy Yan, an urban planner and director of Simon Fraser University’s City Program, asked what the public interest was in subsidizing developers who are still charging rents that are out of reach for 75 per cent of Vancouver renters.
“It’s an issue of what you’re paying for versus what you’re getting,” Yan said.
“I think it’s affordable to a certain population. Now is this necessarily affordable to who you’re trying to house? This is the issue. Who is this ultimately going to be affordable to?” the professor added.
“One can say that you can create a supply of Ferraris, but that fact is that people can only afford Hondas.”
Yan acknowledged that considering land prices and construction costs, “building affordable housing is hard.”
The SFU professor added that the government’s definition of middle-income British Columbians is problematic because it includes homeowners, who have a higher median income than renters.
For example, the median household income for renters in the City of Vancouver is $66,500, compared to the median income for homeowners which is $106,000, according to the most recent census data.
Yan said government rental programs billed as “affordable” should guarantee that rents are set at no more than 30 per cent of the median renter household income, which in Vancouver would be no more than $1,663 a month.
Money to be paid back
Housing Minister Ravi Kahlon was not available for an interview this week.
His ministry said in a statement that the financing used to build the project at 1807 Larch St. will be fully paid back to the province, plus interest, and used to fund additional housing projects in the future.
Housing has been top of mind for many British Columbians since the 2024 budget was revealed last month, both from the NDP government and BC United Opposition.
CBC’s Dan Burritt spoke with Hasan Juma, a realtor with Oakwyn Realty, about what both parties are proposing.
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 B.C. Housing’s website.
The ministry said inflation, higher construction costs and borrowing costs have made it difficult for the government to spur the construction of middle-income housing, which is why the HousingHub program has been “retired.”
Instead, Eby has launched B.C. Builds, a signature plank of his housing platform, which promises to use $2 billion in government financing to spur the construction of rental housing on underused land, with a guarantee that 20 per cent will be listed for below market value.
The aim, Eby said when the program was launched in February, is to provide housing for middle-income British Columbians who make too much to qualify for B.C. Housing subsidized units but are still struggling to afford market rent.
Furstenau, however, said B.C. Builds is just a repackaged HousingHub program which does not put enough emphasis on building below-market or co-op housing.
A provincial government housing program that gives taxpayer-subsidized loans to developers is coming under fire. One rental building in Kitsilano, B.C., that was originally touted as “affordable” is now advertising rents between $2,500 and $4,000 a month. As Katie DeRosa reports, the listings are prompting critics to question the definition of “affordable.”