B.C.’s housing minister is defending the NDP’s now-scrapped HousingHub program after B.C. Housing won a foreclosure order against a Merritt developer who defaulted on a low-interest government loan.
The government-run housing agency gave the developer a $16.6 million low-interest loan in 2020 for a 75-unit rental building in Merritt, with 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 low-interest financing to developers in exchange for a guaranteed percentage of below-market units.
In April, a B.C. Supreme Court judge ordered the developer Olympic Villas Inc. and its construction company, TBS Procurement Interface Inc., to repay the more than $18 million they owed.
“That is the only HousingHub project that had challenges with their financing,” Housing Minister Ravi Kahlon told CBC News.
“The project remains viable. If for some reason they don’t make their payments, we’re going to have a non-profit come in and operate it and everyone living in the building will be able to continue to live at the same rates that were there before.”
Kahlon has been on the defensive this week after critics pointed to the high rents listed at one HousingHub-funded building in Vancouver’s Kitsilano neighbourhood as evidence the program has failed to produce enough affordable housing.
Just 14 of the 68 units in the L2 building at 1807 Larch St. are listed at below-market rent, while other units rent for $2,600 per month for a studio and up to $4,200 per month for a two-bedroom unit.
Peter Milobar, B.C. United’s finance critic, said the projects in Merritt and Kitsilano are just the latest in a long string of embarrassments related to the HousingHub program, which he’s branded the “housing flub.”
“Instead of taking action to address the concerns brought forward, they kept approving more and more projects and now what we’re finding is a lot of those projects are not actually providing affordable housing,” he said.
This is not the first time the Official Opposition has raised problems with the Olympic Villas.
Last year, it came to light that some of the units were being advertised on Airbnb and Expedia for $250 a night and that units in the building were renting for up to $2,380 per month, well above the province’s rent cap of $1,650 a month
Kahlon promised that the B.C. Builds program, announced by Premier David Eby in February, will improve upon the HousingHub program.
A signature plank of Eby’s housing platform, B.C. Builds will give $2 billion worth of low-interest loans to developers or non-profits with the goal of securing 20 per cent of units below market rent.
However, Kahlon said the program is different because, in many cases, the government provides the land, eliminating a significant cost to developers.
However, Milobar said B.C. Builds is just a rebranded HousingHub program.
“The government’s answer to all of this is to rename the HousingHub, put more money into it, and think they’re going to get a better result. It’s simply nonsensical.”