What happened to the 114,000 new affordable housing promised in BC? : Policy notice
March 11, 2022
During the 2017 election campaign, as part of its plan to make life more affordable, the BC NDP pledged, if elected, “to build 114,000 affordable rental, nonprofit, cooperative and condominium homes through partnerships over ten years. These homes will be a mix of student, single, senior and family housing, ranging from subsidized housing to quality commercial rental housing.”
The 114,000 target remains rhetorically central to the BC government’s subsequent 2018 year Houses for BC 30-point plan that included planned investments in new housing, tax measures for high-end properties and non-residents, improved tenant protection and other regulatory changes for the real estate market. However, there was little follow-up in subsequent budgets.
This post breaks down progress towards the 114,000 target, for which there is a glaring lack of detail set by BC Housing (the Crown Corporation, which manages most of the province’s housing agenda) and the BC Government (currently the Ministry of the Attorney General and Housing). Much of the data in this post comes from internal sources teaching materials to Ministers and include actions up to April 2021. A separate post looks at the impact and revenue of the 2018 tax changes.
Four years after the publication of Houses for BC, it’s hard to see major advances in BC housing affordability. In fact, the recent price escalation has made the situation as bad as ever. There is still a lot to be done, especially when it comes to expanding the stock of non-standard rental apartments. The BC government needs to play a much larger role in direct public investment in housing, including housing development, giving public lands to nonprofits for development, and providing low-interest financing for non-market projects. Both the terms “social housing” and “affordable housing” have been defined differently, but for our purposes we are interested in new rental housing that ranges between 50-80% of median rents.
Residential investments since 2017
the Houses for BC Plan was delivered in Budget 2018 and pledged $6.2 billion (capital and operating funding) over 10 years, but for fewer than 33,700 units, not the 114,000 units. These units were divided as follows: affordable rental stock (14,350 new units, 4,900 existing units), student housing (5,000 beds), modular and affordable rental housing for people affected by homelessness, and the most vulnerable (3,700 units living in announced in a September 2017 budget update). , supportive housing (2,500 units), transitional housing for women and children (1,500 units), and housing for indigenous peoples (1,750 units). The 2019 and 2020 budgets added funds for a homelessness action plan consisting of 400 new units of supportive modular housing.
Four years after the release of Homes for BC, there has been little progress in BC housing affordability.
Table 1 compiles data from BC Budgets and others teaching materials made available to Finance and Housing Ministers as at 30 April 2021. There is a large gap between the headline numbers announced in the 2018 budget, which are 10-year intentions, and the actual budget allocations made in the first three-year budget ($6.2 billion versus $1.9 billion). billion US dollars). The table also distinguishes between housing investment grants and low-interest loans.
The total number of completed units was very small, with the vast majority of completions reflecting investment in modular and supportive housing for people affected by homelessness or other deep vulnerabilities (3,156 units out of 3,625 total completions).
Notes: The 2018 budget also includes 4,900 units as part of deepening affordability of existing projects, not included in this table. The overall budget includes operating and capital contributions to grant programs and loans to loan programs.
Source: Attorney General and Minister for Housing, Estimates Notes 2021, Notes B1.1, B1.2, B5.2
The Community Housing Fund, which most closely resembles historic council housing, had only 310 units completed. Although more units are on the way, including nearly 2,000 units under construction, approximately 3,400 units are only listed as “Initiated”. We should recognize that housing projects take time to get off the ground and complete, especially in light of the COVID-19 pandemic.
Instead of more direct investment in affordable rental housing for ordinary households, the BC government is stepping in with low-interest loans. An important piece is the Housing Hub programwhich “develops, facilitates and supports partnerships across the housing sector to create market-based and affordable housing for middle-income households without the need for ongoing subsidies.” In the 2021 budget, the Housing Hub was given an increased ceiling of $2 billion allocated for low-interest loans.
Housing Hub has completed 1,687 units with an additional 1,840 units in various stages of construction or development. These units are earmarked primarily for the Provincial Rental Supply Program (combined 2,995 units) and a lesser amount for an affordable home ownership program (532 units).
The Community Housing Fund, which most closely resembles historic council housing, had only 310 units completed.
Low-interest loans were also granted to universities developing new “student beds”. The 5,700 beds/units of dormitory accounts for almost half of the total completions (combined grant and loan programs).
Not included in the table are additional funds blended with COVID homelessness response spending, including renting rooms in hotels, motels and community centers as temporary housing. Also the BC government Bought nine hotels in Vancouver and Victoria at a cost of US$221 million to accommodate people affected by homelessness and living in camps. The budget for 2022 BC provides continued support for approximately 3,000 people in shelters and other temporary housing during COVID-19.
The 2022 budget also added $100 million to the Community Housing Fund (not listed in the table), which will include 885 units. While welcome, the backlog is only being addressed marginally, according to a 2021 Community Housing Fund call for proposals receive Applications for 13,000 new housing units but only 2,600 approved due to funding constraints.
The British Columbia government has primarily stepped up with new housing investments targeting people affected by homelessness and other vulnerabilities. While some more traditional social housing is in the pipeline, it is a relatively small amount and projects have been very slow to complete.
Overall, the BC government’s performance is still far too modest to really impact housing affordability. Residential properties can pay for themselves over time from the rents received, so there is no reason for the government not to build.
Instead, providing low-interest loans in lieu of grants for student housing and other housing partnerships has become a more central focus of the government’s housing agenda. Low-interest loans can be supportive, but are not the same as direct expenditure.
Towards the target of 114,000, over 14,300 units have been completed or are at some stage of development under the various grant programs, while an additional 9,200 are from loan programs. Total completed units from both streams total approximately 11,000 units. Thus, by April 2021, less than 10% of the target of 114,000 units had been completed, rising to 22% if we count units in progress. Much of it is just “initiated” and not under construction, and all categories should show progress almost a year later.
Renewed efforts are needed to put this in later budgets Houses for BC Plan back to the goal. With (unnecessarily) limited resources, it has to be argued that priority should be given to those in the worst circumstances. However, the BC government has significant financial capacity to expand its efforts by acquiring public lands and making them available for non-market development or by making upfront direct investments in dedicated affordable housing. In light of the affordable housing crisis, we urge the BC government to do more of the heavy lifting.
This position is supported by a grant from the Vancouver Foundation.
Topics: housing & homelessness, municipalities