Western Canada: B.C. Auditor-General finds province spent appropriately on hotels for the homeless

Good morning! Wendy Cox in Vancouver this morning.

Over the course of two years, British Columbia’s housing agency spent almost a half-billion dollars in emergency purchases of hotels to house the homeless.

Spending money in an emergency is always fraught: the chances of making unwise choices and paying more than necessary are always high. So it was likely with some relief that B.C.’s housing minister received the latest report from Auditor-General Michael Pickup. His report concluded the $221-million spent on nine hotels met the standards of good value for money. He found the price was 8 per cent less than their assessed values. The province also spent $200-million on further hotel purchases during that time, but those were not part of the audit.

Mr. Pickup concluded there was no sign that any usual requirements were bypassed during the purchases, which he said involved “considerable public expense” and were decided on very quickly during a crisis.

The Howard Johnson Hotel on Granville Street in downtown Vancouver cost $56.6-million and the Patricia Hotel in the Downtown Eastside cost $64.4-million, both well in excess of the normal cap of $35-million set for such purchases by the Treasury Board. Both have parking lots next to them that BC Housing said at the time could be developed. They were part of a total of $403-million spent in the past two years to buy hotels, motels, shelters and other buildings that were part of the emergency response to the pandemic and to clear homeless camps in Vancouver and Victoria.

Still, Housing Minister David Eby told reporter Frances Bula in an interview he’d prefer not to have to do things that way again.

“The province needs to get out of the crisis response to homelessness,” Mr. Eby said.

He said the province is working on long-term solutions, including a new fund to help non-profit groups buy apartment buildings to keep them off the speculative market. In the 2022-23 provincial budget, announced last week, the provincial government pledged to devote $166-million over the next three years as part of its 10-year affordable housing plan.

But Mr. Eby’s idea of a less harried response to the housing crisis could face some headwinds. The budget showed that last year, housing prices climbed by 18.7 per cent over the previous year. Housing starts and sales also went up dramatically, and that kind of froth can be expected to translate into more pressure on affordability. Indeed, the province expects the revenue haul from the property transfer tax to continue: The budget forecast $2.5-billion from that tax in this coming year, making it a prime revenue generator but also signaling the expectation that the market isn’t going to cool soon.

Part of the provincial government’s 10-year pledge to build 114,000 affordable units means the provincial housing agency, BC Housing, must be aggressive and methodical to meet the targets. That means building in some neighbourhoods not used to it.

A year ago, the agency announced plans for a 12-storey building with 140 studio apartments geared for very low-income singles at a key intersection next to the new Arbutus SkyTrain station and across from an elementary school. The size and type of building that has been proposed has not been seen in Vancouver beyond the Downtown Eastside. Plans to include supportive housing units with assistance provided for residents on site – ranging from meal programs and housekeeping to mental-health and addiction services – have some Kitsilano residents concerned.

In the latest indication of the battles ahead, a group of neighbourhood residents and businesses launched a campaign on Monday to have plans for the proposed tower changed. The rezoning application for the development is expected to come before council this spring.

“The project being proposed by BC Housing is too big, too dense and it doesn’t come with the help and services these individuals actually need,” said Karen Finnan, a spokesperson for the Kitsilano Coalition. The group suggests the site would be a better fit for housing women and children.

Meantime, Mr. Eby has confirmed to The Globe and Mail that his government has ordered a complete review of BC Housing, with a stated goal of making sure it has the financial and operational ability to carry out the province’s aggressive housing plan.