A rental project at 1807 Larch St., in Vancouver's Kitsilano neighbourhood.Sal Robinson/Supplied
New, so-called affordable, housing built with public funds is neither affordable nor livable, critics say. The rents are too high and the units are too small.
They take issue with the recently completed 68-unit apartment building at 1807 Larch St., in Vancouver, which was given development fee waivers and extra density allowances by the city and financing by the province in exchange for affordable housing. But when the rents were posted for the completed building in the spring, they revealed highly unaffordable market-rate rents at nearly $7 a square foot – about $2,700 a month for a 393-square-foot studio. By comparison, downtown rents in a new building are around $5.50 a square foot.
Photos of two of the below-market units at the 68-unit apartment building at 1807 Larch St., in Vancouver. They are on the alley, at ground level.Sal Robinson
In December, 2021, then Housing Minister David Eby had announced $2-billion in low-interest rate construction financing through a program called HousingHub, to help middle-income households find affordable housing, such as the project at 1807 Larch St. That building received $31.8-million in financing.
But nobody expected that 54 of the 68 units would be at the ultra-high end of the market rate, especially when the province had announced that middle-income affordability was the goal. A BC Housing official explained to the Globe and Mail recently that the intention had never been affordability, but more market-rate housing supply.
“That portion does seem awfully high,” said Housing Minister Ravi Kahlon, in response to the posted market rents.
Mr. Khalon said he wanted to add details around the HousingHub loans, after receiving blowback from the public following a story in The Globe and Mail on the Larch Street project. He said that HousingHub has recently been rolled into a new program called BC Builds, which will be able to offer deeper rental subsidies through publicly owned land. And the low-interest rate loans on offer through HousingHub were not that much lower than the going rate, he said. The $2-billion allocated to the program has not yet been spent, he said. His staff sent a list of 61 HousingHub projects either completed or under way throughout the province.
“When you’re looking at supporting a private project to try to get some more affordable units on it, you know, you have to make sure that those that are bringing their land in and their project forward, that they can get their return,” said Mr. Kahlon. “And this is why we’ve kind of moved away from this [HousingHub] project, because we think we can get deeper affordability through government lands, through First Nations lands. And we never had that tool in 2018 available to us, but we do now.”
Mr. Kahlon preferred to focus on the 14 below-market-rate units in the building that were required through the city of Vancouver’s Moderate Income Rental Housing Pilot Program, which offered the developer a waiver on city fees as well as extra density in exchange for 100 per cent rental with 20 per cent of the floor area devoted to below-market units. Despite those incentives, at some point the developer applied to the province for the lower-rate financing as well.
“The city has given additional density, and we provide the low-cost financing,” said Mr. Kahlon. “And that allows for the 14 affordable unit components to this. And I think it’s important to note, without the interventions, this property could have still proceeded at strata or any other form, or it could not have been built at all. And so, for us to get an opportunity to be able to get units that are much more affordable than what the market is right now, at no additional cost is a net benefit,” said Mr. Kahlon. “In the end that really is no cost to government. We’ve got 14 affordable housing units that we would not have had if it went straight to market.”
The was some controversy when the city rezoned an old church at the corner of Larch and West 2nd Avenue in 2019 because it had been used as a daycare and also provided services for homeless people. As part of the city’s MIRHP program, all units were secured for rental on title for 60 years and included three-bedroom units for families.
A development permit was issued in September, 2021. Three months later, the province announced the low-interest rate financing for the developer, Jameson Development. The same developer qualified for a $164 million low-interest rate HousingHub loan for its 2538 Birch St. project, a 258-unit, 28-storey rental tower that is under construction.
The city’s approval process for the 14 below-market units on Larch didn’t require provincial financing. That was obtained by the developer separately, according to the city.
“However, it’s important to note there have been significant changes to the market since this project was approved,” said Doug Smith, deputy general manager, planning, urban design and sustainability for the city.
Originally, the city had set the below-market rents for the 14 units at $950 for a studio and $1,200 for a one-bedroom unit. A two-bedroom unit would rent at $1,600 and a three-bedroom at $2,000. The idea was to serve incomes between $38,000 and $80,000.
Like the market rate rents, the new below-market rents are also much higher, from $1,223 for a studio to $2,395 for a three-bedroom, serving incomes from $58,704 to $114,960, according to the website for the apartment building.
Real estate developer and former architect Michael Geller, who worked at Canada Mortgage and Housing Corporation, questions the benefit that the public is getting on units that are used to justify the development of high-density towers throughout the Broadway Plan area.
“When you see how the rents have increased in these projects from the day they are approved by the city and announced by the province, to the day they actually start renting, that immediately signals to other developers that they don’t need to worry about committing to these rather low rent levels because you will be able to adjust them later on if you have to – and I am speaking from first-hand experience,” said Mr. Geller.
“The below-market units are the raison d’être for approving all these towers.”
His other concern is the livability of the units. He’s studied the floor plans of the new building on Larch.
“People are so seduced by the thought of getting these 20 per cent below market units, they aren’t even looking at the plans. The bedrooms at the Larch project are so small there isn’t even room to walk around the bed.”
Former city planner Sandy James takes issue with some of the below-market units located at the basement level, facing an alley.
“I mean, really, why wouldn’t you take the same amount of money, find a site and build a completely affordable project?” she says, referring to the province’s $31.8-million construction loan.
“In this project, there are apartments that are below grade functioning as apartments for the working class, and there are apartments on higher storeys that are airy, that are for the rich. They are not equitable.”