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Vancouver tests out what many hope will be a non-profit model for building low-cost housing

May 10th, 2013 · 7 Comments

After being stung by four years of criticism about its giveaways to developers to create rental, Vision Vancouver politicians (oops, of course, I should say, “staff”) have decided to test a new model for building rental apartments.

The city will give four pieces of land to a consortium of non-profit housing groups and the B.C. Co-op Housing Federation to develop 350 units that the groups promise will offer a substantial number of units at below-market rents — some way below and others a little below.

They’ll be able to do that by saving money on 1. land 2. marketing 3. developer profit. But the plan is also to cross-subsidize within the 350 units by renting out the ones likely to get the highest price (on a piece of property in the River District development that faces the river — a gorgeous site; I’ve seen it) at market rates, leasing out some commercial space at the site on Kingsway for going-market rates, and then using that money as well to lower the rents on other units.

If it works, the Vision council is definitely planning to expand the concept. Thom Armstrong, from the co-op federation, says non-profits would likely consider putting in land too if it the model proves to work.

I just did the preliminary story on this. I’m waiting to hear from critics of various stripes if they see problems with this. I know the NPA will be concerned about the city dedicating so many of its land assets to housing. (To this, Councillor Geoff Meggs has pointed out that this is a return to the model of the 1970s, used in south False Creek.)

The model also looks to me like what the current thinkers in COPE wanted to introduce as a housing solution. But I await commentary on the details.

 

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  • Gordon

    Whatever way it is achieved this program involves taking a City asset which could be used for another purpose and using it for this purpose. The other purpose might be to generate money for schools or mental health clinics or playing fields. Who is to benefit from the below market housing created by this plan? Help for those in poverty and for the mentally ill I support. Is this to help $70,000 per year firefighters and teachers? If so I think it is a twisted allocation of resources.

  • Yuri Artibise

    Gordon,

    The Community Housing Land Trust will be building a mix of housing types, including:

    * 48 units of housing for people with mental illness
    * 114 units of housing for older tenants
    * 111 units for for low-income families
    * 82 unites for moderte income families

    So only 82 of the 355 units announced will be built for moderate income households, who will be paying market rate housing charges. This is less than 25% of the total. The revenue generated from these units will help increase the affordability in the other units.

    A more detailed break down can be found in the CHF BC media release at : http://www.chf.bc.ca/news/media-room

  • Bill Lee

    Don’t know the exact location, many press accounts say “southeast Vancouver”–Madame Bula saying one is the River District development.

    Souunds like moving the poor to the edges of town to me.
    Is this the sanitizing of DTES and the 955 Hastings for the more wealthy who want to live “right downtown” for a few years or so?

    That southeast area is a “food desert” for those without a car.

    And 75% of market rents can be very high in this city, too high to be affordable on, say $1500 a month income ($18,000 net, perhaps $22,000 gross).

    Concert Properties, the City Land and Union Funds, run badly by Jack Poole and David Podmore and a variety of the bigger unions then, had similar goals. Between 1989 and 1999 it built 80% of the rental housing constructed in Vancouver.

    Maybe things will change after 14 May election, but it is probably designed to be acceptable to any provincial government run by an Edward VIII who said “Something must be done” ( or equally ineffectual “Something should be done”)

  • Brian

    Good points, Bill. Social housing is best when it is part of a good community, especially when tenants don’t have to leave their community to live in it.

    One correction though, the article says some spots will be 75% less than market. This means is 25% of market price. That is a significant reduction. No word on how many units will be so subsidized that much though. Hopefully it will be significant.

  • Lewis N. Villegas

    Lets look at the innovation side of this in the pro forma:

    1. land
    2. marketing
    3. developer profit

    Land. As a round number: $1,000,000 per lot (its lower than that today). What’s the housing type? If it is human-scale—social housing is best when it is part of a good nieghbourhood and we seem to have forgotten how to do that—then its 80 units/acre and 6/lots per acre.

    1. Savings in Land = 1,000,000/80/6=$2,083.33 per unit.

    Bob Rennie would be the one to talk to #2.

    3. Developer profit. Between $1M and $1.2M per lot (I’m using the model where the project sells back the land to itself, then charges 20%).

    3. Savings Profit=$2,500 per unit.

    I’m looking for a formula that does this, but then turns around and innovates around building construction and building type.

    For example, 4-storey frame with tilt-up concrete party walls; no underground parking; no elevators; 264 sq. ft. hi-end glazing; standing seam metal roofing high R-insulation; $5,000 kitchen; $10,000 1.5-baths; 2 coats of paint and laminate flooring; electrical heating.

    What I’m looking for is a new “shell” that gets the balance right between front-end investment and life cycle of the building costs.

    Maintenance and repairs are sequel to sticker shock.

  • Mike

    …but I don’t want to live in a co-op. Been there, done that, not worth the invasion of personal privacy, the harrassing idiots who feel they are somehow slightly above me and can boss me around, etc. Co-ops suck.

  • Bill Lee

    Sounds like pushing the poor to the
    edges of the city. And the Riverside
    is certainly the edge.

    “… The findings are contained in a new book: “Confronting Suburban Poverty in America,” which examines this trend in the 100 largest metropolitan areas across the country, including the Seattle metro area, where 3.5 million people are spread across King, Snohomish and Pierce counties.
    Using the federal benchmark for poverty, which for a family of four in 2010 was an annual income of $22,300, Brookings researchers found that two out of three Seattle-metro-area residents who were at or below the poverty line were living in the suburbs.
    In fact, the number of poor people in the suburbs increased by 80 percent between 2000 and 2011 — with much of that growth concentrated in the cities south of Seattle.
    [ more ]

    Linkname: Poverty hits home in local suburbs like S. King County | Seattle Times Newspaper
    URL: http://seattletimes.com/text/2021019301.html
    Date: Tue, 21 May 2013 00:24:07 GMT
    size: 177 lines

    The book: brookings.edu/research/books/2013/confrontingsuburbanpovertyinamerica