by Sal Robinson and Judy Osburn
If the L2 development at 1805 Larch had been built as it began, a MIRHPP project without any involvement by BC Housing, you wouldn’t be reading this.
Vancouver’s Moderate Income Rental Housing Pilot Program (MIRHPP) was conceived in 2017 to address the scarcity of rental homes within financial reach of moderate-income earners.
A MIRHPP apartment building would be 100% rental, with 20% of the floorspace dedicated to units renting at below market rates. Incentives for private developers included increases in height and density, parking reductions, and waiving of development fees. The extra market-rate units would be the operator’s bonus for providing some cheaper ones.
The MIRHPP guidelines set out targets for the mixture of unit types:
2 and 3 bedrooms – 35%
1 bedroom – 40%
Studio – 25%
Up to 20 projects across the city were envisioned, but in the end only 16 got past the initial planning during the 2018-2022 period of the pilot. As of October 2023, nine were under construction and none had been completed (see page 4).
One nearing completion now is a low-rise apartment block on the southwest corner of Larch Street and 2nd Avenue in Kitsilano. Its story started more than six years ago and if there’s a happy ending, Kitsilano will welcome dozens of new moderate- to middle-income residents come September.
2018: land acquisition; building proposal
In February, St. Mark’s Anglican Church at 1805 Larch Street was put on the market. The asking price for 17,700 square foot property was $11,998,000. It sold in May, reportedly for $10 million.
In September, the public was invited to provide input on Jameson Development’s proposal to erect a five-storey secured rental apartment building on the St. Mark’s site.
2019: rezoning
Neighbourhood voices were many and loud in opposition to the loss of the church, a de facto community hub, and to the imposition of an apartment block on a street of houses. The controversy was newsworthy at the time of the lengthy public hearings on the rezoning in December. The Daily Hive reported on what had been approved: “63 new secured rental homes, with 13 units at below-market rents and over 40% of the units sized for larger families. The unit mix is 22 studios, 15 one-bedroom units, 20 two-bedroom units, and six three-bedroom units.” No breakdown of the below-market rental (BMR) units was given.
A note on terminology… According to this 2023 City document, “Below-market housing is rental housing that is more affordable than market rental housing and is delivered by the private market in exchange for an increase in density.” The terms “moderate income” and “below-market rental” both refer to the units comprising 20% of the floorspace. We are using BMR unless quoting a document.
The developer proposed that 26 out of 63 units – 41% – would be 2 and 3 bedrooms; quite a selling point. That’s the mix that a majority of councillors approved, but that is not what has been built.
2020: church demolition; development permit
In its June development permit application, Metric Architecture (on behalf of Jameson) noted that the number of units had increased from 63 to 68, adding another BMR unit for a total of 14.
In October, the former St. Mark’s church fell to the wrecking ball; it put up quite a fight. The permit estimated the cost of demolition at $150,000.
On November 9, the Development Permit Board gave its okay for the project. The point was made in a paragraph headed “Significant change in unit mix from Rezoning to Development Permit Drawings” that the number of 3-bedroom moderate income units had been reduced from six to one, but that the applicant had agreed to add another for a total of two. “The final unit mix was secured in the Housing Agreement Bylaw No 12729, enacted on July 7th, 2020.” (See page 12.)
Bylaw No 12729 was “enacted early in the regulatory process” so that Jameson could apply to a senior government housing program. (More on this later.) And, “Any changes to the moderate income unit mix and/or assignment within the building, will require a new housing agreement bylaw.”
2021: housing agreement; BC Housing partnership
A building permit for the project, valued at $12.5 million, was issued at the end of September.
A by-law to authorize the amendment of a “Housing Agreement Authorized by By-law No. 12729” was on the City Council agenda for September 21, 2021, but was withdrawn. But on October 19, an amending by-law replaced the rent roll for the fourteen BMR units (page 42 of by-law) and retained the unit mix at four studios, five 1-bedrooms, three 2-bedrooms and two 3-bedrooms. (The Housing Agreement would be amended again two years later, on October 23, 2023, but unit mix wasn’t the issue. The rents from the inception of the MIRHPP had been fixed at 2017 rates and a new formula for calculating starting rents and annual increases was adopted.)
Nothing much happened on the site but something interesting did in the news: the Province got involved.
On December 16, a news release from the B.C. Attorney General, under the headline “New affordable rental homes on the way in Kitsilano,” announced that “Another affordable rental housing building will soon be available for people in Vancouver, with construction underway on a project that will offer 68 new homes in Kitsilano.”
Two years after Jameson’s application for a rezoning was approved, and more than a year after the development permit was issued, the project morphed into “a partnership between the Province through BC Housing, the City of Vancouver and Jameson Development Corp.”
“’Our government is investing in more affordable housing for people who work and live in Vancouver, and throughout B.C.,’ said David Eby, [then] Attorney General and Minister Responsible for Housing. ‘I am grateful for people like Tony [Pappajohn, of Jameson] and his family who will partner with us to get housing built quickly to respond to this ongoing affordability crisis. We need dozens of projects like this in Vancouver.’”
Pappajohn said, "As a family-owned, Vancouver-based company, we are committed to Vancouver as an affordable, desirable and inclusive city to live in. HousingHub financing means we can build these important homes sooner and make them even more affordable for our future residents."
Chiming in to drive the affordability point home was then-Mayor Kennedy Stewart: "Thanks to Vancouver's innovative moderate-income housing program and BC Housing's financing, this project is delivering 68 much-needed homes for middle-income residents like hospitality workers, seniors and artists.” Hospitality workers, seniors and artists. Hold that thought.
The Province’s role in this partnership was to provide “approximately $31.8 million in financing through the HousingHub.”
What is HousingHub? According to its website, accessed July 17, 2024, “HousingHub works with partners to support the creation of new rental housing for middle-income people in BC.” Its mandate is to “increase the supply of affordable housing for middle-income earners.” The beneficiaries of these partnerships are
middle-income households “with an average annual household income under $99,000 per year” and
developers who get “low-cost financing in exchange for building affordable housing.”
BC Housing’s announcement explained that of the studio, 1-, 2- and 3-bedroom units, 20% would be tenanted under the City of Vancouver's Below-Market Rental Housing Policy. “The remaining 80% will be tenanted under HousingHub's Provincial Rental Supply Program for middle-income households.”
It went on, “80% of units, totalling 54, will target at- or below-market level rents restricted to middle- income households within the provincial middle-income limits” while “20% of units, totalling 14, will be tenanted at moderate-income rent levels and to households earning less than $80,000 per year.”
If the Province delivered a low-interest loan of nearly $32 million, what did the City kick in so construction cost savings could be “passed on”? It waived the Development Cost Levy for the project, saving the developer $1,258,408. The City’s ongoing involvement would not be financial; it was to keep tabs on the housing agreement with Jameson on determining and tracking eligibility of moderate-income tenants for the 14 BMR units.
The significance of HousingHub’s involvement surfaced only recently, when market rent rates were made public.
Jameson Development Corp., for its part, was obligated to “pass construction cost savings on to qualified tenants.”
In honour of its new status, the project got a new address: 1807 Larch.
2022, 2023 and early 2024: Construction
2024, late spring: “L2” invites tenant applications, but not for BMR units
With construction finishing and landscaping and sidewalk restoration underway in early May, signs appeared: Register Now - L2RENTALS.CA.
Operated by Macdonald Property Management and branded “L2,” this MIRHPP building was nearly ready for tenants. The L2 website indicated a July 1 (later changed to September) occupancy for 53 units: studio, 1- and 2-bedroom. No 3-bedroom suites are advertised. A count of the units in the floorplans yields 65. Not 68.
Where did those three other homes go? Housing BC thinks they exist; their interactive map showing HousingHub projects, updated on July 17, clearly states there are 68 units to be found at 1807 Larch intended for “middle-income” tenants. The BMR units for “moderate-income” households must number among them.
Presumably a dozen BMR units were constructed, but none is available to rent through the L2 website. What started as 13 BMR homes in 2019 got expanded to 14 in 2021, and then deflated to 12 in the finished building.
Who may live there? Besides the City-termed “moderate-income“ tenants in 20% of the floorspace, what “middle-income” folks qualify for the remaining 80%, and how are these terms distinguished?
How does the City define “moderate income” for their 20%? Back in 2017 when MIRHPP got rolling, “moderate” meant households with incomes between $38,000 and $80,000. Rental rates ranged from $950 (studio) to $2000 (3-bedroom) and were calculated as 30% of the household income. The MIRHPP parameters didn’t allow for inflation, so a new set of guidelines, “Below-Market Rental Housing Program Optimization” was adopted in late 2023 to provide a formula for new maximum rental rates.
Specifically, below-market rents are to be set at a minimum of 20% below the CMHC average market rents for the city (see page 5). The 2024 BMR rates range from $1376 to $2695. If the 30% formula is applied, this means they’d be available to households making $55,040 to $107,800 (see page 4).
What, then, is the “middle income” referred to by BC Housing in its announcement restricting 80% of the units to households earning it? Here are the 2024 numbers from its glossary:
For residential units with fewer than two bedrooms: $131,950
For residential units with two or more bedrooms: $191,910
These annual incomes are 30% to 90% higher than the $99,000 referenced in HousingHub’s mandate.
It’s worth reiterating BC Housing’s assertion: “Developers must pass construction cost savings on to qualified tenants…” There’s a nuance here that did not exist before the 2021 partnership was created.
Under the MIRHPP, if 20% of the floorspace had to be “affordable” then the remaining 80% could go for whatever the market would bear. With BC Housing’s support, it appears that only qualified – i.e. “middle-income” – tenants can occupy the rest of the building and pay rents that are “at- or below-market level.” That’s where the relative affordability comes in that the Province gets to crow about in exchange for its low-interest loan.
But the rents being asked for this project raise questions about who qualifies as a middle income earner. Does BC Housing’s glossary apply to HousingHub? We tried to find out, as you’ll see below.
Thanks to the HousingHub partnership, the 80% non-BMR units at L2 cannot be offered at whatever sky-high rates the owners think they can get, as would have been the case without the provincial involvement.
Using 30% of annual income as the basis of what should be affordable to tenants, the glossary’s middle-income household pulling in $131,950 should be paying a maximum rent of $3299 for a one-bedroom unit. $4798 would be the top rent for the larger units. (Income x 30%, divided by 12.)
Macdonald Property Management L2 advertising for the 54 units available shows rents for studios ($2599 - $2750), 1-bedrooms ($2999 - $3275) and 2-bedrooms ($3999 - $4299). These rents are within the BC Housing middle income limits according to its glossary, but its glossary numbers contradict HousingHub’s mandate to serve households with much lower incomes.
Why does it matter so much?
Because if HousingHub’s $32 million loan to Jameson required the 80% non-BMR units to be “restricted to middle-income households within the provincial middle-income limits” (as the BC Housing announcement stated) and the middle-income limit is $99,000, then the rents being asked for L2 units are way too high, all of them exceeding the HousingHub limit.
Premier Eby has said, “We need dozens of projects like this in Vancouver.” But what, exactly, is “this”?
In an effort to resolve what “middle income” means, we have, over a period of months, made several visits to the constituency office of our MLA, the same David Eby who made that partnership announcement back in December 2021. We’ve watched our questions and email addresses being written down in a coil-bound notebook and been assured of follow-up. We’ve corresponded with Eby’s staff. Nobody has told us the answer.
In the meantime, are these units now in the process of being leased at market rates beyond the reach of those they were originally promised for?
Our correspondence with Macdonald Property Management has made clear that they recognize no limit other than what the market will bear for the non-BMR unit rents.
We asked them why there is no way to apply to rent a BMR unit - everything listed on the L2 website is market – and the answer was “We will lease market units first, followed by below market units.”
We asked why that was, given the urgent need for BMRs, and we asked specific questions about the BMR unit numbers and mix, as there appear to be only 12, and no 3-bedroom appears on the floorplans. The response from the property manager was a request for our contact information to be “shared with the developer who will be able to answer any questions you may have.” That was June 11. A follow-up email confirmed that contact details had been shared, but we have heard nothing.
We met with Annie Mauboules, Senior Housing Planner at the City, who explained about housing agreements, and clarified that the City has no involvement with the 80% market units. She advised that there is no requirement to tenant the BMRs first, and suggested that because of the income testing the landlord must undertake as part of their housing agreement with the City, it may take longer to fill those units.
A reason we thought of to lease the BMRs last is that the starting rents will be adjusted upward in early 2025, and that increase, compounded over time, would be worth more than a few months’ rent.
As the chronology of this MIRHPP development nears its conclusion, we are left with unanswered questions.
Does HousingHub’s partnership with Jameson really limit the market rent rates to those that hospitality workers, seniors and artists can afford?
How many below-market rental units will L2 bring to the neighbourhood? 12? 13? 14?
Which two of them, if any, are the 3-bedroom units intended for families?
If no 3-bedroom units were included, what happens to the Housing Agreement between Jameson and the City?
How would a person or household know that BMR units exist at L2 if there is no sign of them on the website?
For those “in the know,” how would they apply to live there?
For all the MIRHPP projects*, who has the responsibility to track what is built and ensure that buildings supply the BMRs that were the basis of rezonings?
[Update August 8: Some of these questions have been answered here.]
Vancouver and B.C. taxpayers deserve to know what we got for the investment of our municipal and provincial tax dollars.
And the neighbours of L2 deserve to know that their acceptance of a massive increase in density – 63 dwellings where none existed on three residential lots – is going to result in housing that is affordable in more than name.
* Another HousingHub/Jameson Development Corp./City of Vancouver partnership was announced on June 7, 2023, three years after the rezoning of 2538 Birch (as a MIRHPP development), two years after the development permit was applied for and four months after the permit was issued.
“Located at 2538 Birch St., the residential tower will stand 28 storeys, making it one of the first tall rental buildings to be developed along the Broadway Corridor. It will offer a mix of studio, one-, two- and three-bedroom homes, with 58 below market units and 200 units designed to be affordable for households with middle incomes.” HousingHub provided some $164-million in low-interest financing, and the City waived the $3.1-million Development Cost Levy.
Ravi Kahlon, Minister of Housing, commented that “this new development adds much-needed stock at both market and affordable levels.” But HousingHub is not in the business of providing market rental housing that isn’t affordable. Minister Kahlon needs the same clarification we have sought without success.
This article can be found on CityHallWatch.