by Carol Volkart
A story that began on the CityHallWatch site July 22 has morphed into a media firestorm over whether the NDP government should be helping developers build so-called affordable housing that turns out not to be affordable at all.
The original story was written by Kitsilano residents Sal Robinson and Judy Osburn, who questioned why a so-called affordable housing project in their neighbourhood that had received a $32-million low-interest loan from the government was asking up to $2,750 a month for a 393-square-foot studio and up to $4,300 for an 840-square-foot two-bedroom.
Globe & Mail columnist Kerry Gold picked up on the story and interviewed Robinson and Osburn for an Aug. 2 article on the five-storey rental project at 1807 Larch. Glacier Media’s Rob Shaw followed with a column on Aug. 6; The Vancouver Sun’s Vaughn Palmer on Aug. 7; and the CBC’s Katie DeRosa on Aug. 8, along with a Tom Davidoff interview on CBC’s The Early Edition the same day.
The Globe article lit the fuse for the ensuing media frenzy with comments from a BC Housing official about the true purpose of the HousingHub program under which the developer received that $32-million government loan. Contrary to previous government statements – including one by then-housing minister David Eby announcing the loan – it wasn’t about affordability at all. It was about supply.
“The HousingHub program is a supply-based program,” Michael Pistrin, vice-president of development for BC Housing, told the Globe. “It’s not an affordability program. The whole intent of the HousingHub was just to build more housing. And it was intended to be market [rate] rental housing.”
“It’s not supposed to be below market at all. It’s supposed to be ‘at market’ for the most part. In some cases, we can leverage – through the low-cost financing that we’re able to provide during construction – we can leverage that to force the builder to reduce the rents to slightly below market in some cases, for a percentage of the units.
“But that’s on a case-by-case basis … for the most part it was just intended to put market supply out there.”
That’s quite a shift from what NDP politicians have been saying for years, as both Shaw and Palmer pointed out.
Palmer noted that when the project was announced three years ago, Eby “touted it as a groundbreaking example of the NDP government’s commitment to ‘affordable’ housing.” A Dec. 16, 2021 news release from the housing ministry announced: “Another affordable rental housing building will soon be available for people who work and live in Vancouver.” Palmer noted the release used the terms “affordable” and “affordability” a dozen or so times.
The Kitsilano project funding was part of $2 billion in additional financing the government pumped into HousingHub in its spring 2021 budget with the promise it would build more affordable middle-income housing, Shaw explained.
Now, politicians and academics alike are asking why the government gave a big developer a break with taxpayers’ money to build more of the same expensive housing it was building anyway. Especially since more such loans are in the works. Jameson Developments, the same developer behind 1807 Larch, is also to get $165-million in low-interest financing for a 258-unit, 28 storey tower at 2528 Birch St. on Broadway.
“What types of renters can actually afford these new units?” Andy Yan, director of Simon Fraser University’s City Program, asked in the Globe story. “Aren’t they the ones already serviced by the marketplace?”
He said if taxpayers are subsidizing construction in the name of supply, the province could have demanded a share of the equity in return. “Why are taxpayers subsidizing market-rate development, and are they getting value for their money?”
Conservative MLA Elenore Sturko also questioned what taxpayers are getting for their low-cost loans. As quoted in Shaw’s column, she said: “The only people getting ahead in this equation is the developer.”
“Time and again this is a government that has promised to make housing affordable, but what that means is that you actually need to reduce the cost of it… and what we see here is that we haven’t reduced the cost.”
B.C. Green Party leader Sonia Furstenau called the low-interest loan an “infuriating” misuse of taxpayers’ dollars, according to CBC’s story by Katie DeRosa. "People who need housing are not the people who can afford $4,200 a month in rent."
Tom Davidoff, an economist with the UBC Sauder School of Business, director of the real estate industry-funded Centre for Urban Economics and Real Estate, and advisor for the province’s current housing policies, told CBC’s The Early Edition that 1807 Larch is a lesson that it may be too expensive to build new affordable housing in prime locations.
“I think what this indicates is that maybe brand new buildings in an A-plus location isn’t where you want to put your affordable units because what people see is even if you spend a lot of money to subsidize for affordability, what you get really is not all that affordable."
Davidoff did not respond directly when asked about the disconnect between the government touting affordability and BC Housing’s position that supply, not affordability, was the point of the program 1807 Larch was built under.
“As a lesson moving forward, I think the province has done an excellent job pushing for more housing, more market-rate housing,” he replied. “I think more thought probably needs to be given to how do you deliver affordability to the people who can’t afford market housing."
Asked how the current controversy reflects on the NDP as it ramps up for an election, Davidoff referred to new housing legislation passed last fall that removed zoning powers from local governments and imposed massive new levels of density on all municipalities with more than 5,000 people. Allowing widespread multiple-family housing will cut down the lineups of people – some quite affluent – chasing after it, and eventually lead to lower prices, he said.
“Personally I’m delighted at the push they’ve made to cram – if you will – density down municipalities’ throats in the sense that if you have land-use decisions made at a local level, it’s very focused on ‘Not In My Back Yard,’” said Davidoff, who was among the external experts consulted by the NDP when it drew up a list of “naughty” municipalities considered not doing enough to build new housing.
With the October 19 provincial election approaching, 1807 Larch will be a particularly hot topic in Vancouver-Point Grey, where the project is located. Not only does Premier David Eby represent the riding, but it was in his role as housing minister in 2021 that he announced the taxpayer-funded support that would ensure its “affordability.”
It’s a good jumping-off point for voters – not just in Eby’s riding, but around the province – to examine the NDP’s housing legislation and policies. How successful have they been in encouraging affordability and livable, thriving neighbourhoods? And what, if anything, would candidates for other parties do differently?
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