When the federal government stopped putting money into social housing nearly 20 years ago, it ended $1-billion-a-year worth of new projects and contributed to the rise of homelessness.
Now, a second wave of that 1994 shift is about to hit, as the operating money that Ottawa supplied since then for its existing projects starts to wind down because of expiring time-limited agreements.
That has B.C. housing groups and cities alarmed, as they contemplate a future where hundreds of subsidized buildings in the province may be forced to increase rents or sell their properties.
What they’re pushing for instead is to have the federal government maintain the $100-million a year in operating money it puts into housing.
“It’s not going to cost any of us any more money to maintain that allocation,” said Karen Stone, executive director at the B.C. Non-Profit Housing Association.
Her organization estimates about half of the 55,000 units of housing run by non-profit groups (which is not all of the subsidized housing in the province) are at risk as agreements expire in the next decade.
If the federal government did nothing more than stick to the $1.5-billion it gives out nationally, even when agreements expire, that money could be used to help some of the smaller building operators – the ones predicted to be in trouble when subsidies disappear – to maintain low rents. The rest of the allocation, she said, could be used to add to the country’s social-housing stock.
For people living in the province’s 14,500 co-op housing units, the news is almost as bad. About a third will stop receiving subsidies between now and 2020, says Thom Armstrong, executive director of the Co-op Housing Federation of B.C.
“It’s this big tsunami. Households that count now on this to make their rents affordable will be hit hard,” he said. “It’s huge, absolutely huge.”
Along with the housing groups, Metro Vancouver and municipalities like Vancouver, Burnaby and Surrey – those with the oldest social-housing buildings that are likely to be hit first – are all concerned about the potential loss of units or increased rents.
About 90,000 units of housing get some form of provincial or federal subsidy in the province, out of B.C.’s total 1.9-million households.
Most social-housing projects built in the 1950s to the 1980s came with an agreement from the federal government that it would provide a subsidy to the project to enable operators to keep rents low.
The idea was that the subsidy would be about equivalent to mortgage payments, so that when the mortgage was paid off in 30 or 40 years, the building operators would still be able to charge the same low rents even without the federal subsidy.
It was envisioned as the kind of benefit that many retired people enjoy, as their living costs are suddenly lowered because they have paid off their mortgages.
But that didn’t work out in many cases.
Many housing operators are facing a situation where the subsidy they are providing for renters is higher than the current mortgage payment. So they will still be behind, even when the building is paid off.
As well, the original federal agreements often didn’t allow operators to build up reserves or allocate enough money for maintenance.
So those operators are also facing big bills for repairs once the mortgages are paid off.
The situation is especially dire for the small community groups – often ethnic associations or service organizations – that put up only one building and don’t have a big portfolio of land and units they can manouevre.
Larger groups are likely going to do better, Ms. Stone said. They can develop some of their land or use other strategies to keep rents low.
Housing groups have turned to some innovative ideas in recent years to generate money to help keep rents low, such as renting space for cellphone antennas on their roofs.
But that’s not going to be enough to replace millions of dollars a year in federal money that continued to maintain a pool of low-cost housing in the country.