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The thousands of people who live in Vancouver’s 3,700 co-op apartments, a form of affordable housing popularized in the 1970s, are going to be offered a new deal by the city after years of unhappy negotiations over renewing their leases for the first time since they were built.

City officials say that increases in lease rates will be in a range that people say they can afford. Co-ops will get substantially discounted lease rates compared to current market rents because they’ll be based on Vancouver residents’ median income instead of general rent rates in the city.

And city officials insist that, whatever happens, current tenants will not find themselves forced to move nor will the city land they’re all sitting on ever be sold.

That comes after protracted disagreements between the two sides over what the new lease rates should be, which resulted in three co-ops refusing a city offer two years ago. Residents feared that many co-op members, especially lower-income ones, would have to leave their long-term homes because they wouldn't be able to afford new, higher rents dictated by the city's new lease rates after current agreements expired.

"We’re acutely aware this has caused a lot of concern,” said Chris Baas, a manager in the city’s business-advisory group, as he outlined new proposals that will be made to local co-op boards.

Mr. Baas and others said the new proposal gives co-op boards more autonomy than in previous deals to run the building and choose tenants, but the city would still be asking for some form of monitoring to make sure that any reduction in lease costs go to those who can benefit the most.

“We want to make sure people using public land have demonstrated need,” said Gracen Chungath, the director of operations in the city’s community-services department.

Co-ops proliferated in the 1970s as a form of affordable housing that was managed by its residents, rather than a housing non-profit or government agency. It still included a mix of household-income levels, with those in the top category paying near market rents, which was supposed to help subsidize poorer households that paid much lower rents for similar units.

The general principle, which the city says it wants to keep in place, is that no one in the co-op pays more than 30 per cent of their gross income for rent.

The city staff painted a scenario in which co-ops might be asked to pay lease rates that are about a third of what the market rate would be.

Mr. Baas said the city would also want to ensure that any new tenants accepted don’t exceed a certain level of household income.

Five Vancouver co-ops are in the south False Creek neighbourhood that was designed as a progressive experiment in affordable housing in the central city decades ago. There are 52 others spread around the city, including many in Champlain Heights in the southeast corner.

The city’s co-op proposal doesn’t address the many other, also contentious, leasehold negotiations for other types of housing in south False Creek that are part of the community that was created in the 1970s.

But it does indicate city managers are showing some willingness to re-think past positions, say co-op representatives.

“It’s a serious report. They obviously worked on the issues,” said Nancy Hannum, who lives in the Alder Bay Co-op and chairs a committee of co-op members in False Creek.

She said there’s still a lot of math calculation and analysis needed for people to understand what the proposal means in terms of future rents and what the limits might be on being able to subsidize lower-income households.

And, she said, co-op residents aren’t stuck on a fixed set of demands.

“We’re certainly willing to negotiate.”

The city’s proposal does include one option that everyone said is a last choice: having the co-op cease to run the building and getting a non-profit housing organization to do it instead.

“This is our least preferred scenario,” said Sandra Singh, manager of the city’s arts, culture and community-services department.