Skip to main content

People stop by and view information about the development application at the Little Mountain housing project in Vancouver, B.C. on Nov. 30, 2019.Rafal Gerszak/The Globe and Mail

In an effort to tackle the affordable housing crisis that has become a visible reality in tent cities and on downtown streets, Vancouver city council last week passed a motion to devote $30-million to the problem. It’s just one of the city’s recent moves to deal with the housing crisis.

The money will be used to provide temporary housing by either leasing or purchasing units in hotels and vacant buildings or single room occupancy hotels. The city is also working on a plan to buy up privately owned SRO buildings to convert into permanent social housing, with the help of senior governments. The federal government recently announced funding of $1-billion toward a program that would help municipal governments purchase buildings for housing.

Vancouver Mayor Kennedy Stewart couldn’t be specific about the buildings that the city has its eye on, but he’s creating a list, he told The Globe and Mail.

“It all depends on what properties are available, at what price," Mr. Stewart said. “So, I have been working on a list that I’ve talked with federal and provincial governments about, but I can’t really talk about it because once somebody knows that we’ve got our eyes on their property, they drive the price up.”

He said the federal government is increasingly open to providing funding for housing since the pandemic began. He’s hoping the federal government will also invest in co-op housing, a housing choice that helped make False Creek South an affordable neighbourhood.

“That’s what I’m after with their housing money, is for them to invest in these buildings," he said. "They don’t have to get into the operating side of things, but definitely the capital or loans for refurbishment – and not just these buildings, but also co-ops. For a while, the federal government wasn’t that interested in co-ops, and I think there is a larger interest now – which is good.”

As the city prepares its plans, housing advocates remain frustrated by the example of residential buildings that have sat empty for years, such as 167-room Dunsmuir House at 500 Dunsmuir St. The Salvation Army ran the single-room occupancy building as low-income men’s housing from 1949 to 2003. Since then, the property has gone through several owners and was used briefly as a hostel for international students. It was then purchased by developer Holborn Group and in 2009 was leased by the province as interim social housing. The city contributed $500,000 for renovations. The province then closed it down and it has sat empty for the past seven years. Because it is on the city’s SRO register, it falls under the bylaw that protects SROs from being easily converted to market housing.

More than half of the 6,680 rooms that are in operation under the city register are privately owned, according to a recent city report.

Housing advocate Wendy Pedersen has heard that Dunsmuir House now needs major maintenance.

“It would be expensive to fix it up, but it’s not impossible, and it should be done,” she says.

The city says it hasn’t received a development application for the property.

The last row of homes left at the 15-acre Little Mountain site in Vancouver on June 26, 2012.John Lehmann/The Globe and Mail

Holborn also purchased the 15-acre Little Mountain property from the B.C. government in 2007. At the time, Little Mountain was one of Canada’s oldest and largest social housing communities. Despite protest from some residents, the community of 800 or so were displaced and the residential buildings were razed. Other than a 53-unit non-market building, it has sat empty ever since, raising questions as to why such a crucial public property would have been sold off. The payment structure has also been questioned, because the developer has only paid an estimated 10 per cent of the $334 million purchase price.

Holborn declined a request for an interview.

Former NDP MLA David Chudnovsky filed a Freedom of Information request in 2018, requesting the contract between Holborn and the province be released, and an adjudicator at the B.C. Office of the Information and Privacy Commissioner this month agreed. Adjudicator Celia Francis ordered Holborn to forward the documents by Nov. 5, although the company still has the option of applying to the B.C. Supreme Court for a judicial review.

Whether or not the details of the Little Mountain deal will be revealed, it will probably do little to help Vancouver’s estimated 3,600 homeless people.

Taken together, Little Mountain and Dunsmuir House had at one time provided almost 1,000 people with non-market housing. And those are only two examples. There are several other properties in the city sitting empty and undeveloped. And there are 732 SRO rooms in 10 buildings that are currently closed, according to a city report.

In order to remove an SRO unit, a developer must obtain council approval for a conversion or demolition permit. City staff might recommend one-for-one replacement of housing, or charge a fee. Conditions are negotiated on a case-by-case basis, according to City of Vancouver senior planner for affordable housing projects, Allison Dunnet. The city’s SRO report recommended increasing the fee for the loss of each room from $125,000 to $230,000. As well, city staff have recommended rent control on the unit itself, so that the rents can’t go up when a tenant vacates. Ms. Pedersen says that change is key. In recent years, investors have purchased 24 SRO buildings. Tenants in buildings that changed ownership typically saw increases.

Mr. Stewart said he couldn’t talk about Little Mountain because of legal issues surrounding the project, but he felt that the current council might be better positioned to get results.

“I feel like sometimes a change in council is good. You have different people considering the same option, and maybe if there was animosity or problems in the past, those have gone away when you have different players, so perhaps we can get some movement on that. That’s my top thing is to just try to put a dent in this housing crisis, really.”

Litigator and adjunct University of B.C professor Jason Gratl has made it his practice to represent low-income residents. In 2016, he attempted to certify a class action on behalf of residents living at the Balmoral and Regent SROs, owned by the Sahota family.

Mr. Gratl’s attempt to allow tenants the ability to mount class action suits against landlords would have been a major game changer for tenants, but the B.C. Court of Appeal ruled against it.

The two SROs were eventually expropriated by the City because they’d fallen into a level of unliveable disrepair. They are currently empty, caught up in legal proceedings.

Rather than buying up empty buildings, Mr. Gratl says the province should re-examine property tax valuation. If a developer had to pay half a million in property tax for a vacant building, they’d be more motivated to develop it.

“Instead, virtually no incentive is given to developing vacant land holdings,” he says. "So there is a dramatic gulf between the actual market value of these properties and what they are assessed at for the purpose of property taxation. … It creates a perverse incentive for owners of vacant properties to hang onto them, as a hedge against inflation.

“Frankly, I’d prefer changes to the taxation regime rather than putting public dollars in the pockets of private speculators. These are folks who’ve already benefitted from numerous tax regimes that exclude private property and vacant property from taxation. To then reward them by providing them market sale prices seems absurd.”

As for Little Mountain, he thinks the province could take possible legal action.

“I don’t see why the province doesn’t just unwind the transaction. … If there was a conditional sale, they can be held to the condition.”

Editor’s note: After this story was published, Holborn provided additional information. They said they paid the Empty Homes Tax on Dunsmuir House for 2018 but 2019 "is under review." Holborn also said that it "has had numerous conversations with local non-profit housing providers to lease out for social housing. Unfortunately, the hard costs to bring the 107-year-old building up to today’s safe and habitable standard remains substantial so a short- to medium-term lease has financial challenges." Because of the building's condition, the developer has opted to incorporate the Dunsmuir House into a redevelopment plan that includes the Bay Parkade, which it also owns.

Your house is your most valuable asset. We have a weekly Real Estate newsletter to help you stay on top of news on the housing market, mortgages, the latest closings and more. Sign up today.