Good morning! Wendy Cox in Vancouver this morning.
In two years, the British Columbia housing agency has spent almost half a billion dollars on emergency purchases of hotels to house the homeless.
Spending money on an emergency is always heavy: the chances of making unwise choices and paying more than necessary are always high. So it was probably with some relief that the minister of housing in British Columbia received the latest report from Auditor General Michael Pickup. Its report concluded that the $221 million spent on nine hotels met the standards of good value for money. He found that the price was 8% below their assessed values. The province also spent $200 million on other hotel purchases during this period, but these were not part of the audit.
Mr Pickup concluded there was no sign that the usual requirements had been circumvented in the purchases, which he said involved “considerable public expenditure” and had been decided very quickly during a crisis.
The Howard Johnson Hotel on Granville Street in downtown Vancouver cost $56.6 million and the Patricia Hotel in the Downtown Eastside cost $64.4 million, both well above the normal ceiling of $35 million set for such purchases by Treasury Board. Both have parking lots next to them which BC Housing said could be developed at the time. They were part of a total of $403 million spent over the past two years to buy hotels, motels, shelters and other buildings that were part of the emergency response to the pandemic and to clean up the homeless camps in Vancouver and Victoria.
Yet Housing Minister David Eby told journalist Frances Bula in an interview that he would rather not have to do things that way again.
“The province needs to come out of the homelessness crisis response,” Eby said.
He said the province was working on long-term solutions, including a new fund to help nonprofit groups buy apartment buildings to steer them away from the speculative market. In the 2022-23 provincial budget, announced last week, the provincial government committed $166 million over the next three years as part of its 10-year affordable housing plan.
But Mr Eby’s idea of a less harassed response to the housing crisis could face headwinds. The budget showed that last year housing prices rose 18.7% from the previous year. Housing starts and home sales have also increased dramatically, and that kind of foam can be expected to translate into increased pressure on affordability. Indeed, the province expects property transfer tax revenues to continue: the budget projects $2.5 billion of this tax over the coming year, making it a generator leading earnings, but also signals the expectation that the market is not going to cool down soon.
As part of the provincial government’s 10-year commitment to build 114,000 affordable homes, the provincial housing agency, BC Housing, must be aggressive and methodical to meet the targets. It means building in certain neighborhoods that are not used to it.
A year ago, the agency announced plans for a 12-story building with 140 studio apartments aimed at very low-income singles at a key intersection next to the new Arbutus SkyTrain station and opposite a primary school. The size and type of building that was proposed has not been seen in Vancouver beyond the Downtown Eastside. Plans to include supportive housing with assistance provided to residents on-site — ranging from meal and housekeeping programs to mental health and addictions services — have some Kitsilano residents concerned.
In the latest indication of the battles to come, a group of neighborhood residents and businesses launched a campaign on Monday to have the plans for the proposed tower changed. The rezoning application for the development is expected to go to council this spring.
“BC Housing’s proposed project is too big, too dense and does not provide the help and services these people really need,” said Karen Finnan, spokesperson for the Kitsilano Coalition. The group suggests that the site would be better suited to housing women and children.
Meanwhile, Mr Eby has confirmed to The Globe and Mail that his government has ordered a comprehensive review of BC Housing, with the stated aim of ensuring it has the financial and operational capacity to carry out the housing plan aggressive from the province.