The B.C. government has pledged $500 million to help non-profit housing organizations purchase affordable rental properties before they can be scooped up by “speculators and profiteers.”
Premier David Eby said the province’s Rental Protection Fund will provide security and stability to thousands of seniors and low-income tenants, while pushing back against the trend of international corporations buying affordable properties and redeveloping them into high-end housing.
“In too many cases, this predatory model leads to evictions and rent hikes,” Eby said at a news conference Thursday.
Tenants’ advocacy groups have been urging the government to protect rental buildings from those corporate investors for years, warning that affordable units are being transformed at an alarming pace in the pursuit of profits.
B.C.’s Ministry of Housing said the new fund will be operational in “the coming months,” and financed before the end of March.
It will provide one-time capital grants to non-profits looking to buy affordable rentals and co-op housing, but officials said those organizations will also be supported in obtaining private financing to minimize the government’s involvement long-term.
The Co-operative Housing Federation called Thursday’s announcement “ground-breaking,” and said other provinces should follow suit.
“Slowing the loss of affordable rental homes by taking them out of the market and protecting them forever in the community housing sector will make life much more affordable for renters everywhere in B.C.,” CEO Thom Armstrong said in a statement.
“This is the best thing the province could have done to maximize the net impact of the affordable new supply it is already investing in.”
Yet there are questions about the plan. B.C. Liberal Housing critic Karin Kirkpatrick told CTV News many of the apartments that would be up for sale, are older.
In addition. the non-profit organizations running the buildings would need to do so on a break-even basis.
Kirkpatrick wondered where funding would come from in the case of an emergency.
“What happens if an elevator breaks? What happens if there’s some significant deficiencies in the building?” she asked.
The building used for the photo opportunity located at 9380 Cardston Court in Burnaby was purchased by the province for more than $100 million. The city of Burnaby also put in money and it is run by the non-profit Community Land Trust.
In the future, non-profits would own what they buy using the fund.
“When a non-profit has that equity in a building, they have the ability to leverage that over time to buy other buildings without further assistance,” said Eby.
While that may be the hope, Kirkpatrick also wondered if the new funding would lead to bidding wars.
“Anytime you’re going to bring money into the market and you’re competing for a finite number of properties, it is going to drive the market, it is going to make it more competitive,” she argued.
Eby insisted many building owners have built relationships with renters and – as was the case with Cardston Court – may want to find a non-profit to work with.
“Real estate investment trusts, they have a business model too. They see the investment upside and they’re working within those constraints as well, so it’s not like they’re going to pay unlimited amounts for these,” added Eby.
Non-profits are applauding the move.
Margaret Pfoh, CEO of the Aboriginal Housing Management Association welcomed the move.
“Activities and investments like this rental protection fund are one part of the critical solutions that need to be implemented to mitigate the ongoing crisis,” said Pfoh.
Eby says his government may also bring in rules to give charitable organizations the first right of refusal when one of these buildings goes up for sale.
Kirkpatrick admitted that may be needed. She also wondered if $500 million was enough to make an impact. She pointed out the cost of the building used for the press conference would take up nearly a fifth of the funding announced Thursday.
Source: CTV News