BC Builds: middle-income public housing
On public land
Press release and backgrounders
Yesterday BC announced a BC Builds program to provide loans and grants for non-profit housing projects aimed at middle-income households. There’s a revolving fund of $2B to provide construction loans, which should fund the construction of about 4000 apartments at a time, and about $1B in grants.
The land where this housing will be built is land owned by governments or non-profits that’s under-used. Explanation by a Redditor with experience in affordable housing:
Government: Chances are, your municipality owns actually quite a bit of land that in general isn't used. A municipality will lease this to a non-profit organization to build affordable housing projects (generally 99 years for $1). Often this will have a covenant on the land and as part of the agreement (i.e. You must operate this as non-profit housing, you can't sell the units for a profit). Provincial and federal land is a bit more complicated, but I can get into that if you'd like. Most of the land that would be used under this specific program would be municipal.
Community/Non-profit: This is for these groups that are looking to utilize the land that they own. You'll see this often in communities outside of Vancouver. An example would be a church that has a massive parking lot and random patch of trees and stuff. They're not really using all of that land. They can work with the municipality to subdivide, rezone, then use this funding stream to develop affordable housing (in general with the local non-profit housing group).
Underused land: Think of some random small community hall built in the 60's when the area it's in wasn't really facing any densification. It's small, on a big plot of land, with a big parking lot. In this case they'd tear down the hall, rebuild it with housing on top and maybe a couple other community amenities. Now before anyone says that they'd tear down the hall and just build housing, I can tell you that going through the process of removing a community amenity like this sets off so many red flags in your municipal/BC Housing application process, I'd say the chances of this happening are pretty much zero unless it's simply not used by the community.
The program is intended to speed up the planning and approval process. The aim is to start the first projects this year, with occupancy in 2026.
The program also works with municipalities, landowners, residential builders and housing operators to move projects from concept to construction within 12 to 18 months, compared to the current average of three to five years. This will be accomplished by streamlining municipal development processes and by working with landowners, municipalities and residential builders to remove barriers.
In other words, the municipal government has to be on board for the project to happen, and it needs to happen quickly.
Why target middle-income households? The province provides support to people near the bottom of the housing ladder, and is also making policy changes to allow a lot of market housing to be built (more salient for people closer to the top of the ladder). All housing helps, because new housing frees up older housing: 100 households living in a new building that opens up, whether market or non-market, means 100 households that are no longer competing with everyone else for the limited supply of existing housing. But it’s helpful to have a program that benefits middle-income households directly.
At the announcement, housing minister Ravi Kahlon talked about learning from public housing in Vienna and Singapore.
We’re using government lands and government financing to build housing for teachers, for nurses, for construction workers, so they can afford to stay in their communities in which they work.
The affordability criteria for a BC Builds project look like this:
20% of the apartments must be no more than 80% of market rents. (I’m guessing that this means no more than 80% of the CMHC average rent for the municipality, which is often quite a bit lower than asking rents.)
The remaining apartments are for households within BC Housing’s Middle Income Limits, which is from the 50th to the 75th percentile of household incomes. There’s separate ranges for couples without children (from about $85,000 to $130,000) and families with children ($135,000 to $190,000), and the exact ranges will depend on the area. They can cross-subsidize the 20% below-market apartments.
Besides the cross-subsidy, and the use of land owned by governments or non-profits, BC Builds can contribute one-time grants of up to $225,000 per apartment, in order to make sure that the value of the new building (based on the stream of future rents) covers the cost of construction and land.
The press release includes three examples: an 18-storey mass timber building in the city of North Vancouver with 180 apartments, a six-storey wood-frame building in Duncan with 200 apartments, and a four-storey wood-frame building in Gibsons with 33 apartments. There’s also a list of 20 partnership opportunities with municipal governments (including the city of Vancouver); non-profits including churches, UBC, and UVic; and First Nations.
More
Previously: non-market housing
Kenneth Chan, Daily Hive. BC Builds: Premier Eby announces $3 billion middle-income housing program
Chad Pawson, CBC News: B.C. to fund new income-tested rental housing on public land.
Katie DeRosa and Dan Fumano, Vancouver Sun: B.C. Builds plan promises housing for middle-income renters.
So $3B for 4000 is $750K per house. Does it really cost that to build these days, basic houses presumably with limited variety? Is that just for the construction, or is the "public land" costing money besides money to service it with pipes?