The costly waterfront social housing will remain in SE False Creek
The City of Vancouver has filed yet another late distribution report on the social housing at the Olympic Athlete's Village. Here are the high level recommendations of the report:
- All 250 units will remain as property of the City of Vancouver
- 50% of the units will remain as "core-need" full social housing (1/2 originally promised, and a fraction of the number promised by the COPE/Vision council in 2005). Renters will pay below market rents based on their incomes
- the remaining approximately 50% of the units to be occupied by households paying market rents which reflects the design, size and location of the units; with the tenants of the market rent units to be limited to households with a monthly income less than or equal to five times the market rent; with the operators focusing as much as possible on renting to tenants whose work is in Vancouver with an emphasis on those serving citizens of Vancouver in the areas of health care and public safety
- Council approve an increase in the City’s permanent investment in the Olympic Village affordable housing of up to $32.1 million
The bottom line is Vancouver will be paying another $32.1 million for these social housing units, half of the units promised will remain as social housing, the other half will be provided as "market" units. Preferential treatment will be given to people who work in health care (doctors, nurses, hospital staff) and police, fire or ambulance workers.
Market rental units in the False Creek area are some of the most expensive in the city. A 550-sq ft 1-bed/1-bath unit rents for about $1300 per month. Well-appointed 3-bedroom units are on the market for up to $4500 per month and up. The social housing units are new, but plain. The location is just steps away from a new London Drugs, a Save On Foods, plus a government liquor store and the Mark James brew pub. It will be interesting to see what the final rents will be for these new units – which range from one to four bedrooms. The staff report is suggesting prices as follows:
- 1-bedroom (640 sq ft) = $1601
- 2-bedroom (906 sq ft) = $1902
- 3-bedroom (1223 sq ft) = $2096
- 4-bedroom (1480 sq ft) = $2368
Based upon maximum 20% household income on rent, a $96,000 income would be allowed a one-bedroom, and a $142,000 annual household income would be allowed to rent the four-bedroom. As CityCaucus.com pointed out last year, 345 members of the Vancouver police force earn over $100,000 per year, easily allowing them to get one of the 2, 3 or 4-bedroom units depending on where their salary tops out.
Other options listed on page 11 of the report are 3 b): Sale of the Buildings to an Institutional Investor(s) as Rental Buildings, and 3 c): Immediate Strata Sales of the Units. Where the City gets the money to pay for the social housing units is spelled out in the report, and it looks like all of Vancouver is kicking in for it.
The report states that the City must...
"commit $32.1 million in additional City investment to ensure that approximately 50% of the units can accommodate core-need households. The source of funding would be from a combination of: SEFC Community Amenity Contributions and Development Cost Levies; Affordable Housing Reserve; reallocation of City Wide Affordable Housing DCL’s; and reallocation of 2009-2011 and prior years’ Capital Budgets and Plan."
That $32 million is on top of the $30 million already sunk into SEFC by the Federal government through VANOC. Of the bills still to be paid by the City on the Athlete's Village project, the remaining will be paid off through a mortgage.
In order to provide the $32 million contribution it appears that the City will be drawing down from funds from around town in order to keep their promise of waterfront social housing. $4 million will be taken from Vancouver's $9.8 million Affordable Housing Reserve. That's over 40% of that fund just to pay for social housing units in Southeast False Creek.
Also, $7 million is being reallocated from City Wide Affordable Housing DCLs. That's money that would have been spent throughout the rest of the city, poured into False Creek. $14.3 million from the City's Capital Budget will be also used to pay for the social housing.
Looking at option "3 b" (selling for rental) the City takes a big bath. However, if the city chose to sell the units, which many have recommended (option "3 c"), Vancouver would net between $28 & $68 million! Just think of the opportunities for building social housing in other parts of the city with that fund.
Vision Vancouver simply will not stare down critics. As we've repeatedly stated, populist politicians like to make the easy decisions that in the end cost you most. Vision's decision to commit to waterfront social housing, instead of taking profits to build even more units across the city, is going to cost us millions.