Crunch time ahead for Metro’s rental housing empire

No cash being set aside to rebuild affordable units.

Metro Vancouver Housing properties in the Burnaby to Coquitlam area.

Metro Vancouver Housing properties in the Burnaby to Coquitlam area.

Metro Vancouver is headed for tough decisions on whether the regional district eventually rebuilds its aging collection of affordable housing complexes or decommissions them.

The issue arose at a Metro council-of-councils meeting Tuesday in Surrey, where White Rock Mayor Wayne Baldwin noted there is no fund in place to cover the long-term capital replacement costs of Metro’s more than 50 rental housing complexes.

“They will have to be replaced,” he said. “So we’re going to have to come up with the money somewhere.”

Although Baldwin suggested Metro try to “upload” responsibility for affordable housing back to the province, he noted Victoria is “quite happy to have us do the job.”

Nor, he said, is it likely the region could tear down old complexes and sell the land or put it to other uses.

“I suspect that would be politically unpalatable,” Baldwin said. “There would be a public outcry if we did.”

The regional district currently owns and manages more than 3,600 units, some of which charge market rents that in turn help subsidize other units reserved for low-income tenants who qualify for supplements from B.C. Housing.

More than 10,000 residents are housed in Metro Vancouver Housing complexes.

“It is not a municipal responsibility,” Baldwin said “Somehow we got into the business and we’ve never gotten out of it. In fact, we’ve got into it more and more.”

The housing arm of Metro costs $35 million a year to operate and maintain, but that’s entirely covered through rents and B.C. Housing supplements – only housing policy and planning functions at the regional district are paid out of taxes.

Where a gap exists is in setting capital aside to replace the buildings, which were built decades ago with federal subsidies.

A planned redevelopment of Metro’s Heather Place townhouse complex in Vancouver near Vancouver General Hospital may offer one model for rebuilding, particularly in areas with high real estate values.

Its replacement will be a mixed-use project built by a private developer with market housing where bonus densities have been offered in exchange for the inclusion of affordable housing units, said Surrey Coun. Judy Villeneuve, who sits on Metro’s housing committee.

“There is an aging stock,” she said. “We have to look creatively at how we can ensure that we hold that stock.”

Villeneuve noted Metro Vancouver and other local partners are lobbying hard for Ottawa to develop a national housing strategy with new incentives to build co-op and affordable housing.

“It’s falling on deaf ears,” she said.

Homelessness emerged as a major problem after the federal government stopped building new affordable housing projects in the late 1980s and early 1990s, Villeneuve said.

“If that could be reversed, the cost of dealing with people who are homeless – and the ensuing health problems and crime problems and everything else associated with poverty – could actually be addressed.”

Several council-of-councils meetings running from July 5-11 in each sub-region offered civic leaders a preview of the region’s 2013 budget process, which aims to limit the increase in Metro’s per household levy to 2.5 per cent next year.