(This article was kindly contributed by Carol Volkart as an update to media coverage following the 1807 Larch story: “Kitsilano MIRHPP* building raises questions of affordability and what taxpayers got for $32 million low-interest loan. *Middle-income rental housing pilot program.”)
A story that began on Town Hall Clock The July 22 debate has turned into a media storm over whether the NDP government should help developers build so-called affordable housing that turns out not to be affordable at all.
The original story comes from Kitsilano residents Sal Robinson and Judy Osburn, who wondered why a so-called affordable housing project in their neighbourhood, which had received a $32 million low-interest loan from the government, was charging up to $2,750 a month for a 36-square-metre studio and up to $4,300 for an 800-square-metre two-bedroom apartment.
The Globe & Mail Columnist Kerry Gold picked up the story and interviewed Robinson and Osburn for an August 2 article about the five-story apartment building project at 1807 Larch. Glacier MediaRob Shaw followed with a column on August 6; The Vancouver Sunby Vaughn Palmer on August 7 and CBC’s Katie DeRosa on August 8, along with an interview with Tom Davidoff on CBC’s “The Early Edition” the same day.
The globe The article lit the fuse for the media frenzy that followed, with comments from a BC Housing official about the true purpose of the HousingHub program under which the developer received that $32 million government loan. Contrary to previous government statements — including one in December 2021 from then-Housing Minister David Eby announcing the loan — it wasn’t about affordability at all. It was about supply.
“The HousingHub program is a supply-based program,” Michael Pistrin, vice president of development at BC Housing, told the globe. “It’s not an affordability program. The whole intention of HousingHub was to create more housing. And it was supposed to be market-rate rental housing.”
“It should not be below market value at all. It should be largely ‘fair market’. In some cases, through the favorable financing we can offer during the construction phase, we can force the developer to reduce the rent on a certain percentage of the units, in some cases just below market value.
“But it varies from case to case … for the most part it was just about increasing market supply.”
This, as both Shaw and Palmer pointed out, represents a stark difference from what NDP politicians have been saying for years.
Palmer noted that when Eby announced the project three years ago, he “touted it as a groundbreaking example of the NDP government’s commitment to ‘affordable’ housing.” A Dec. 16, 2021, Ministry of Housing news release stated, “Another affordable rental housing building will soon be available to people who work and live in Vancouver.” Palmer noted that the terms “affordable” and “affordability” were used about a dozen times in the news release.
Funding for the Kitsilano project was part of $2 billion in additional funding the government pumped into HousingHub in the 2021 spring budget, with a promise to create more affordable housing for middle-income earners, Shaw explained.
Now, Politicians and academics alike are wondering why the government gave a major developer an advantage using taxpayers’ money so that it could build more of the expensive housing it was already building.. Especially since further such loans are planned. Jameson Developments, the same developer behind 1807 Larch, is also set to secure $165 million in low-interest financing for a 28-story, 258-unit tower at 2528 Birch St. at Broadway. (Another Jameson rental project that deserves a closer look is at 1649 East Broadway (formerly 1619-1651 East Broadway), which was rezoned for 10 floors in 2018, resubmitted, and rezoned for 12 floors in September 2020. Now known as Hub Place, it became the first completed project under Vancouver’s generous MIRHPP developer incentive program in summer 2024. But months before completion, Jameson apparently sold it to an investment fund in a multimillion-dollar deal in December 2023.)
Back to 1807 Larch: “What types of tenants can actually afford these new units?” Andy Yan, director of the City Program at Simon Fraser University, asked in the globe History. “Aren’t these the ones who are already served by the marketplace?”
He said if taxpayers were subsidizing construction under the guise of providing services, the province could have demanded a share of the equity in return. “Why are taxpayers subsidizing development at market rate and are they getting something for their money?”
Conservative MP Elenore Sturko also questioned what taxpayers are getting for their cheap loans. In Shaw’s column, she is quoted as saying: “The only people who have an advantage in this equation are the developers.”
“This government has repeatedly promised to make housing affordable. But that means that the costs of doing so should actually be reduced … and here we see that we have not reduced the costs.”
According to a report by Katie DeRosa on CBC, Sonia Furstenau, leader of the Green Party of British Columbia, called the low-interest loan an “inciting” misuse of taxpayer money. “People who need housing are not the ones who can afford $4,200 a month in rent.”
Tom Davidoff, an economist at UBC’s Sauder School of Business, director of the real estate industry-funded Centre for Urban Economics and Real Estate (CUERE) and a prominent adviser on the province’s current housing policy, told CBC’s The Early Edition that “1807 Larch” is a lesson that building new affordable housing in prime locations may be too expensive.
“I think that suggests that maybe you don’t want to build affordable housing in brand new buildings in an A-plus location, because people see that even if you spend a lot of money subsidizing affordability, you don’t end up getting that much. It would make a lot more sense to try to buy up older housing or just give cash grants to low-income households so they can pay rent.”
When asked about the discrepancy between the government’s emphasis on affordability and BC Housing’s position that the program that built 1807 Larch was focused on supply, not affordability, Davidoff did not answer directly.
“I think the province has done a great job of creating more housing, more market-rate housing,” he responded. “I think you need to think more about how to create affordable housing for the people who can’t afford market-rate housing. And the answer is older, smaller units and some income support. The answer is not to try to lower rents in a brand new building in a great location, because the subsidy just has to be very high.”
Asked how the current controversy affects the NDP as it prepares for election, Davidoff pointed to new housing legislation passed last fall (Bill 44, Housing Statutes (Residential Development) Amendment Act, 2023), which stripped local governments of zoning power and imposed new, massive density limits on all communities with populations over 5,000. Allowing multi-family housing on a large scale will shorten the lines of people – including fairly wealthy ones – looking for it and eventually lead to lower prices, he said.
“Personally, I’m pleased with the pressure they’ve put on to impose — if you will — population density on communities, in the sense that land use decisions at the local level are very much focused on ‘Not in my backyard,’” said Davidoff, who was among the outside experts consulted by the NDP when it created a list of “naughty” communities that aren’t doing enough to build new housing. (It was only through CityHallWatch’s FOI requests that the housing minister was forced to disclose the list of experts, including Davidoff, although housing minister Ravi Kahlon refused to release the data underlying the “naughty list.” See the article “It took five months, but.”)
“At the provincial level, we can say, ‘Yes, we need to preserve the amenities in the neighborhoods, but we also need more housing.’ And the province has done a great job in that regard.”
With the provincial election looming on October 19, 2024, 1807 Larch will be a particularly hot topic in Vancouver-Point Grey, where the project is located. In addition to representing the constituency, Premier David Eby, in his role as housing minister in 2021, announced taxpayer-funded support designed to ensure the project’s “affordability.”
This is a good starting point for voters – not just in Eby’s constituency, but across the province – to examine the NDP’s housing laws and policies. How successful have they been in promoting affordable and livable, thriving neighborhoods? And what would candidates from other parties do differently, if anything?
