Auditor general deems BC Housing followed rules in its hotel-buying spree

Mar 1 2022, 9:14 pm

All protocols and policies were followed by BC Housing during the first two years of the pandemic when it carried out an aggressive strategy to buy accommodations properties for individuals experiencing or at risk of homelessness.

In late 2021, the BC Auditor General’s Office began auditing the provincial crown corporation’s use of capital funding granted by the provincial government to acquire nine properties, including five in Vancouver and four in Victoria.

The report on the audit’s findings, released today, found that all relevant government and BC Housing approval requirements were followed in the procurement of these properties.

The province’s independent auditors also found that BC Housing performed its due diligence in assessing the value and condition of the properties, and did not overpay for the acquisitions in the midst of the pandemic emergency.

It found that the purchase prices were within an acceptable 5% to 10% margin of error of the appraised market value, which is not based on BC Assessment’s comparatively lower values. The combined total cost of the nine property acquisitions was $221 million, which includes taxes and fees associated with the ownership transfer, on top of the purchase price. It should be emphasized that this represents about half of the total of what BC Housing spent to acquire properties for the homeless.

auditor general bc housing acquisitions 2020 2021

Locations of the nine properties in Vancouver and Victoria acquired by BC Housing in 2020-2021 for housing for homelessness, using pandemic-time provincial government funding. (Auditor General of BC)

auditor general bc housing acquisitions 2020 2021

Locations of the nine properties in Vancouver and Victoria acquired by BC Housing in 2020-2021 for housing for homelessness, using pandemic-time provincial government funding. (Auditor General of BC)

BC Housing policy requires projects with a capital value of $35 million or more required approval from the Crown corporation’s board of commissioners. The audit determined that the board approved the acquisitions of the 110-room Howard Johnson Hotel at 1176 Granville Street for $56.6 million, and the 195-room Patricia Hotel at 403 East Hastings Street. The purchase price for the other seven properties was below $35 million, so they did not require board approval.

Other steps that were followed include approvals by the provincial Treasury Board and the BC Housing executive committee.

The auditor general states four hotels with a combined total of 399 spaces were acquired for $110 million in 2020 using the special pandemic-time funding from the provincial government. This was largely in response to the efforts to relocate 261 people living in the Oppenheimer Park encampment in the Downtown Eastside, and 344 people living in the Topaz Park and Pandora Avenue encampments in Victoria. In some cases, the hotels were leased by BC Housing initially on a temporary basis, before a decision was made to acquire the properties for permanent use.

With government funding, BC Housing acquired an additional five hotels with a combined capacity for 411 spaces in 2021 for $111 million.

The Crown corporation intends to eventually redevelop many of these properties into permanent affordable housing and supportive housing.

Between 2020 and 2021, BC Housing spent a grand total of $403 million to acquire properties to address homelessness, using a combination of its own capital budget and the provincial government’s pandemic-time funding allocated to the Crown corporation. The nine properties acquired using special government funding represent 55% of the overall total.

auditor general bc housing acquisitions 2020 2021

BC Housing Property Acquisitions April 2015 – October 2021. (Auditor General of BC)

Under the BC NDP provincial government, even before the pandemic, BC Housing has been provided with a significantly larger mandate to help tackle housing affordability for middle-class households, as well as the needs of lower-income households and homelessness.

BC Housing’s budget has fluctuated over the years, but there is an overall upward trend, with an annual budget of $1.14 billion in 2017, $782 million in 2018, $1.25 billion in 2019, $1.3 billion in 2020, and $1.6 billion in 2021.

The provincial government’s overall investments in housing affordable and homelessness, including BC Housing, have risen from $453 million in the 2017/2018 fiscal year to $776 million in 2018/2019, $939 million in 2019/2020, and $979 million in 2020/2021. Based on last month’s budget plan, these expenditures are expected to grow to $1.114 billion in 2021/2022, $1.257 billion in 2022/2023, $1.265 billion in 2023/2024, and $1.297 billion in 2024/2025 from new programs such as complex-care housing, and other initiatives to tackle homelessness, mental health, and opioid addictions.

Kenneth ChanKenneth Chan

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