BC's new Rental Protection Fund considering 25 property acquisitions

BC government's new Rental Protection Fund considering 25 property acquisitions

Post 83 Housing Co-operative at 4221 Mayberry Street, Burnaby. This older housing building was jointly acquired by BC Housing and the City of Burnaby in 2022 to preserve the affordability of the units. (Google Maps)

The mantra of the Rental Protection Fund is that some of the most affordable secured purpose-built rental homes are those that already exist.

These properties, which are older and require reinvestment, are increasingly at risk of being acquired by for-profit private developers for their conversion into more expensive housing from post-renovation conversion or complete redevelopment.

For this reason, early this year, the provincial government created the Rental Protection Fund, which is now overseen by an arms-length non-profit society comprising the BC Non-Profit Housing Association, Cooperative Housing Federation of BC, and Aboriginal Housing Management Association.

You might also like:

The organization has a mandate to consider proposals by experienced non-profit housing operators to acquire at-risk housing properties to maintain their use for existing residents at affordable rents for middle-income households. It aims to fill the gap between working individuals and families who do not qualify for subsidized housing but are struggling with escalating rents.

To kick off its efforts, the provincial government has supplied the Rental Protection Fund Society (RPFS) with $500 million in initial funding for its acquisitions.

In its first update today since July 2023, when it opened up its applications for proposals, the RPFS has indicated it has received over 70 applications from non-profit housing operators outlining their proposals to seek funding to acquire properties.

According to the RPFS, the average rental rates of the properties under consideration are less than half the current market rates for similar-sized units, with an average of $1,097 compared to the market rent of $2,440.

Currently, 11% of these units have rents below $600, 36% of these units have rents between $600 and $1,000, 38% of these units have rents between $1,000 and $1,500, and 15% are over $1,500. One-third (32%) of these units are family-sized homes with two or three bedrooms, and the remaining two-thirds (68%) are studios and one-bedroom units.

So far, the RPFS has shortlisted 25 proposed housing acquisitions with a combined at-risk total of 1,363 units for over 3,000 residents. The vast majority of these units are rental housing (78%), while the remainder are cooperative housing (22%).

The 25 proposed properties for acquisition would use up 60% or $295 million of the RPFS’s initial available funding pool of $500 million, with an average fund contribution of $205,000 per unit. It is noted that the average required cost of renovating these aging homes is $40,000.

At this stage, the specific locations of the proposed properties for acquisition have not been revealed, but the general locations of the proposals based on region have been identified:

Southwest (Metro Vancouver and Fraser Valley): 15 properties with 1,075 units; 1980 average building age
BC Interior, Thompson-Okanagan, Kootenay: 1 property with 26 units; 1974 average building age
Vancouver Island and Central Coast: 7 properties with 221 units; 1965 average building age
Northern BC: 2 properties with 41 units; 1969 average building age

Within the Lower Mainland, the proposed properties are located in the jurisdictions of Vancouver, Burnaby, Coquitlam, Langley, North Vancouver, New Westminster, and Chilliwack.

Katie Maslechko, the CEO of the RPFS, says the proposal for acquisitions is still coming in at a pace of 25 units per day.

With 1,363 units under consideration for support by the RPFS, the program has already reached 68% of the provincial government’s targeted goal of securing 2,000 units over three years using the initial funding pool.

It is estimated there are 286,000 affordable rental homes across BC that are at risk of being redeveloped or seeing rents increase considerably, including 175,000 units within the Lower Mainland and Southwest region.

Generally, secured purpose-built rental homes become more affordable over time from both the aging of the structure over time and the introduction of new units into the market to create more competitive rents. Over time, expensive secured rental homes become some of the most affordable housing supply.

However, this market-based affordability process has been stunted by the lack of new additional secured purpose-built rental homes over the decades, which has effectively increased the rent pressure for even older supply.

In addition to providing an update on its application volume intake, the RPFS has announced the first 22 pre-qualified non-profit housing operators, with more than 50 additional applications in progress. These pre-qualified operators already own and/or operate over 280 buildings with 14,500 units across the province. Here is the list of these operators:

Affordable Housing Societies (Southwest)
Aunt Leah’s Foundation (Southwest)
Ballenas Housing Society (Island)
Brightside Community Foundation (Southwest)
Catalyst Community Developments Society (Southwest, Interior, Island)
Canadian Mental Health Association (Interior)
Columbus Homes (Southwest)
Community Land Trust (BC-wide)
Community Builders (Southwest, Interior)
Connective Support Society Kamloops (Interior)
Connective Support Society (North, Interior)
Entre Nouse Femmes Housing Society (Southwest)
Greater Victoria Housing Society (Island)
Hiy̓ám̓ ta Sḵwx̱wú7mesh Housing Society (Southwest)
John Howard Society of Okanagan and Kootenay (Interior)
Lu’ma Native Housing Society (Southwest)
More Than A Roof Housing Society (Southwest, North)
New Commons Housing Trust (Southwest, Island)
The New Vista Society (Southwest)
Penticton and District Society for Community Living (Interior)
Tikva Housing Society (Southwest)
Union Gospel Mission (Southwest)

You might also like: