What is it?
The private sector cannot provide the housing at the levels of affordability that we most need, because it relies on a for-profit model.
Affordable housing that is funded and coordinated directly by government can be delivered much more quickly and reliably than through partnerships and mixed arrangements with the private sector.
While the private sector can play an important role in construction, the ownership, operation and financing of new affordable rental housing should remain firmly in the public and non-profit sectors. This can help ensure that it remains affordable – as a public good – forever.
There are multiple options for structuring the investment and the resulting public management framework—be it through purpose-built, publicly owned units, or a mixed approach involving other tenancy models such as co-ops and community land trusts.
Government investment in rental housing construction can be structured in a self-sustaining way, and, where needed, as self-supported debt (for example, public and non-profit housing projects will repay up-front capital costs with ongoing rental income). Lower interest rates and longer amortization available to government, combined with pricing based on a break-even model, would allow public and non-profit providers to charge below-market rents.
What are the province’s current commitments?
The provincial budget of 2018 committed to build 114,000 new units of housing over 10 years—including $445 million over three years for mixed-income social housing. But the immediate need across B.C. communities is much greater than can be addressed with those measures alone, particularly considering the COVID-19 pandemic and ongoing economic recovery. Moreover, the federal government’s National Housing Strategy has significantly under-performed in terms of delivering promised new affordable housing in B.C.
What kind of targets should we be aiming for?
B.C. has a huge shortage of affordable housing. The provincial government should expand and accelerate both its capital funding and public land contributions in order to immediately build new public, co-op, social and nonmarket housing.
The BC Rental Housing Coalition has called for $1.23 billion in total funding annually for new affordable rental supply, with $410 million annually coming from the province. The B.C office for the Canadian Centre for Policy Alternatives suggests yearly investments of approximately $2.5 billion for a high ambition plan based on 10,000 new units annually of non-market rental housing.
Local governments across B.C. also own significant amounts of land and should consider using more of this property for affordable housing development. In some cases, local governments may have enough capital resources to build on this land themselves.
Scaling up public housing makes good economic sense, but is ultimately a choice that requires political will.