Canada is currently spending $90 billion on housing half-way through a 10-year program and funds for assisted housing surpassed $6 billion in 2022 – the highest in at least 15 years – according to the office of the parliamentary budget office. Ottawa added $20 billion to the housing file last year and the finance minister pledged to “top up” spending in the 2023 budget, expected March 28.
Planned federal spending targeted at housing the homeless increased 240 per cent last year, to $420 million annually.
Much of the assistance flows into British Columbia, which is recognized as a frontline in Canada’s housing crisis.
In B.C., the province’s 2023 budget pledged $4.3 billion for subsidized housing, equal to the entire provincial deficit, after the province had announced a separate $500 million fund to help non-profits buy old rental buildings. This is addition to $428 million aimed at those “currently homeless or unstably housed” in the 2022 provincial budget.
But, as the parliamentary budget office noted, there is no standard government definition of affordable housing. And, in B.C., no one knows how many homeless there are, or if the programs meant to house them are making any difference.
Questions regarding provincial government spending and accountability has led to a forensic audit of BC Housing, the provincial housing agency. Conducted and complete last year by Ernest Young under orders from B.C. Premier and former housing minister David Eby, the potentially explosive audit has yet to be released.
B.C. currently has 70,000 subsidized housing units in 3,200 non-profit buildings and the number is mushrooming as billions of dollars pump in from taxpayers.
The big winners, however, appear to be politicians queuing for the spending announcements and registered housing charities with multimillion-dollar payrolls.
Losers include the innocent living in old hotels converted to house the homeless, where violence and other crime is a constant threat.
$500,000 per home for homeless
On March 15, 2023, four federal politicians and the mayor of Surrey were on hand for the announcement for the latest B.C. homes funded by the federal government under its $4 billion Rapid Housing Initiative (RHI) the mandate of which is “serving people experiencing or at risk of homelessness and other vulnerable people.” There are currently 90 such supportive housing or shelter beds under construction in Surrey, B.C.’s second-largest city.
Typical of the half-dozen RHI projects approved in Metro Vancouver since 2021, each of the 23 apartments in the latest Surrey project will cost the government $500,000 to build, plus on-going staffing and security costs. A 2021 Surrey permanent modular social housing project for women at risk, managed by Atira Womens’ Resource Society, cost $372,000 per unit and the province is covering annual operation funding for 20 years.
In comparison, the average hard construction costs for a private developer to build a 450-square-foot economy-level rental apartment in Metro Vancouver is $110,000, or $245 per square foot, according to the Altus Group construction cost guide for 2023. While developers also pay for land, social housing sites are often either donated or offered in low-cost, long-term lease arrangements by the host municipalities or other levels of government.
Surprisingly, despite the billions being spent in subsidies, there is no reliable data on the number of homeless people in B.C. or where or if they are finding homes.
The B.C. homeless count was held March 8 and 9. It was in first in three years, but results will not be available for at least seven months, according to the Homeless Services Association of B.C., which conducted the count. This year, each of the suspected homeless were asked 27 detailed questions, but their name or contact information was not among them.
That anonymity, which negates access to or the monitoring of individuals, is one of the reasons the BC Non-Profit Housing Association declined to oversee the 2023 count, as they have done in the past.
“We started to question whether sending 1,100 volunteers out to ask people deeply personal questions to come up with an anonymous data set was something we wanted to put our resources in,” association CEO Jill Atkey told Glacier Media.
Despite the lack of data, tax-exempt non-profit housing societies have been quick to access government funding.
Multimillion-dollar payrolls
A cursory investigation finds that, in 2022, just four Vancouver housing groups set up to house and support the most vulnerable – Atira Women’s Resource Society, Lookout Housing Society, PHS Community Services Society and RainCity Housing and Support Society – took in a combined $204 million from government and, all told, paid their own staff more than $151 million in wages and salaries.
A fifth, Pacific Community Resource Society, which is completing a Surrey housing-for-homeless project that was funded under the RHI in 2021, took in $30.2 million in total government funds last year, paid out $18.6 million in wages and salaries and logged nearly $30,000 per month in travel and car expenses, according to its filings with the Canada Revenue Agency.
Atkey defended the staff compensation paid by non-profit housing groups.
“Providing leadership and oversight to a multimillion-dollar agency requires skill and expertise. I’m not sure where the expectation that these skills be provided at rates dramatically below market comes from, but it’s an expectation that causes harm to the people providing and receiving service,” she stated in an email to Western Investor.
Capital spending
The cost of acquiring old hotels to convert them to house the homeless is also eye-popping, however,
Last January, the City of Vancouver, using federal funds allocated through the RHI, bought the aging Days Inn hotel at 2075 Kingsway, Vancouver, paying $25 million and earmarking the same amount for renovations. The 65-room property is valued at just $4.4 million, according to the latest BC Assessment. As a permanent housing shelter, the single-room-occupancy residents, whose rents are covered by a B.C. shelter allowance, have fully staffed wrap-around supports, including daily meals and a “safe room” where people can consume hard drugs.
In March 2022, Atira paid $6 million over the assessed value for the century-old Columbia, an SRO hotel and beer parlour on the Downtown East Side. The cost-per-key was $202,000.
The B.C. government also paid far above assessed value when it embarked on a buying spree of hotels in Vancouver and Victoria despite the hotel industry facing a distressed market due to the pandemic. The headline 2021 deal was the Patricia Hotel on troubled East Hastings Street – where a tent-city homeless encampment appears firmly entrenched. BC Housing paid $327,000 per door for the old hotel, which was more than three times higher than the average price of a hotel room sold in Canada in the same year, based on industry data from Colliers.
‘Scary’ crime levels
However, many homeless people we met with said they were afraid of staying in SROs, including those managed by government.
Johnny Frias, a 55-year-old resident at a City of Vancouver managed SRO since last November, witnessed a fist fight in the lobby the day he arrived, and said drug dealing, thefts and assaults are common.
“I don’t lock my door anymore,” Frias said, gesturing to a broken door frame in his 100-square-foot room in the former Days Inn. “They just break in anyway.”
In the past year, Vancouver police responded to 119 calls at 2075 Kingsway, but this is considered low when compared to other hotels converted to house the homeless. After BC Housing paid $500,000 per key to buy an old 110-room hotel at 1176 Granville Street to shelter former residents of an Oppenheimer Park homeless encampment in 2020, police have been called to the site 2,494 times, including 751 calls last year, according to the Vancouver Police Department.
A Vancouver homeless man, who asked not to be named because he is on the list for a BC Housing apartment, said he was sleeping in a car rather than suffering another night in a “scary” downtown SRO managed by a non-profit housing society.
Next in the report: Success stories in the social-housing space.
