Non-Market Housing in Vancouver's Major Projects

Non-market housing is housing subsidized through government programs for families and individuals who cannot afford to rent market housing, or for whom the market does not always provide housing, such as the disabled.

What is a major project?

A major project creates a new neighbourhood. Usually they are the conversion of former industrial areas to residential and other uses. False Creek South Shore and Champlain Heights were major projects undertaken by the City in the 1970s. Coal Harbour, the north shore of False Creek, Collingwood Village and Fraser Lands are major projects in other areas of Vancouver.

Data as of April 2008
Project	Built	Funded	Unfunded	Capacity
1. Bayshore	111	0	0	111
2. Coal Harbour	383	0	40	423
3. Int. Village	0	120	0	120
4. Concord Pacific	434	100	846	1380
5. City Gate	176	0	0	176
6. Arbutus Lands	53	0	0	53
7. Pacific GMC	34	0	0	34
8. Tugboat Ldg.	42	0	0	42
9. Fraser Lands	194	0	0	194
TOTAL	1427	220	886	2533

Why does the City want to see non-market housing in major projects?

Non-market housing provides opportunities for modest and lower income households to live in new neighbourhoods. It creates the range of incomes typical of established communities but difficult to achieve in new communities without assistance. Families with children have a particularly difficult time finding affordable housing in Vancouver, and non-market housing in the major projects is one way to keep families with children in the city.

Why does the City want 20% of the units in the major projects to be non-market housing?

After Expo ‘86, the City developed policies for the redevelopment of False Creek. The federal/provincial housing programs of the day provided housing only to core-need households (households that would have to pay more than 30% of their gross income to rent in Vancouver). At that time 20% of the households in Vancouver were in core-need. As well, 23% of the households on the south shore of False Creek would have been in core-need if they weren't living in non-market housing in the City's development.

Isn't there conflict between market and non-market residents?

Non-market housing is integrated into many of the neighbourhoods in the City, including the original major projects such as Champlain Heights and False Creek South Shore. There have been little or no problems. Studies have shown that non-market housing has no impact on nearby property values. Non-market housing provides safe and secure housing and a stable environment. It eliminates many of the negative consequences of poverty. Most non-market projects accommodate a range of incomes. In the current housing program 60% of the households are in core-need and receive subsidies, and the other 40% pay close to market rent.

Why must half of the non-market housing be designed for families?

As Vancouver has grown, low and modest income families with children have been pushed out of the City. It is a long standing City objective to create opportunities for families to stay in Vancouver. The City requires that 25% of all the housing units, market and non-market, in the major projects be designed for families, as well as half the non-market housing.

Do all the major projects provide 20% non-market housing?

Not all major projects provide 20% non-market housing. In some cases, such as Collingwood Village and the Arbutus Neighbourhood, not all public objectives could be achieved without compromising the economic viability of the project. Non-market housing is only one of several public objectives sought in major projects; parks, community centres, neighbourhood houses, sites for schools, seawall walkways, and daycares are some of the others. Sometimes the cost of all the potential public objectives exceeds the ability of the project to pay. As well, if senior government funding for non-market housing is unavailable, some non-market sites are converted to market through a payment-in-lieu.

How much non-market housing has been created in the major projects?

Since 1988 when the policy was adopted, a capacity of 2572 units has been created in the major projects on over 30 sites. These are scattered throughout the projects and integrated with the market housing. Most of the capacity, 1,520 units, is on the north shore of False Creek, the largest major project in Vancouver.

How much non-market housing has been built in the major projects?

As of March 31, 2002, eleven projects with 736 units have been built, and two projects with 386 units have been funded and are under construction. This includes nine non-profit projects with 879 units which can accommodate core-need households, and two non-profit projects with 243 units where all households pay market rent.

Who provides funding for non-market housing?

The federal and provincial governments have provided the funding for non-market housing since housing programs were initiated following WWII. Until 1993 the federal government provided 2/3 of the funding and the Province 1/3. The federal government has not provided funding for new non-market housing since 1993. The Province has maintained its funding.

What do the major project developers provide?

Major projects require City approval through rezonings. As a condition of this approval the City requires that the developer set sites aside for non-market housing and make them available for funding under the Province's non-market housing programs.

Does this mean the major project developers provide the sites for free?

No. Housing programs set maximum budgets that non-market projects cannot exceed. These are based on typical construction and land costs in the region. The major project developers must develop the non-market housing within these budgets. What is leftover from the budgets after all the construction and other costs have been paid is the price the developer receives for the site.

Is the major project developer providing any subsidy to non-market housing?

In most cases yes, but not necessarily. In most cases the developer could get a better price for the site if it was sold for market housing than for non-market housing. If so, the developer is providing a subsidy equal to the difference between the market and non-market prices for the site. However, it is possible in some cases that non-market housing could generate a price equal to the market, in which case the developer would not be providing a subsidy. The size of the subsidy will vary from major project to major project, and from site to site within the major project.

What does the City provide?

The City buys the site from the developer and pays a quarter of the land cost. Once funding is in place the City leases the site to a non-profit housing sponsor for 60 years.

When will the rest of the non-market housing be built?

The major projects are large developments that will take a decade or more to complete. The City holds 80 year options on the non-market sites to ensure that the sites remain available for non-market housing no matter how long it takes the developments to be completed. The non-market sites become available for development when the adjacent market projects proceed. We are seeing one or two sites come available every year or two.

With the loss of federal funding for non-market housing, will provincial funding always be available when non-market projects are ready to proceed?

Under current housing programs families have priority. With the reduced funding for non-market housing, funding for the non-family sites may not be available when projects are ready to proceed. There are a couple of non-family non-market sites that are ready to proceed now and for which funding is not available. So far funding has been available for the family non-market sites when they were ready to proceed. What can the City do with sites for which no funding is available? The City can hold the sites in the hope that federal or provincial funding will come available for up to 80 years. For some sites, however, this may not be feasible. Some non-market sites are physically integrated into larger market projects, and it will be very difficult and maybe impossible to return in the future to complete the project.

If funding isn't available, and holding a site until it is isn't feasible, what then?

There are several other options. One is to develop ‘affordable' housing on the site without federal or provincial housing subsidies. Without these subsidies, it is not possible to accommodate core-need households, but market rental housing may be feasible or a mix of market and rental housing. Another option, if funding for non-family non-market housing is not available but funding for families is, is to convert a non-family site to family. This was done for a site in the Coal Harbour project. A third option is to let the developer convert the non-market site to market housing and pay the City the difference between the market and the non-market values for the site.

If the City allows the non-market sites to be converted to market, how will the City achieve its housing objectives?

It may not be possible to achieve all the City hoped. It all depends on continuing provincial housing programs. There is an average of 9% non-market housing in the City of Vancouver, and that should be our minimum target. However, the current lack of federal and provincial funding for housing may not be permanent. Once the federal deficit is eliminated, we may see the federal government once again funding new non-market housing. The City intends to hold the non-market sites that can be held without interfering with the development of the market sites. As well, there may be opportunities to recapture any lost non-market housing capacity elsewhere in the major projects. The major projects will take a decade or more to build out, and the City will be patient. It is up to the City whether or not to hold a non-market site or to do something else with it.

If the City allows a non-market site to be converted to market, what does it do with the cash it gets from the developer?

It can be used in a number of ways. It could be used to buy a site nearby that can be held until funding is available. It can be used to subsidize another project. It could be used to renovate an existing low-income building. Or it could be used to buy a few units in several buildings that could be rented to core-need households. The choice is City Council's. Until a decision is made, the funds would be held in the City's Affordable Housing Fund.

Won't the developer get a windfall by converting a non-market site to market?

If the City requires the developer to contribute the difference between the market and non-market values for the site, the developer will not get a windfall. The City gets the windfall. All the developer gets is the normal developer's profit required to compensate for the risk of development. Without that as an incentive, the developer would not be willing or even able to consider payment-in-lieu.

What exactly are the steps from conception to occupation of a non-market housing project?

During the rezoning for a major project, non-market sites are identified,
Before development can proceed, a legal agreement giving the City an option to develop the sites for non-market housing must be entered into. This option requires that the developer make the sites available for non-market housing within the requirements of the provincial housing programs, and when they are made available.
When a non-market site must be submitted for funding from the Province (the Province seeks non-market housing proposals annually) the developer is provided with a list of non-profit housing sponsors from which they select one to partner in the submission to the Province.
If funding is provided, the developer must satisfy any conditions for the funding such as finalizing the design and the construction contract, and once all the conditions have been satisfied, the City buys the site and leases it to the non-profit sponsor, and the developer proceeds to build the project which is turned over to the sponsor when complete.
If funding is not provided, the developer must continue to submit the site to every subsequent proposal call until they are successful in getting funding or the City chooses to proceed with an alternative use of the site.

How does someone apply to live in non-market housing in the major projects?

Each sponsor maintains their own waiting list, and applications should be made directly to the sponsors. For new projects, applications are not accepted until a sponsor is chosen for a project. If someone is interested in one of the projects that has been built or under construction, they can call the City of Vancouver Housing Centre at 873-7481 for the name of the sponsor.

If I have any other questions, who should I call?

Call the City of Vancouver Housing Centre at 604.873.7481.

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Questions or Comments? E-mail: housing.centre@vancouver.ca