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		Housing Policy

What is Non-Market Housing?

Non-market housing provides housing mainly for those who cannot afford to pay market rents. It is housing owned by government, a non-profit or co-operative society. Rents are determined not by the market but by the residents’ ability to pay. Non-market housing is designed for independent living. This is in contrast to special needs residential facilities. These provide not only shelter, but also supervision, support or care for the residents. Some projects include both non-market housing and special needs units.

Federal/Provincial Housing Programs

In 1949, the Federal Government amended the National Housing Act (NHA) to allow Federal-Provincial partnerships to develop and manage housing for people unable to afford the housing provided by the private market. From 1953 to 1993, almost all non-market projects were funded under four joint Federal/Provincial NHA housing programs that provided capital and/or operating subsidies to different types of projects. Funding was approved for the first of these Vancouver non-market projects in 1953 and continued until 1993, when the Federal Government ended all funding for new projects. In 1993, the Province began funding new non-market housing projects without any assistance from the Federal Government.

The four joint Federal/Provincial housing NHA programs that provided capital and/or operating subsidies to different types of projects were:

Public Housing - projects owned and operated by government agencies;
Non-Profit Housing - owned and operated by public and private non-profit bodies;
Co-operative Housing - owned and managed by co-operative associations of the residents; and
Urban Native Housing - owned and operated by non-profit bodies, targeted for natives/aboriginals.

The public housing program was the result of the 1949 amendments to the NHA that allowed the Federal government to enter into partnerships with the provinces to build and manage subsidised rental housing for low-income groups. In Vancouver, the first project approved under this program was Little Mountain in 1953, while the last project approved was in 1976. These projects tended to be large and were often associated with the urban renewal schemes of the 1950s and 1960s.

The non-profit housing program provided subsidies for projects developed and managed by local non-profit bodies, either public or private. In the 1950s and 1960s, the projects funded were smaller developments for senior citizens. In 1973, changes to the NHA allowed for mixed-income projects and non-profit co-operatives.

1978 saw a restructuring of non-market housing programs. In previous programs, projects were funded through capital grants from the senior governments, and a direct mortgage below-market rates. After 1978, a project’s capital cost was covered by a 100-percent conventional mortgage guaranteed by the federal government through CMHC, and its operating costs (including mortgage payments) were subsidised. For seniors projects, the Province also made a grant of up to one-third of the capital costs.

In 1986, there were further modifications to the NHA. There was a shift away projects away from serving a mix of different income groups to having all the units targeted to “core-need” households. A household is defined as being in core housing need if it has to pay 30% or more of its income to rent an appropriate sized dwelling. The urban native and non-profit housing programs were changed to require new projects to be 100% core-need; the co-op program was changed to increase the proportion of low-income residents in new projects.

The public housing program ended in the 1970s. For the other NHA programs, the last years during which new projects were funded were 1991 for the co-op, 1992 for the urban native, and 1993 for the non-profit programs. The Federal government continues to provide operating subsidies for previously approved non-market projects, but since the end of 1993 it has provided no money for new projects.

In 1993, the Province began funding new non-market housing projects on its own. Homes BC has two components - the homeless/at risk (HARP) program and the non-profit housing program. The HARP projects are targeted to individuals in core-need with needs that are not met by traditional housing programs. The non-profit program primarily serves families and requires projects to be mixed income - 40% of households can pay low-end-of-market rents and 60% must be core-need households, who pay less than market rents depending on their incomes.

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The City’s Non-Market Housing Stock

Between 1953 and the end of 1997, 358 projects containing 19,847 units of non-market housing had been approved in the city. Some of these projects are replacement projects - nine projects from 1950s and 1960s, involving a total of 298 units, have been demolished, eight of them being replaced with new non-market housing on the same sites. There has been one non-market project that has been converted back to market rental housing (the New World Hotel with 122 units), and there have been renovations and other changes in non-market buildings that have changed the number of units. It usually takes several years between funding approval and non-market projects being completed.

By the end of 1997, the city had 335 completed and occupied non-market housing projects with 18,708 units, and another 15 projects (with 729 units) either approved or under construction. One of the projects underway, the Lions Paraplegic Lodge, will replace an existing non-market project developed in the early 1970s. Once the projects underway are completed, there will be 350 non-market projects with 19,437 units.

In 1991, non-market housing accounted for 8.5% of the City’s total housing stock and for 14.4% of its rental housing. While most neighbourhoods in the City contain some non-market housing, it tends to be located in areas where the need is greatest, multi-residential zoned land is available, and land prices relatively low.

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The City’s Role

In the 1950s and 1960s, the City sold sites to other levels of government and to non-profit sponsors, sometimes at less than market value. In 1971, the City began leasing city-owned land for non-market housing. Leasing allows the City to retain ownership of the sites, ensuring they are available for civic purposes at the end of the lease term, and, since leased land is worth less than freehold land, allows non-market housing to be built at lower cost.

Originally, the City was making land available that it had acquired in the distant past. Beginning in 1981, the City began to purchase and hold land specifically for lease to non-profit projects. Since 1988, the City has also required private developers to set aside a percentage of their units for non-market housing. The sites for these units are purchased by the City and leased to the non-market sponsors. The leases are usually for sixty years.

In 1981, the City established the Affordable Housing Fund. The fund had been used to provide money for:

projects where the lease write-down was not sufficient to ensure a viable project;
project development grants; and
specific housing initiatives such as the renovation of single room occupancy (SRO) hotels.

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