Not-for-profits are racing to save affordable apartments. But critics say we should just build new ones

Marleny Ozuna Felix seems to person won the lottery of landlords. 

For arsenic agelong arsenic she stays successful her building, the azygous parent of 3 has a warrant that her location volition stay affordable. 

She pays $964 per period for a one-bedroom flat successful Burnaby, B.C. — astir $1,390 cheaper than the mean rent for a portion that size successful the area. Depending connected the attraction needs of the building, determination volition beryllium years her rent doesn't increase. And successful the years it does, it volition ne'er transcend provincial guidelines. 

When her gathering went up for sale, chances were precocious a for-profit landlord would acquisition it, beryllium it a tiny backstage equity steadfast oregon a ample corp whose absorption is to marque a instrumentality for investors.

Instead, the caller proprietor is Aunt Leah's Properties, a not-for-profit enactment whose main nonsubjective is to support rent accessible and to sphere what's near of Canada's affordable housing. It bought the gathering with a assistance from a caller provincial programme with a similar objective.

"I would beryllium retired connected the streets with my children if we were evicted from here," Felix said successful a caller interrogation with CBC. "I conscionable can't spend thing other that I spot connected the marketplace successful this neighbourhood oregon anyplace else."

Her communicative mirrors that of renters crossed the state who person seen record-breaking increases, portion those successful below-market units unrecorded with the changeless fearfulness of eviction truthful their landlord tin relist their location astatine a higher terms oregon demolish it to physique a bigger building. 

WATCH | Their rent has efficaciously been frozen. What it means for these B.C. tenants: 

But this communicative is much than conscionable Felix's. In galore ways it's the communicative of the gathering — and whether it could beryllium a exemplary of however this state tackles the affordable lodging crisis. While galore marketplace analysts suggest the solution is to physique much housing, others reason that authorities backing and not-for-profits tin assistance capable the spread by conserving existing affordable lodging stock.

The Ontario Non-profit Housing Association estimates community housing accounts for astir 12% of wide rental lodging successful Canada. Non-profits ain lone a information of that — meaning that for-profit landlords ain the lion's stock of multi-family buildings. 

In the 1990s, the authorities mostly got retired of subsidized lodging and turned the bulk of lodging implicit to the backstage sector. Since then, backstage landlords person been the superior buyers and developers of caller stock. They've besides sometimes taken the blasted for the deficiency of affordable lodging portion the authorities has taken a backmost seat. 

But the tide is changing, astatine slightest successful B.C.

The B.C. Rental Protection Fund was announced successful 2023 and has a extremity of investing $500-million to assistance not-for-profits, who, similar Aunt Leah's Properties, bargain existing, occupied buildings and guarantee the rent stays predictable for tenants. 

"The astir affordable lodging we person is the affordable lodging we've already got," said Katie Maslechko, CEO of the Rental Protection Fund. "We were losing 4 to 5 affordable units for each 1 caller portion that we were building."

How it works

Not-for-profits tin use to the money for a one-time, non-repayable superior assistance to assistance with the purchase.  

Once an enactment has pre-qualified, Maslechko said they tin commencement shopping. Those pursuing the acquisitions are encouraged to see the building's capacity, scale, determination and tenants, each with a extremity of making definite the acquisition is sustainable, she said.

The assistance fundamentally turns the gathering into a benignant of rental clip capsule — the rent for each portion stays efficaciously the aforesaid arsenic it was astatine purchase, unless determination are important mainteance costs oregon different factors. Then, the summation would spell nary higher than a fewer percent points, immoderate the headdress the provincial programme has acceptable for the year. 

It offers stableness not lone for the tenants surviving there, but besides keeps rent from skyrocketing if there's turnover — dissimilar the backstage assemblage wherever determination is nary rent headdress connected apartments that go vacant. 

It's a antithetic exemplary than subsidized housing, and it tin capable a spread for middle-income renters, Maslechko said.

"The teachers and nurses and radical that marque our communities tally but are truthful often near down by everything other retired there," she said. "They often marque a small spot excessively overmuch to suffice for subsidized housing. And you besides spot that with folks connected a pension, they marque conscionable a small spot excessively much, adjacent disconnected their pension to suffice for subsidized lodging programs." 

Last spring, the Liberal authorities announced the Canadian Rental Protection Fund, which would run likewise to 1 successful B.C. It's inactive successful the aboriginal stages and has yet to lend to immoderate acquisitions. 

A spokesperson for Housing, Infrastructure and Communities Canada told CBC it would beryllium accepting applications from lodging providers until the extremity of May.

The nationalist money has a fund of $1.47 billion, with $470 cardinal allotted for non-repayable grants and $1 cardinal successful low-interest loans to "support the acquisitions of existing, privately owned, multi-unit residential buildings.

WATCH | The payment of redeeming existing lodging alternatively of building new:

The CEO of the Ontario Non-Profit Housing Association, which oversees 700 not-for-profits successful Ontario, estimates that specified a fund could prevention up to 10,000 affordable units successful 2 years.

Marlene Coffey said not-for-profits who person been successful this concern semipermanent cognize however to sphere the existing affordable lodging stock.

"We cognize wherever it's being mislaid and we cognize wherever we would support it," she said. "Also if we ain the plus we tin leverage that done financing, truthful it's successful our involvement to turn our portfolio and leverage that plus and bash more, truthful determination is simply a domino effect successful this strategy."

A large impact

In 2022, not-for-profits successful British Columbia bought conscionable 2 per cent of multi-family homes successful the province. But past year, due to the fact that of the provincial fund, they bought astir a 3rd of multi-family units that came up for merchantability — much than a 30 per cent increase.

"Not-for-profits person ne'er truly been capable to vie against large firm landlords due to the fact that they simply bash not person the funding," Maschleko said. "We're changing that."

According to lodging and argumentation adept Steve Pomeroy, the astir caller census information had shown Canada mislaid much than 550,000 affordable lodging units betwixt 2011 and 2021. The units themselves are inactive determination — they are conscionable nary longer affordable.

There are varying ways to specify affordability, and it besides depends connected perspective. Statistics Canada defines it arsenic lodging costs that instrumentality up nary much than 30 per cent of a family's gross income. 

"The operation affordability tin beryllium defined successful galore antithetic ways — determination is simply a wide scope betwixt idiosyncratic who tin spend 3 oregon 4 100 dollars a period to idiosyncratic who tin spend 3 1000 a month," Pomeroy said, noting that Statistics Canada defines it arsenic having lodging costs that instrumentality up nary much than 30 percent of the household's gross income.

To enactment it successful perspective, close present the nationalist mean rent for a one-bedroom portion is astir $2,200 per month. So, to conscionable the Statistics Canada definition, helium said, the household would request to marque astatine slightest $88,000 a year.

Working against the lodging crisis?

But not everyone believes that conservation is the mode forward. 

"It sounds bully connected paper, but successful world is really a unspeakable idea," said Andrey Pavlov, a prof successful existent property concern astatine Simon Fraser University successful Vancouver. "It is amended to instrumentality the wealth and propulsion it successful the ocean."

Instead, helium said each authorities backing should spell toward caller builds, not purchasing existing buildings.

WATCH | This existent property prof says Ottawa needs to physique caller housing, not bargain aged buildings:

"If you support a gathering that is 3 storeys alternatively of tearing it down and gathering it to beryllium 30 storeys, you are really moving against the lodging crisis," Pavlov said. "We request to physique a batch more. We're not keeping up with our ain colonisation growth, fto unsocial radical who privation to travel here." 

And helium said the nationalist money volition marque it harder for Prime Minister Mark Carney to fulfil his committedness to physique 500,000 much units a year.

To physique that galore units, you "need the onshore to physique connected successful areas wherever radical privation to live," Pavlov said. "This money is protecting small-scale buildings that successful galore cases could connection an accidental to spell overmuch higher."

Several buildings the B.C. money has helped non-profits get person already generated disapproval for preserving debased density successful areas that request it to beryllium overmuch higher.

Now is better

But for Maschleko the B.C. money is 1 portion of fixing the lodging situation — and she said it's a no-brainer. 

"It is overmuch much cost-effective to support the affordability that already exists than to effort to recreate it erstwhile it has been lost," she said. 

She points to the precocious outgo of building, suggesting that the lone mode to support caller units affordable is for the authorities to support subsidizing those tenants.

"You're spending important nationalist wealth twelvemonth implicit twelvemonth to support that affordability debased versus being capable to marque this one-time investment," she said. 

Coffey besides agrees it can't beryllium the lone approach, but that rental extortion funds wrong each levels of authorities are necessary.

In the clime of tariffs we tin prime up an plus astatine astir fractional the terms of gathering thing new, Coffey said. "We request a multi-pronged attack to driving solutions to this lodging crisis, that is however we volition get determination faster."

WATCH | How does B.C.'s rental extortion money work?: