Cracking the housing puzzle: What Victoria could learn from other cities

Germany, Austria pose potential models for solving Victoria’s “mismatch” of residents' incomes and rental prices In a city with no shortage of divisive issues, there’s one thing on which many people in Victoria can agree: this city is facing an affordability crisis.

Victoria is consistently ranked among the most expensive cities in the country to buy a home, and was even dubbed the 16th least affordable city in the world in 2020.

This is felt across the housing spectrum—from families who can’t afford their first home, to university students unable to find space to rent in an overcrowded rental market, to seniors and people with disabilities facing homelessness when their fixed incomes are unable to meet the high rental costs.

“There's a real mismatch between people's incomes and housing prices,” said Penny Gurstein, BC Housing board member and director of the University of British Columbia’s Housing Research Collaborative.

There was a time when Canadian governments played a significantly larger role in housing, building about 550,000 units of public housing between the mid-1960s and the 1990s. No longer—the federal government withdrew funding for public housing by 1993, and since 1995 BC and Quebec have been the only provinces to fund new public housing. Just one in 60 Canadians lives in publicly owned housing today, according to Statistics Canada.

That’s not the case everywhere. Cities worldwide have been grappling with similar crises as Victoria, and they have come up with solutions that, for Canadians used to private provision of housing, can seem radical.

But looking at how other countries are managing their housing crises may present a path forward for Victoria, according to Alexander Vasudevan, associate professor of human geography at Oxford University.

“From a Canadian point of view, I think it would be really exciting to have this conversation about public ownership and building affordable housing,” Vasudevan said.

“If there was ever a time to really move forward on this, I think the time is now. I don't think the [current] model is sustainable.”

Berlin

In September, Berlin’s city government spent 2.46 billion euros purchasing 14,750 apartments from two major corporate landlords, with the promise of converting them to publicly owned accommodation. This brings the city’s total number of government-owned dwellings to 355,000, or a fifth of the total rentals available in the city, and is part of the city government’s strategy of buying back privately owned dwellings that were formerly public housing.

The announcement came just months after a citywide rent cap was overturned by a court ruling, causing over a million renters in Berlin to have to pay back thousands of dollars in rent they had previously saved due to the cap. Rents in Berlin have risen 30% since 2015, and more than 75% since 2010.

Fuelled by rising costs, a campaign emerged in favour of bringing rental properties owned by corporate landlords into public ownership. A historic, non-binding referendum in September saw 56.4%, a total of 1,034,709 people, vote in favour of the government buying 240,000 units from corporate landlords. In the model proposed by campaigners, part of the money the government would gain in rent from the new housing units would be put towards building new public housing.

Public housing rent costs in Berlin have risen in recent years, Vasudevan said, and in some cases the cost can be higher even than private housing. This has coincided with the sale of about 270,000 units of publicly owned housing over the past two decades.

“There is a long history of tax relief and loans to private developers (stretching back to 1960s) who built social housing and would lift fixed rents once those loans were repaid,” Vasudevan wrote in an email.

The renter-organized campaign looks to lower rents through bringing more housing into the public sector, while also building more public housing.

One BC member of parliament, Don Davies, NDP, from Vancouver Kingsway, signalled his support for Berlin’s purchase of private housing in a tweet.

“This is a creative and bold way to deliver affordable housing,” he wrote. “Why can't we do it in Canada?”

Renters make up a far higher percentage of the population in Berlin— 85% of the city’s 3.56 million Berliners are renters, compared with 61% of Victorians.

Public housing has also seen success in other European cities, including Vienna, where families, singles, and seniors coexist in well-maintained, mixed-income housing central to the city’s amenities.

Vasudevan, who is familiar with the BC housing and rental markets from his time at the University of British Columbia, cautioned that implementing a European-style public housing system isn’t a copy-and-paste process; Canada’s political and cultural systems present different obstacles than those seen in Germany or Austria.

But even if we can’t fully adopt a similar system in the immediate future, experts, officials, and local housing advocates say there are lessons that Victoria could learn from these models.

Building utopia?

Finding an affordable place to live, even among those subsidized by the government, isn’t easy. A 2019 study by Statistics Canada found that nearly two-thirds of the 283,000 households on waitlists for affordable housing across the country had been waiting at least two years.

Victoria Mayor Lisa Helps says she has witnessed a culmination of several factors that contributed to the city’s current housing crisis.

“There's not enough affordable housing and there's not enough housing for the people who need it,” Helps said. “So it's in part a supply issue, but it's also in part a government investment issue.”

When it comes to combating this, she said that local cities like Victoria are “creatures of the province” and have little power compared to their European counterparts in taking sweeping action on housing.

There is, however, a program already in motion that Helps likens to public housing in Vienna, run by the Capital Regional Housing Corporation.

The South Island-based group, owned by the Capital Regional District (CRD), is the largest publicly owned housing provider in the region. It pales in comparison to its European counterparts—it currently manages 49 housing complexes across seven municipalities, and has five new housing development projects in the works—but it’s providing some sliding-scale housing in a market that is otherwise completely out of reach for lower-income residents.

Housing is offered based on residents’ incomes, with the lowest monthly rent set at the income assistance rate of $375 each month.

According to Helps, all the new residences being built will have 20% of their units rented out at $375 each month, while another 30-40% will rent for 30% of the low- or moderate-income person’s income. Other units, she says, will be rented for 10% below their market value to subsidize the lowest income residents.

“Each building is kind of like its own ecosystem,” said Helps, who recently stepped down from her position as chair of the Capital Regional Housing Corporation after three years.

The Capital Regional Housing Corporation’s housing capacity is rapidly expanding—Helps said they plan to have 3,500 units under their domain by 2025, up from 1,300 units in 2016—but not fast enough to meet the high demand for low- and middle-income housing.

Currently, only about 1% of residents in the CRD reside in housing through the Capital Regional Housing Corporation, a far cry from the 25% of Vienna residents who live in publicly owned housing.

“So the model is there,” Helps said. “It's just not as scaled up.”

Next year, the Regional Housing First program will conclude its partnership between the CRD, federal government, and BC government to create close to 2,000 affordable housing units. They didn’t even come close: at the moment, just over half of that planned supply (1,011 units) are completed or in progress.

In James Bay, a housing project on Michigan Street was first “identified as a priority” in 2016. It was set to begin construction in November.

One factor that limited this program, however, was the spike in construction costs and supply chain issues during the pandemic. Some of the limitations are even more basic: on Salt Spring Island, the Croftonbrook housing development has been delayed and costs have been added to its construction because of the local water utility’s strict moratorium on new hookups.

Protecting existing spaces

Local advocates for affordable housing and renters rights are critical of an approach to solving this crisis that focuses heavily on building new housing.

“It's just disconcerting that the answer, always, is supply. Why is the emphasis so heavily on supply and not preventing the increase of costs for the existing stock?” said Patrick Corbeil, a board member of the Victoria Tenant Action Group (VTAG).

In the absence of a robust, widespread network of public housing, Corbeil said that one of the major ways governments can help residents cope with ever-rising housing costs is by controlling the rent landlords charge their tenants.

Currently, the only form of rent control in Victoria is set based on lease terms. Once a lease is in place, landlords can only increase by a percentage set by the province every year. It will be 1.5% in 2022. But if a tenant was to move out or sign a new lease, their rent could be raised without regard for that limit, meaning that most units, over time, tend to become more expensive in lockstep with the market.

B.C. currently has laws intended to prevent landlords from ‘renovating’ tenants, but this does not prevent landlords from changing the rental rate following the completion of unit upgrades. In October, Victoria City Council voted to suspend development of a bylaw regarding renoviction tenant protections and rental affordability until January 2022.

Prior to the pandemic, VTAG commissioned a study to see the overall rise in rent cost for tenants across the city.

“Back in 2014, we saw about a total 2.2% annual change. By 2018, we were looking at a 9.1% total increase in rent in the city—that's connected to the lack of vacancy control,” Corbeil said. “So the government can say [it’s capped at] 3.1 or 3.2%, but in reality the actual rate of increase in the city is closer to 7, 8, 9, and 10%.”

In the past year, according to a Rentals.ca study, average rents for listed units rose nearly 20% in Victoria.

A more effective form of capping rent prices, Corbeil feels, would be to tie the rent increase to certain units rather than individuals’ leases.

But in Victoria, where renters are not a united and organized majority as those that fuelled the referendum in Berlin, advocates and experts suspect a campaign for this policy may be politically out of reach.

“The moment you mention rent control, some people throw the toys out of the pram and say no, because that means that a lot of landlords will just sell their properties,” Vasudevan said.

“I think there will need to be buy-in at a municipal level, and that's where it becomes tricky.”

Gurstein offers an alternative model for implementing affordability through the Co-operative Housing Federation of BC’s use of community land trusts.

“It ensures that when you're building housing, that this housing is going to be affordable in perpetuity,” she said. “Because the issue is the cost of the land.”

In the long term, however, Gurstein said that Canada is in need of a shift in its societal attitude toward renters to solve this problem. With many middle income renters unable to apply for existing publicly owned housing, she feels there need to be more policies protecting those living in rentals owned by private landlords.

“You actually have to have policies that support renters and rental units as well as encouraging homeownership,” Gurstein said. “And that doesn't seem to be what the federal government is really interested in.”

A more equitable future

Kishone Roy, former CEO of the BC Non-Profit Housing Association and author of ​​ Make Housing Central: British Columbia and the Affordable Housing Crisis, finds it hard to blame the city or residents of Victoria for the crisis they feel a 20-year freeze in provincial policy has brought on.

“I feel like there's a big detachment between the basic necessities of life that people need to get by here and the government's willingness to offer those,” they said. “It's heartbreaking.”

The best way to pursue a more equitable housing future, Roy feels, is to put Indigenous leaders at the heart of the decision-making process on their traditional territories.

On the lower mainland, this is already starting to play out. The Squamish Nation has begun plans on a mixed-use development, named Sen̓áḵw, that is estimated to be completed in 2030. The 11-tower development and adjoining park, according to current plans, will be car-free and sprawling with greenery.

Built on traditional territory they regained after a legal battle with Canadian Pacific Railway, the Squamish Nation plans to build 6,000 new units within the towers—including space for hundreds for members of their nation. A majority of the units will also be rented out.

As for Victoria, Helps says it will take “massive political courage” on behalf of BC’s housing minister to institute the changes she thinks will move BC in the direction of Berlin and Vienna.

First, she hopes they will remove the need for rezoning to build housing that fits within a city’s official community plan—buildings like fourplexes or duplexes in areas currently dominated by single-family homes. It will remove direct public input from many individual housing projects. This move, which is already showing signs of pushback, is something she feels will ultimately “depoliticize” the process of building housing.

In addition, Helps is urging the province to create a large funding program for non-profit housing corporations to buy existing rental housing and turn them into publicly owned affordable housing in perpetuity. No model for this is currently available, Helps said, but it’s something CRHC staff will be exploring in 2022.

“I think those two things would go a long way,” Helps said

Corbeil notes that public housing currently carries negative connotations as “ghettoized” housing for the poor. But normalizing and expanding the system, as well as patching holes in protection systems like the Residential Tenancy Branch, may one day offer middle-class renters freedom from the whims of their private landlords and the vagaries of the runaway market.

“If we can work along the lines of decommodifying housing, we can take away one of the biggest threats to people's ability to have a dignified life,” he said.