Premier announces $500-million fund to help non-profits buy rental buildings and co-ops

The BC government is stepping up to help non-profit housing providers buy rental buildings and co-ops in order to preserve their affordability

The $500-million Rental Protection Fund (RPF) will provide capital grants to help non-profits compete with private sector buyers—including real estate investment trusts (REITs), which contribute to evictions, rent hikes and homelessness, according to Premier David Eby.

“Preventing people from getting evicted and seeing their former homes redeveloped into out-of-reach luxury condos or high-end housing is one of the key purposes of this fund,” he said.

Establishing a strategy to acquire and maintain existing affordable rental housing was something Eby promised during his recent campaign to be premier.

Eby estimated the RPF could be distributing grants within three months, using funding already included in this year’s budget. While details on how the fund will operate are not yet available, Pacifica Housing CEO Carolina Ibarra said anything that can help lower costs for non-profit housing providers will be helpful.

Like individual homeowners, non-profits have to come up with a down payment when buying a property and the bigger the down payment, the smaller the mortgage payments on the property. A grant that helps bolster the down payment, then, would make it more affordable to run the properties.

“If we can reduce the monthly costs to own these properties and maintain them, that's going to translate directly to savings for the tenants,” Ibarra said.

Other financial support will still be needed—whether from programs like the City of Victoria’s Housing Reserve Fund or from private backers. The province plans to help grant recipients secure private support in a bid to ensure rents do not need to be raised in order to cover financing and operating costs.

The fund will be run by a society made up of three non-profit organizations: the BC Non-Profit Housing Association (BCNPHA); the Co-operative Housing Federation BC, and the Aboriginal Housing Management Association (AHMA).

“I think that is especially important,” said Ibarra, who emphasized the benefit of increased support for non-profit Indigenous housing—like the kind envisioned in AHMA’s Indigenous housing strategy.

“Of all the parts of the community sector, the Indigenous part often faces the biggest barriers,” she said. “I do want to emphasize that this [fund] is really remarkable. It's very, very positive.”

Over the long-term, Ibarra suggested the fund’s success will best be measured over multiple metrics, including how many units the non-profit organizations are able to buy and keep.

“The other measurement is whether [there is] any revenue and how that's being reinvested in the community,” she said. “So, how many of those properties are being leveraged to create more units through redevelopment?”

‘A critical piece’ to addressing rental affordability

BCNPHA CEO Jill Atkey put BC’s rental affordability crunch in stark terms.

“Eight hundred and fifteen dollars is what's considered affordable rent for someone working full time [and earning] minimum wage,” she said. In Victoria, two-bedroom rentals were going for more than three times that amount as of last month, according to rentals.ca.

Atkey also estimated BC lost over 97,300 units that rented for under $1,000 per month between 2016 and 2021.

During the 2022 municipal elections, Ibarra and other non-profit housing providers on Vancouver Island released six calls to action for local governments to address housing affordability. Even with more affordable housing being created and preserved, Ibarra says maintaining housing affordability over the long term will also require action from the other levels of government.

“I don't want to sound negative—because this [announcement] is huge—but municipalities also need to come in with property tax exemptions,” she said, adding that the rising interest rates have made the math lean further away from affordability for the nonprofits. “That’s where I think the federal government can come in.”

While acknowledging local politicians may have concerns about cutting into tax revenues that go toward services, Ibarra suggests policies aimed at increasing non-profit housing options should be viewed as an investment necessary to support population growth and health.

“You are allowing the growth, the attraction of people to live and work in the area who are going to pay taxes and help businesses grow,” she said. “You can either see it as a cost or you can see it as an investment in your community.”

Ibarra also wants to see funding to support deeply affordable housing—which requires ongoing subsidies in order to exist—in this year’s budget.

“That remains and will remain extremely difficult to achieve without capital grants and operating subsidies,” she said. “I see that as the main missing piece.”