British Columbia's social housing shell game

by John Irwin, Canadian Centre for Policy Alternatives

It seems barely a day goes by without a news story about BC's hot real estate market and booming residential construction. People are buying up homes faster than you can say “interest rate hike,” and as prices rise, home ownership is becoming more expensive—and elusive—for many British Columbians. What about the thousands of people who can't afford to rent a home, let alone buy one?

Lack of affordable housing is not a new problem. Through most of the 20th century, we tried to address it by building social housing—co-op, non-profit, public and urban native housing projects for people who cannot afford market rents, funded jointly by the federal and provincial governments. But in 1993 the federal government slammed the door on money for new social housing. BC, to its credit, was one of only two provinces that continued to build new units, significantly expanding the overall stock during the rest of the 1990s.

Beginning in 2001, however, under BC's new government, the story got more complicated. The province has turned funding for social housing into a shell game, employing some clever slight-of-hand to mask what's really going on. Here's how it works:

In 2001, the federal government finally came back to the table with $89 million in one-time capital funds for new social housing to be used over five years—good news on the face of it.

BC's new provincial government used some of this money to complete 3,400 new units of social housing that had been promised by its predecessor. And it continued to fund the maintenance and operation of existing units. But it put an end to BC's long-standing commitment to expanding the social housing stock—as of 2005, there are no plans for regular, ongoing funding to build new units.

In the meantime, more than half ($51 million) of the $89 million in federal capital funds is being channeled by the province into the health care system for assisted living. Assisted living provides supported living for the frail elderly and people with disabilities. It is not social housing for people with low incomes.

The province counts the same new units as assisted living units, long-term care beds, and social housing units, depending on which Ministry issues the press release.

The provincial government is effectively using federal money earmarked for social housing to help meet its election promise of thousands of new intermediate and long-term care beds. Sadly, it is still failing to meet this promise because it is substituting more “cost-effective” assisted living units for long-term care facilities. It is also cannibalizing the existing stock of both social housing units and long-term care beds by converting them to assisted living spaces.

BC Housing (the provincial housing agency that manages and delivers affordable housing) will acknowledge that federal social housing funds are going into assisted living. But it claims this is appropriate because our aging population is in need of such supports. This may be true, but the shift from providing social housing to people with low incomes—those in economic need—to providing assisted living for those with health care needs is a fundamental change that British Columbians should be worried about.

Demand for social housing is going unmet at a time when the price of housing is rising. Since 2000, rents in the Greater Vancouver region for a one-bedroom apartment have increased by 7.7%; in Victoria they have increased by 7%; in Kelowna by 10%. And the province recently made changes to the Residential Tenancy Act that allow annual rent increases of 2% plus inflation (a 4.6% increase in 2004).

These rent increases are likely to put greater pressure on low-income earners and will drive up the demand for social housing. Roughly 65,000 households in BC spend more than half their income on rent. There is a serious danger that as rents rise and the supply of social housing shrinks, more and more families will be pushed out into the street, or into substandard rental housing. We already know that both homelessness and social housing wait lists have grown in the past two years. If no new social housing is built, both these trends will continue.

Even from a bottom-line economic point of view, abandoning social housing is penny-wise, pound-foolish. A 2001 study—sponsored by the provincial government—showed that it costs much more to provide services and shelter to homeless people than it does to provide social housing. Safe, adequate and affordable housing also provides a vital foundation for physical and mental health and the ability to find and keep a job.

Without a renewed commitment to social housing, BC will literally leave many of its citizens out in the cold.

****