Vancouver city council debates building rental units

The Vancouver city council was debating on Tuesday whether to create a city-owned corporation that would build rental units as a way to generate revenue for the city.

The motion failed to get two-thirds of the vote, with all four non-ABC councillors in opposition to the idea.

The plan would have transferred six city-owned land sites, worth $411 million, to the new development corporation, fully owned by the city.

The corporation would have then been tasked with developing an estimated 4,000 units of market rental housing to create a source of revenue for Vancouver.

“It will generate revenue that will go to the public benefit, we talk about infrastructure deficit, housing, other programs,” said Mayor Ken Sim during Tuesday’s council meeting.

Brad Foster, the director of the Vancouver Housing Development Office, backed Mayor Sim when he told council the units would provide significant revenues to the city on an annual basis once they are built.

However, Councillor Pete Fry says the motion was voted down due to a lack of transparency.

“The mandate of this GBE (Government Business Enterprise) is simple and clear. It’s to make money. The revenues are going to be predictable, and those revenues can be used as a council sees fit,” he said during the council meeting.

“All I see is a mandate to make money, and for that basis alone, I just can’t simply cannot support this work and direction.”

He criticizes the motion for not tackling the affordability crisis.

“There is no mandate to support affordability for people who live and work in our city. I mean, theoretically, these revenues could offset taxes for some, but not universally and not equitably.”

Additionally, housing experts warn that instability in the housing market could lead to potential losses on the city’s side of the project.

“The rationale that they are giving does not seem to be very sound right now, given the real instability in the market,” said Professor Penny Gurstein, Director of the Housing Research Collaborative at UBC.

“Thousands of units, condominium units that are unsold right now.”

Even a report to city council says that there is risk involved in rental housing development and operation, “ranging from subpar returns on investment to actual financial loss.”

But the report also says those risks can be reduced with proper safeguards.

Gurstein disagrees, as she is not convinced that the city is up for the job of becoming a landlord.

“I think this is a really bad time to be doing this. I don’t think this is a good idea at any time, but I think this is a particularly bad time to be doing this, and I don’t think that the city has the skills to be working as a developer on this.”

The report to council also states that the plan would require approximately $ 8 million in startup costs.

“I just don’t see the long range, what they’re forecasting, it would come to fruition, given again the instability right now,” Gurstein says, additionally criticizing the lack of affordable housing.

“The fact that we really do need affordable housing, which is what I think they should be using the land for.”

Council is expected to make a decision later today.

With files from Ashley Joannou, The Canadian Press.