British Columbia's Rental Protection Fund Announces Inaugural Acquisition
The Fund’s announcement marks the first acquisition and sets the stage for what's to come through the use of strategic equity contributions to ensure housing security and attainability
February 08, 2024 12:30 ET| Source: Rental Protection Fund
COQUITLAM, British Columbia, Feb. 08, 2024 (GLOBE NEWSWIRE) -- Today, the Rental Protection Fund (the Fund) and the Province of British Columbia announce the Fund’s inaugural housing acquisition. This announcement marks the transition of 290 co-operative housing units into non-profit mission-driven ownership with the Community Land Trust of B.C. and a new legacy of community-held assets that protect housing outside of market forces in perpetuity.
The Fund has committed an equity contribution of up to $224,000 per home to protect these homes and preserve the co-op tenure and a renewal grant of $22,000 per home to support building renewal costs to extend its useful life. This impact is further multiplied by a contribution of $5.8 million from the City of Coquitlam. It is far easier to maintain affordability than to achieve it once it has been lost, and with this investment, these buildings will be able to operate sustainably and affordably, without ongoing subsidies, for decades to come.
“The impact of the Rental Protection Fund can already be seen and felt – and these are just the first of thousands of homes will grow our Community Housing sector while freeing up capital that can be redeployed into new supply,” said Katie Maslechko, CEO of the Rental Protection Fund. “This is a transformative model to address the housing crisis that is already delivering results – enacting real change both quickly and effectively by preserving attainable housing for those at risk of losing their housing security.”
Every dollar invested through the Fund not only moves into the community housing sector but is leveraged within it, growing the capacity of our non-profit, co-op and indigenous-led housing providers. To date, the Fund has approved funding to preserve nearly 700 homes across British Columbia that will be announced in the coming months that leverages over $150 million in private capital, with more than 2,000 homes in the pipeline for funding consideration and nearly 100 community housing sector applications in less than six months since launching applications. Over the next year, this could see the expansion of the community housing sector by over $1 billion dollars, all for a fraction of the cost of building new.
Community housing is more than a social good, it is also critical economic infrastructure, according to a new report from Deloitte Canada commissioned by the Canadian Housing and Renewal Association (CHRA) and Housing Partnership Canada, which found that increasing the community housing stock by just 1.5 percent would contribute as much as an additional $136-billion to Canada’s GDP. Like roads and bridges, community housing is a long-term asset that contributes to the overall development and prosperity of our country.
“For every new affordable home we create in Canada, we’re listing 11 affordable rents in the private market – we’re actually falling behind. Acquisition programs help us protect tenancies and stabilize rents – we need to see this everywhere in Canada,” shares Ray Sullivan, Executive Director, Canadian Housing and Renewal Association. “Moving apartment buildings into non-profit and co-op ownership protects tenants and stabilizes rents. British Columbia is showing leadership that the rest of Canada needs to follow.”
Recently, a broad cross-section of community housing, private sector and philanthropic organizations aligned behind a federal budget proposal that builds on the proof of concept established by the Rental Protection Fund in British Columbia but showcases how this process can be applied at a national level. The proposal would capitalize the Canadian Housing Acquisition Fund, a solution ready to deliver an acquisition facility that is cost-effective, fast, scalable, and flexible — and through which public, private philanthropic and non-profit organizations can work together toward the creation and preservation of affordable housing.
In the Canada Mortgage and Housing Corporation’s (CMHC) January 2024 Rental Market Report, the need for these solutions is becoming more paramount, as Canada witnessed record-low vacancy rates (1.5%) and record-high average rent growth (8.0%) in 2023. Overall rent growth also outpaced wage growth, decreasing affordability, while low-income renters among the country's major markets are most at risk for affordable housing options due to below-average vacancy rates.
“Far too many renters live in fear that their homes will be sold out from under them,” said Premier David Eby. “That’s why we created the Rental Protection Fund to defend people’s homes against profit seeking speculators like big real estate investment corporations, and preserve safe, secure and affordable homes for generations to come. This landmark acquisition protects 290 affordable homes in the heart of Coquitlam, ensuring people can continue living in the community they helped build.”
The first acquisition of 290 housing units at the Coquitlam co-operatives showcases the value of investing in innovative solutions like the Fund and the transformative impact of community-held assets. The most affordable housing we have is the affordable housing we’ve already got — and preserving existing rental units is one of the fastest and most impactful ways to quickly and meaningfully address the housing crisis.
About The Rental Protection Fund:
Endorsed by the provincial government with a groundbreaking investment of $500 million, the Rental Protection Fund stands as B.C.'s direct response to the housing crisis. Under the leadership of CEO Katie Maslechko, the Fund is dedicated to protecting tenants and ensuring the availability of affordable rental homes for future generations. By providing capital contributions to non-profit housing organizations and cooperatives, it facilitates the acquisition of existing rental buildings. This initiative is committed to maintaining housing affordability and stability for renters in B.C. in the long run. Those who wish to have a property considered for acquisition through the Rental Protection Fund can submit them at www.RentalProtectionFund.ca