Posted on April 6, 2017
Auditor General pinpoints concerns about BC Housing’s Non-Profit Asset Transfer Program
BC Housing’s Non-Profit Asset Transfer Program may not provide long-term protection for social housing stock, says BC’s Auditor General, and could cost taxpayers more than it generates in benefits.
Last month’s report by Carol Bellringer has confirmed many of the fears expressed by housing advocates — including elected officials — since it was unveiled two years ago.
The program is strongly supported by the BC Non-Profit Housing Association and was stoutly defended by BCNPHA director Kishone Roy in an interview this week.
Indeed, many leading non-profit housing organizations have been itching to be free of provincial constraints, take control of their own destinies and expand their housing stock.
The new program allows that by effectively selling non-profits the land on which their housing sits. The cash they pay to BC Housing is used to trigger new construction, particularly through partnerships possible with new federal funding. So far, BC Housing has generated $250 million in cash for new investments.
But Bellringer confirms many of the worries I have heard expressed by elected officials, particularly those who were briefed on the program at the Metro Vancouver Housing Committee last year.
- the likely loss of “rent geared to income” units, the most affordable of all, in new housing projects;
- the increased reliance on rental supplements, which help families find housing in the private market, but provide no control over the quality of the housing;
- the possible loss of land, now in public ownership, as the new non-profit owners go out of business or sell;
- the lack of capacity in smaller non-profits to undertake the complex and risky business of redevelopment, which could result in their collapse.
To make the whole scheme work, BC Housing must subsidize non-profits to pay for the mortgages they require to buy the land. Over time, this creates a $1 billion long-term cost commitment for the province.
Bellringer concluded, after reviewing BC Housing’s numbers, that “the transfer of assets could result in a financial cost, rather than a financial benefit.”
When every dollar counts, that’s bad news.