On Thursday, BC Premier David Eby and Minister of Housing Ravi Kahlon announced the creation of a $500M Rental Protection Fund, following through on one of the actions Eby outlined during his campaign.
The Rental Protection Fund, which Eby initially called the Rental Housing Acquisition Fund during his campaign, will provide one-time capital grants to non-profit housing organizations to purchase rental buildings and co-ops that come up for sale, shielding them from being acquired by speculators.
The one-time $500M investment will jumpstart the fund, which is then expected to pay for itself through rent income accumulated from the acquired buildings, subsequently allowing those non-profits to acquire more buildings.
"Today, we're taking action to protect renters who found an affordable place to live, but are worried their building will be bought out from underneath them," Eby said during Thursday's press conference at a co-op building in Burnaby. "This fund will allow non-profits to secure older rental buildings and protect vulnerable renters from speculators who can drive up rents and evict tenants who have lived there for years. Instead, community non-profits will now be able to work with tenants to make improvements or expand to house more people, and at the same time protect affordable housing."
Eby has consistently taken aim at institutional investors, as well as multi-national corporations and flippers, previously calling them "frauds, cheats, and criminals" that are profiting off of the province's housing crisis.
READ: Rental Market Will Tighten in 2023, But Investment Will Remain Strong
In a press release, the Province emphasized that older rental buildings are increasingly being bought up by speculators like real estate investment trusts, whose business models often include redeveloping properties, resulting in tenants being evicted to create newer, more expensive units.
Eby choosing to make this announcement in Burnaby is significant because of Burnaby's province-leading protections for renters, which include allowing renters evicted due to redevelopment to return to the newly-constructed building at the same asking rent. The protections were created after Burnaby developed (literally and figuratively) a reputation for "demovictions," and the City has continued to strengthen them.
The Province also noted that "aside from the new construction of rental housing in recent years, the loss of rental stock from redevelopments has made the net number of purpose-built rental units in BC comparable to what it was in the early 1990s, while the population has grown by 50%." With the new Rental Protection Fund, the Province is hoping to bring the rental supply into the 21st century.
The Fund will be managed the Housing Protection Fund Society, which consists of the BC Non-Profit Housing Association, the Co-operative Housing Federation of BC (CHFBC), and the Aboriginal Housing Management Association.
"This is a groundbreaking move by the Province," said Thom Armstrong, CEO of the CHFBC. "Slowing the loss of affordable rental homes by taking them out of the market and protecting them forever in the community-housing sector will make life much more affordable for renters everywhere in BC. This is the best thing the Province could have done to maximize the net impact of the affordable new supply it is already investing in."
The Province says that the fund will be financed prior to March 31, 2023 and will be operational in the coming months. It's expected to protect thousands of affordable housing units throughout BC.
