A recent *Globe and Mail* article raises a critical question: Is British Columbia's $500-million Rental Protection Fund (RPF) truly achieving its goal of preserving affordable housing? The RPF was established to prevent older apartment buildings from being redeveloped into market-rate units, thus protecting low- and middle-income tenants from displacement. However, experts and commercial property brokers have raised concerns about whether the fund’s resources are being used efficiently (Pomeroy, 2024).
A primary concern centers around potential overpayment for properties. Housing researcher Steve Pomeroy, a strong proponent of government intervention in housing, warned that nonprofits might be overpaying for buildings, which could significantly reduce the program's long-term impact. “Maybe they’re not being forced to be as efficient as they could be,” Pomeroy noted, cautioning that high prices might be driven by a sense of urgency to use up the fund (Pomeroy, 2024). In one instance, three buildings in Port Hardy were purchased at prices significantly above their assessed value, leading to questions about the effectiveness of the fund (*The Globe and Mail*, 2024).
Commercial broker Chris Hayne, a multifamily specialist and Associate Vice President at CRE Investment & Development Team at Royal LePage Commercial, highlights this disparity. He has listed a 71-unit rental building in Port Hardy for $4.3 million, or $60,663 per unit. In comparison, RPF-funded purchases in the same area cost around $130,000 per unit, suggesting that the fund may not be securing the best possible deals (Hayne, 2024).
Further skepticism comes from industry figures like Mark Goodman, a commercial broker, who publicly questioned the RPF's purchase of properties near a Coquitlam SkyTrain station, an area designated for high-density development under provincial Bill 47. "The potential for density in that area is huge," Goodman argued, suggesting that using the fund to block redevelopment in such high-growth areas might contradict the province’s overall housing strategy (Goodman, 2024).
Aly Jiwan of Redbrick Properties was even more critical, describing recent RPF acquisitions as “taxpayer money wasted.” He argued that some of the properties purchased with the fund were overpriced and questioned the program's overall effectiveness in addressing BC’s housing crisis (Jiwan, 2024).
Developer Hani Lammam, Executive Vice President at Cressey Development, offered a more balanced view. While he agreed with the goals of the RPF, particularly in areas with limited redevelopment potential, he also questioned its use in regions like Coquitlam, where redevelopment could provide greater housing density. "To prevent redevelopment, that doesn’t seem the best use of funds," Lammam commented, supporting the program's role but urging a more strategic approach (Lammam, 2024).
As the RPF continues to evolve, the question remains: Is it truly helping to protect affordable housing, or are there more efficient ways to allocate the $500 million set aside for this cause? While the initiative has helped secure some properties, ongoing scrutiny from industry experts like Hayne, Goodman, and Jiwan suggests that improvements in management and strategy may be necessary (*The Globe and Mail*, 2024).
Contact Chris Hayne, Multifamily Specialist and Associate Vice President at CRE Investment & Development Team, for more information on this topic.
References: Critics question whether B.C. fund to protect affordable rentals is being used wisely - The Globe and Mail: www.theglobeandmail.com/real-estate/vancouver/article-critics-say-bc-fund-to-protect-affordable-rentals-is-being-misused/
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