Vancouver Community Land Trust Foundation: Examining a model for long-term housing afordability

Abstract

This case study examines the Vancouver Community Land Trust Foundation (Land Trust), a project being implemented in Vancouver, BC by a consortium of non-profit organizations, social finance1 institutions and the municipal government. The case study was created in order to describe and examine the Land Trust as a potential model for providing long-term affordable housing without senior government funding or ongoing operating subsidies. Metro Vancouver is experiencing a crisis in housing affordability and there is a need for innovative solutions to the crisis. It is hoped that this case study will be useful for governments, non-profit organizations, social finance institutions and other actors that may be interested in replicating the model in Metro Vancouver and beyond. The Mayor’s Taskforce on Affordable Housing, and a resulting Request for Expressions of Interest (RFEOI) put forward by the City of Vancouver in August 2012 provided the catalyst for the consortium of non-profit, social finance and professional organizations to come together under the umbrella of the Land Trust. However, in the years prior to the Taskforce, these same actors had all been looking at the big picture of affordable housing in the region, and putting in place the structures that enabled them to quickly come together with the innovative Land Trust model when the RFEOI was issued. The overall initiative can be seen as the result of strategic actions by and between various actors converging in the emergence of a strategic social-public2 partnership – a collaboration between the municipality and social actors for the long-term delivery of affordable housing. The Land Trust project provides 358 units of non-market rental housing on four sites. The City of Vancouver is leasing the land at the four sites through 99-year leases at a nominal rate. The Land Trust, a non-profit organization established by the Co-op Housing Federation of BC, is the lead proponent in the project. Non-profit and co-operative organizations will operate units for a diverse range of tenants, including low-income families and individuals with mental health and / or addictions. A key feature of the project is a ‘portfolio approach’ that is enabling efficiencies in developing and operating the site, as well as enabling cross-subsidization from higher rent units to lower end of market units across the portfolio. Units will rent at varying levels of affordability ranging from units for those living on incomeassistance to units renting at close to market rates. Overall units will rent at an aggregated maximum of 76% of market; within this aggregate, rents will range from 23% of market rents to 90% of market. The core commitment of the Land Trust to providing affordable housing, and agreements with the City on affordability requirements ensures long-term affordability. Construction is due to start on the first two projects in the spring of 2015, with completion and occupancy in 2017–1018. No one piece of the financing structure unlocks affordability; rather, it is the collective impact of all the different kinds of investment, combined with the cross-subsidies built into the business model that make it work. In particular, the City of Vancouver’s investment through the discounted land-lease along with the strong participation of social finance institutions stand out as critical features of the project’s funding. As well, the agreement between the City and the Land Trust anticipates operating surpluses that will be used for future expansion of affordable housing. Surpluses will be split between the Land Trust and the City of Vancouver. In addition to reinvestment in new affordable housing units, surpluses can also be used to deepen affordability for low and moderateincome people living in the existing Land Trust units. The potential for replication of the Land Trust model is unfolding in the context of the transfer of provincial land assets to social housing organizations starting in 2014 as well as the end of Canada Mortgage and Housing Corporation’s operating agreements and their related mortgages. The Land Trust may provide a model for non-profits, co-ops, municipalities and other actors to leverage under-developed land that is already owned by the community or municipalities for affordable housing without ongoing government subsidies. The case study identified significant strengths in the model as well as some initial lessons learned. In particular, replication of the model will require commitment and leadership from government and social finance institutions collaborating in social-public partnerships with non-profit and co-operative housing organizations. In the unfolding provincial context, there is a particular opportunity for non-profit and cooperative associations to redevelop their own properties. Considerable sophistication and capacity is required to manage their own development; there is a gap in experience and equity and some may not be willing to assume the risks of redevelopment. In considering the Land Trust as a potential model for redevelopment, challenges that have emerged to date, such as tensions around decision-making and the reality of the time involved in, will have to be considered. Finally, the Land Trust is in early days of implementation; a Development Agreement has been signed but construction had not yet begun at the time of publication of this case study. As such, the analysis contained in this case study must be read with the caution that this is a promising but not yet proven model.