Vancouver's housing co-ops face crunch

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      Sandie Brown worries about many of her neighbours. She’s afraid that they may lose their homes at their Vancouver co-op.

      Like others across the country, the Killarney Gardens Housing Co-operative, on East 54th Avenue, is facing a crunch. Low- and fixed-income residents will no longer receive rent supplements when operating agreements between co-ops and the federal government end.

      “A number of us are very upset with the prospect of losing these people on subsidies,” Brown told the Georgia Straight in a phone interview. “Many of them I’m friends with, and they’re great people and they contribute to our co-op. And I just don’t know where they would be able to go if they have to make other arrangements.”

      About half of more than 100 households at Killarney Gardens receive rent assistance. According to Brown, they’re mostly seniors, people with disabilities, and single moms with young children.

      “In all likelihood, they will be displaced,” said Brown, who is the co-op’s president. “They will have to find another place to live.” The market rate for a one-bedroom apartment at Killarney Gardens is $862 per month. A three-bedroom townhouse rents for $1,257.

      According to the Co-operative Housing Federation of Canada (CHFC), the federal government provides capital and operating assistance to co-ops through programs created between 1973 and 1991.

      Through the Canada Mortgage and Housing Corporation, it entered into subsidy agreements that are tied to the term of a co-op’s mortgage.

      The national co-op federation estimates that a total of 20,759 households, representing 51,898 low-income Canadians, are at risk of losing their homes with the expiration of these agreements as the mortgages are paid off.

      CMHC didn’t provide a spokesperson to interview. In November last year, the Crown corporation announced a measure to give co-ops “greater flexibility” when their agreements draw to a close.

      According to CMHC, co-ops whose agreements allow for the establishment of a “subsidy surplus fund” will be able to retain all unused federal funding to subsidize low-income households. Previously, housing providers were only allowed to keep a portion of the surplus.

      Killarney Gardens and many other co-ops don’t have this type of arrangement under so-called Section 95 agreements. According to the CHFC, Section 95 agreements cover 1,352 co-ops across the country. Excluding those in Quebec, Saskatchewan, Manitoba, and the territories, 16 of these agreements expired in 2012 and 2013. Twenty more will end this year.

      The federation’s B.C. coun­terpart estimates that from now to 2017, about 1,500 co-op households in this province will see their homes become unaffordable unless their disappearing subsidies are replaced.

      According to the Co-operative Housing Federation of B.C. (CHFBC), that number will increase to almost 3,000 by 2020 if the provincial government doesn’t step in.

      Deputy premier Rich Coleman, who is also the minister responsible for housing, didn’t make himself available for an interview.

      The B.C. federation estimates that maintaining rent support for low-income co-op households will initially cost the provincial government no more than $2.5 million a year. By 2020, the annual cost will not exceed $20 million. “This pales in comparison to the social and financial costs of homelessness,” the group states in a campaign paper.

      Fiona Jackson is the CHFBC’s communications director. She noted that although many co-ops would have paid down their mortgages at the end of their agreements with the federal government, they may not have the resources to maintain their buildings.

      “Some of them were those leaky buildings,” Jackson told the Straight in a phone interview. “So they definitely have second or third mortgages.”

      Killarney Gardens’ agreement expires in September 2019, but Brown and her neighbours aren’t going to just wait. They’re hosting a meeting with other housing co-ops in Southeast Vancouver on June 26 to talk about what they can do. (The meeting starts 7 p.m.)

      Co-ops in the Tri-Cities are also taking action. Falcon Crest Estates Co-op in Coquitlam will host a meeting with other co-ops in that municipality, Port Coquitlam, and Port Moody on June 19 at 7 p.m.



      Sandie Brown

      Jun 18, 2014 at 7:43pm

      Killarney Gardens Housing Co-operative has 227 units and 110 of those units are subsidized.

      Ken Hummel

      Jun 19, 2014 at 6:17am

      This co-op and others with operating agreements ending with CMHC when the mortgage is paid in full can allocate all or part of the money once needed to pay mortgage towards their member rent geared to income rent subsidy

      Megan Eliza

      Jun 19, 2014 at 3:22pm

      Once mortgages are paid off the co-op can support the subsidy which was the intention. All of the people in the building, including those on subsidy have helped to pay it off over the years - why should some of those people now lose their homes while others reap the rewards of ownership? There's something unclear about this situation to me.


      Jun 19, 2014 at 8:44pm

      In theory, Ken Hummel is correct - that was the plan. Once your mortgage is paid off, then you can lower the Housing charges and continue to provide subsidy.
      But the reality is a different story - mortgages were for 35 years - and Co-ops were not allowed to do any capital repairs without the permission of CMHC. What do you think it cost to repair all the leaky Co-ops? How about the cost of regular maintenance on aging buildings?
      Any subsidy received can only be used for subsidy and the amount a Co-op receives is tied to the mortgage rates. When most Co-ops were built, interest rates were above 18% and there was enough subsidy funding to house low-income members. Over the years, as interest rates dropped, so did the subsidy. At one point 90% of members received help but these days, that percentage has dropped to 35% of members receiving assistance. Where have those other low-income members move to? Where are they living?
      And as Maintenance and repair costs are now appearing after 35 years, Co-ops have had to refinance and borrow millions to do repairs. At the same time, CMHC demands that Co-ops raise their Housing Charges to near market - so ... as market rent goes up, so do Housing Charges at Co-ops. And as Housing Charges go up, subsidy use increases - which means fewer and fewer low-income members are welcome. When mortgages expire these days, most Co-ops are stretched thin - thus displacing all those members who need subsidy.
      Did you follow all that?
      Theory is nice but reality is complicated. If our governments truly support housing for low-income citizens, continued subsidy to Co-ops is one major option that would work quite efficiently. Co-ops already exist; systems are in place - there is no start up fee, no new Crown corporation that has to pay large CEO fees - we know the price tag. But this makes too much sense for any of our governments! They need to reinvent the wheel and waste the opportunity at hand.
      Thanks to Sandie Brown for speaking out!

      Deb Miller

      Aug 1, 2014 at 3:54pm

      I don't understand why Killarney Gardens have single occupants living in two bedrooms townhouses, when there are families waiting for years for housing.

      Rachel Penner

      Jan 23, 2015 at 2:34pm

      Yes Deb Miller very true. I know someone who lives in a two bedroom townhouse all by themself and for many many years. Why is the CHFC allowing this? I thought they have strict rules.

      tax payer

      Mar 8, 2015 at 9:44am

      If you belong to a group which income is slightly higher than needed for co op there is no way you can afford to live in usually expensive part of the city where are co op build. Yet your tax goes into their pocket. You are forced to live or rent elsewhere in the suburbs. Families who stays in coop usually end up with higher income and stys in co ops forever. They have privileges and we are all supporting them trough tax. It is a myth that this was made for low income families.