Households in Metro Vancouver may pay an additional tax starting next year.
The new levy is proposed to finance public housing projects in the region.
The new tax could amount to $1 per family.
The board of the Metro Vancouver regional district is scheduled Wednesday (July 19) to vote on the proposed tax.
The levy will establish an annual funding of $1 million for the Metro Vancouver Housing Corporation (MVHC), which operates 49 public housing sites in the region.
The MVHC relies on rent for its financing.
According to a report prepared by two senior Metro Vancouver managers for the board, the district has the power to raise funds for its housing function through an annual “tax requisition”.
“A $1.0 million tax requisition through the Regional District Affordable Housing function would have a $1.00 impact on the average regional household,” according to the report written by Carol Mason and Phil Trotzuk, chief administrative officer and chief financial officer, respectively.
The 2011 Census by Statistics Canada counted 891,335 households in Metro Vancouver.
“Based on the current cost of development, in order for a re-developed affordable housing complex to be financially sustainable where net rental revenues generated from that complex cover all costs of operations, maintenance and mortgage financing, there must be a capital contribution to the project to reduce required mortgage financing to a sustainable level,” the report stated.
Through the MVHC, the regional district offers low market and subsidized housing to around 10,000 people in the Lower Mainland.
“The current MVHC net rental revenue is currently only sufficient to meet the direct operating, maintenance and debt service requirements associated with the existing 49 housing complexes and, therefore, does not allow for any significant funding of the capital costs of any new affordable housing development or re-development,” Mason and Trotzuk noted in their report.
According to the report, the provincial and federal governments have pledged support for new affordable housing.
However, the region must come up with its contribution in a three-way partnership agreement, with each providing a third of the overall cost.
“Although a long term financial plan is still under development for renewing and re-developing aging MVHC housing complexes, it is known that there are insufficient funds under the current MVHC model to raise sufficient equity funding for redevelopment,” the report noted. “As a means of implementing new funding that could be combined with MVHC surplus funds to provide 1/3 funding towards redevelopment projects, one option for Metro Vancouver is to use its authority to raise money through the Affordable Housing function.”
Metro Vancouver has started the redevelopment of its properties.
Construction is scheduled to start this fall at Heather Place in Vancouver. The 86-unit rental townhouse complex will be transformed into three buildings with 230 units.
Kingston Gardens in Surrey is next in line.
In the same meeting on July 19, Metro Vancouver directors will vote on a staff recommendation to allot $6.5 million for the redevelopment of Kingston Gardens, which is currently comprised of 192 two-bedroom and three-bedroom townhouse units.