Vancouver rental developments to get $500M in federal loans

The federal government is investing half a billion dollars for purpose-built rental housing in Vancouver, Minister of Housing Sean Fraser announced Wednesday.

“This is an incredible place to live for the people who can afford to live here,” Fraser said during the announcement.

Sean Fraser speaks in Vancouver on Wednesday August 16, 2023. (CityNews Image)

“The reality is the last few days, I’ve been meeting with local residents, local municipal leaders, and local provincial leaders, to understand what the needs of communities are.

“The conversations that I’ve been having have made it loud and clear that people want to see the federal government play a leadership role when it comes to building more housing in Canada, making sure that we’re not only building housing to support some of the country’s most vulnerable people, but we’re also helping build housing stock for people who are working in this country, but have a hard time finding a place that’s actually attainable for them,” he said.

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The money, Fraser says, will be used to construct 1,100 homes across nine sites in Vancouver, including a new student housing building at the University of British Columbia’s main campus.

However, it comes with a condition. Fraser explains the money will need to be paid back, with the $500 million investment acting as a loan to housing developers.

“Every one of these projects that we’re funding is going to be within walking distance to rapid transit options, so more people can actually go from where they live to where they work more easily.

“All of the units that are being supported by the federal government today are going to be offered at a price point that is better than what the market is currently providing,” he said. “My view is that if you work in this country, you should be able to afford a place to live.”

Fraser explains, however, that the financing won’t be used exclusively for social housing or low-income families, but will instead increase the rental stock for market rentals.

“When it comes to the rental construction financing initiative, what we’re doing is changing the economics of the project, so developers can actually offer units and prices that families can afford,” he said. “This initiative is when we can pass on the borrowing power of the federal government and we change the economics of the project. We’re able to offer rents at a lower price than currently exists in the market.”

Fraser says the “top-end” of the rental prices will be about 30 per cent of the city’s median household income, “but every single project that we’re financing is going to have units that are available at a lower price point than that some of them as low as 70 per cent of that typical market rent that would exist for a median household income.”

Although not releasing further details of the other eight rental developments across the city, Fraser says more details will be shared by those projects in the coming weeks.

“We’re seeing extraordinary housing need not just for the lowest income families in Canada, we must take care of them too, but for people who are working in this country sometimes have two working people in a household and still can’t find a place to rent still can’t find a place to call home,” Fraser said.