Solving QB’s Housing problem – whose job is it?

Affordable housing is a frequent topic of conversation, debate and occasional misinformation in our Town. We hear folks claiming that there is a housing crisis in and around Qualicum Beach. That people can’t afford to live here. That Town Hall is too slow to issue building permits. Unfortunately, these and other opinions shed lots of heat, but very little light.

We look at who is responsible for the current state of affairs, what they have done to address the problem, and what other municipalities offer as examples that could take us beyond contentious debate towards a sustainable future with a balanced supply of appropriate housing.

What exactly is our housing “problem”?

First for context, there are some supply and demand realities to consider. Billions of dollars from Asia and elsewhere continue to flow into Canada, with a demonstrated preference for west coast real estate. This became a surging demand 30 years ago and therefore should not be a surprise to urban planners anywhere. For decades, Qualicum Beach has been an attractive place to retire and now, thanks to the recent pandemic, is increasingly becoming an appealing location for work-from-home professionals and their families. On the horizon are hordes of potential climate refugees. Some will be wealthy, some will be destitute, all will be escaping what, to them, are intolerable living conditions.

Photo by Markus Spiske

So, for Qualicum Beach, for the foreseeable future, demand for housing will far exceed supply. We will have to get used to saying no, we’re full, try somewhere else. That is not to say maintaining control of our Town’s future will be easy. But it can and will become a serious problem unless and until there is consensus, commitment, and competency to manage our community’s housing stock to a constrained, but balanced, supply.

Is there evidence of real planning — at either the national, regional or local levels — to manage all of these realities, sustainably, within the carrying capacity of each community? No, unfortunately, no reliable or effective plans and controls exist yet. And until there is a plan, with strong leadership behind it, we will continue spinning our wheels, going in circles, having endless debates while our Town’s sustainability risks spiralling downward.

Problem #1 – there is no housing plan. We are trying to motor into the future with neither a map nor a driver.  Problem #2 – there is an absence of leadership in managing our Town’s housing policy and practice.

Whose overall responsibility is it to manage housing policy at the community level?

That one’s easy — it is the responsibility of the chief administrative officer of our Town. Municipal governments generally don’t have much scope of authority. For example, revenue gathering authority is basically restricted to property taxation and service fees for Town-operated utilities and recreational services. Core services – drinking water, sewage, drainage, roads – consume most of these revenues, with an expectation of building up reserves to replace core service infrastructure when it deteriorates.

However, when it comes to housing construction, the Town has immense power, influence and authority. Essentially, the Town’s Administration controls what can be built and where on any and every square metre of land within the Town boundaries. It asserts this power through its sole discretion to issue, or not, building permits. Each permitted building must conform to the detailed specifications associated with the property’s classification, more commonly known as its “zone”.

Exemptions can be made, but only with the blessing of the Council of the day, and only through a process that includes at least some form of token public visibility. This should not be confused with public consultation, as multiple Qualicum Beach Council decisions this past year have demonstrated.

The Town planning process and results to date

As we reported in our April 28, 2021 article Wandering off course – QB’s strategic plan that isn’t, the Town’s strategic priorities, as reflected in CAO Daniel Sailland’s “plan” are, to say the least, fluid. They are also seldom goal-centred or results-driven. His September 2020 list of “updated corporate priorities” included “Increase diversity of housing – Housing needs assessment – Data collection complete. Staff report to follow.”

It indeed makes sense to assess one’s needs before one starts making a plan to meet those needs. Applies to buying a vehicle, and it applies to creating housing policy too.

Fast forward six months and Sailland’s Strategic Plan Update to Council on March 17, 2021, where he reported, related to housing needs, that the “RDN completed a report and the details are available for reference.” Huh? Is that what Sailland meant back in September 2020 when he said “Staff report to follow?,” that he would punt this job to the RDN?

So what exactly does this RDN report tell us about housing needs in Qualicum Beach? Not much that you already didn’t know or couldn’t guess. And certainly not enough to drive any concrete housing policies and strategic plans.

Here is essentially ALL the RDN “housing needs” report tells us about Qualicum Beach, based on 2016 census data and 2018/19 housing stock counts. QB population in 2016 was 8,943. Median age was 65.9 years. 86% of households owned; 14% rented. The number of purpose-built rental units in Qualicum Beach was around 500, basically unchanged since 2012. The rental vacancy in QB was zero. Rents were increasing, like everywhere else in the region.

Photo by Sangga Rima Roman Selia

The report concluded: “With increasing rental prices, limited purpose-built rental stock, and a 0% vacancy rate, there is demand for additional rental housing in Qualicum Beach.” Well, duhhh.

The RDN document also reported that there were 84 units of non-market housing in QB, 120 rent supplement recipients, and 31 applicants on the non-market housing waitlist, which we assume to mean the BC Housing Registry. Planning construction of a block of subsidized rental units built on Town owned land (the Residences at Qualicum Station) to serve this one group has been the Town’s one and only “affordable housing” project for the past year.

CAO Sailland would have us believe that with this cursory report in hand he has completed a housing needs assessment. If that were true, then we would have the information available to answer the following half-dozen questions:

  1. Supply —  How many purpose-built rental (PBR) units would need to be built to get us close to a balance in supply and demand, for example, a vacancy rate of 3 %?
  2. Demand — If these rental units were somehow magically available tomorrow morning at market rental rates, who would the new renters be?
  3. Would this new population of renters have any measurable effect on the availability of workers to fill low wage retail and service job vacancies here in Town?
  4. Or would the new supply of rental units simply be gobbled up by retirees?
  5. What policies are required to incentivize construction of a few hundred purpose-built rental units?
  6. If one of the policies was to regulate the target owner / renter household ratio in Qualicum Beach at, say, 75% owner / 25% renter, how quickly would we be able to create the additional 500 rental units to achieve that balance (meanwhile placing a moratorium on any new owner occupied housing)?

These are some of the tough and relevant questions that need to be answered in a real housing plan.

Current leadership within the Town, within the Administration staff and on Council, has not shown that it is up to the task. And we haven’t even touched on the need to appropriately house seasonal workers in the tourism and agriculture sectors.

Anyone who reads the Town’s 2020 Annual Report will notice that CAO Sailland and his team has the shameless gall to acknowledge that in 2009 – twelve years ago – our Town had an “unmet demand for affordable rental market housing”. And they don’t even apologize for their negligence and incompetence in allowing the problem to simply worsen in the decade since.

But the Town cannot get us there on its own. Engagement and leadership needs to also come from other agencies. For example, if affordable housing is truly constraining the supply of workers, then where is the problem-solving leadership from the Qualicum Beach Chamber of Commerce and the Parksville Qualicum Beach Tourism Association? Why haven’t they created a labour needs and supply plan, including a workable plan for the accommodation of workers who live, or want to live, in or near the Town? Where are the creative policy proposals from the Oceanside Development and Construction Association members?

CAO Sailland is not meeting even the basic BC legislated requirements

Legislative requirements (Part 14, Division 22 of the Local Government Act) took effect April 16, 2019 and require local governments to collect data, analyze trends and present reports that describe current and anticipated housing needs in B.C. communities. The required scope and detail of data required is explained in the regulations that accompanied the legislation.

Further information is available from the provincial government’s Policy and Planning Tools for Housing – Housing Needs Reports document.

Municipalities are expected to then use this detailed information to prepare and publish an online housing needs report which shows current and projected housing needs for at least the next five years, by housing type. And the residents of our Town would then expect our Town Administration to create and execute a Housing Plan to address urgent priorities — like increasing the supply of rental accommodation. Actually, QB residents and businesses have been patiently waiting for this action for years. That patience now needs to be replaced by pressure on our bureaucrats if meaningful, useful results are to be delivered.

What are other communities doing?

When confronted by a formidable municipal governance challenge, it is always instructive to look to other communities who, facing similar issues, have made progress towards a better future.

For this article, we consider another small Canadian town on an island, on the ocean – the lovely burg of Summerside, Prince Edward Island, population around 15,000. Like Qualicum Beach, it is a popular summer tourist destination.

Two years ago, vacancy rates for rental units in Summerside were at historic lows, leading to frustration about both the lack of available units and their affordability. Sound familiar?

Right downtown in Summerside was a block of land owned by the City’s port authority. Also sounds familiar — think of QB’s Berwick / Second Avenue public works site, or the Railway / Village Way area.

The Portside built by Arsenault Brothers Construction in Summerside, PEI.

A short two years later (yes, even including pandemic-driven delays) that Summerside property is now The Portside, a seven storey, multi-residential, purpose-built apartment complex that has added 70 much needed units to the rental housing stock in Summerside. Coincidentally, 70 was the total number of new rental units that had been created in Summerside in the previous four years combined.

Furthermore, 20 of the units (two complete floors) are dedicated at reduced rates for tenants on low incomes, to be managed by the PEI Housing Corporation. And the footprint of this 70 unit complex in Summerside is only 0.78 acres. Compare that to the 56 units planned on the 1.9 acres of Town land at Railway & Village Way — fewer units on a footprint more than twice as big.

The future is bright for the rental accommodation industry

We are frequently told that no one wants to build rental buildings anymore — not profitable enough. Or that no one wants to own rental apartment buildings — too risky. Reality suggests that both of these sentiments are misinformation typically coming from developers who prefer to capture a piece of the current windfall of high margin condo construction profits.

PEI’s David Arsenault and his company have demonstrated that purpose-built rental construction can be both profitable and make a meaningful community contribution.

CAPREIT, the Canada Apartment Properties Real Estate Investment Trust, continues to acquire and operate rental buildings totalling some 65,000 suites at last count. And their publicly traded stock value keeps rising for any readers that have an interest in investing in such REITs.

An important ingredient — rent control

Once a community establishes an appropriate balance between occupancy by renters / owners, with affordable rents, they also need to control rent increases (and prevent renoviction conversions to condos). On Prince Edward Island, related to the example above, the provincial government sets an allowable annual increase. In 2020 the rent increase could not exceed 1.3% AND in PEI the rent increase applies to the UNIT not the TENANT. In other words, when a tenancy ends, the owner cannot simply reset the rent at whatever price the market will bear.

BC supposedly has rent control too but, based on a local example, it doesn’t seem to be working. Nine months ago, in our October 17, 2020 article Time for a community discussion about housing, we noted that the new Gateway apartments in downtown Parksville (Broadstreet Properties) started at $1,608 per month for a 2 bedroom, 2 bath suite, including electrical, heat and water. Now a same-sized unit is listed as starting at $1,998 per month, including water only — an increase of 24% in less than a year. It appears that either the Province or the City is shirking its policy and regulatory responsibility to prevent rent gouging.

Speed is critical

QB’s stock of rental housing needs to be boosted pronto. As a reference point, consider Raven Place, the 52 rental units quickly constructed in Grand Forks, BC after their devastating 2018 flood. According to Dexterra’s NRB Modular Solutions, “construction time totalled nine months from contract to occupancy with less than five months spent on-site.”

A plan for moving forward

From our analysis of Summerside’s success, there were three main ingredients – leadership, leadership, leadership.

Leadership from the City — who sold the property at less than market value — conditional on its inclusion of the below-market rate rentals for low-income families — rather than sell at a higher price to developers of a few dozen high priced condos the City did not need or want downtown.

Leadership from the federal government — through a low-cost loan available to qualified builders from the Rental Construction Financing Initiative, first announced by Canada Mortgage and Housing Corporation in 2019.

Leadership from a respected local construction company — Arsenault Brothers Construction have been both the property developers and the construction company, and retain ownership of the building, and are thus the landlords for each of the fortunate occupants of these new units.

The first and foremost “housing problem” faced by Qualicum Beach is the absence of qualified and committed leadership — both within the Town Administration and at the Council table — to define the problem, to accurately diagnose the root cause(s) of the problem, and to create innovative policies and action that would address the problem in the public interest, regardless of whinging from private interests who choose not to be in alignment with our community’s critical priorities.