ADMINISTRATIVE REPORT

Date: May 1, 2001
Author/Local: P.Raynor/7459

J.Davidson/7670

RTS No. 02040

CC File No. 4656

Council: May 15, 2001

TO:	Vancouver City Council
FROM:	Director of the Housing Centre
SUBJECT:	Low-Income Housing in the Downtown Core, 2001 Survey

INFORMATION

The General Manager submits this report for INFORMATION.

COUNCIL POLICY

Council policy is to maintain, upgrade, and increase the stock of low-income housing in the downtown. Council has instructed the Housing Centre to monitor the core-need stock in the area on a regular basis.

PURPOSE

The purpose of this report is to inform Council of the results of the 2001 survey of low-income housing in the Downtown Core, detailed in the report attached as Appendix A (Limited Distribution - on file in the City Clerk's Office).

BACKGROUND

In October 1989, Council resolved that the City adopt the objective of "... maintaining, upgrading, and increasing the existing stock of core-need housing in the Downtown." In May 1991, when dealing with housing strategies for Downtown South, Council instructed the Housing Centre to monitor core-need housing in the Downtown South on a periodic basis. Council also confirmed their policy of one-to-one replacement of single-room occupancy (SRO) units in Downtown South.

The report (Limited Distribution) is the fifth report by the Housing Centre that monitors change in the stock of low-income housing in the Downtown Core; an area extending from Burrard Street to Clark Drive and from the waterfront south to Terminal Avenue and False Creek. The report presents the results of the 2001 survey of SRO housing and brings together information from other sources on special needs residential facilities (SNRFs) and non-market housing.

SRO housing is the cheapest form of rental housing provided by the market, for people who have few other choices. Typically, a SRO unit consists of one room about ten by ten feet, with shared bathrooms and minimal, if any, cooking facilities. Even though rents are relatively low, most SRO occupants pay substantially more than 30 percent of their income for housing. Although SRO units are small and rarely achieve more than basic physical quality standards, the City's policy is to retain SRO stock until more adequate housing is available.

While SRO units are low-income housing by default, non-market units are low-income housing by design. Non-market housing is usually subsidized by senior governments to accommodate core-need households, at rents fixed at 30 percent of income.

SNRFs provide housing combined with services to those with special needs - the frail elderly, those with physical, psychological, or substance abuse problems, and those needing emergency shelter. These groups often have low incomes as well.

DISCUSSION

2001 Low-Income Stock
As of March 2001, there were 13,260 low-income units in the Downtown Core. Seventy-nine percent of the units are in the Downtown Eastside/Chinatown/Gastown/Strathcona area (DE.C.G.S.). Forty-eight percent of the units are in SRO buildings, forty-four percent are non-market, and SNRFs account for the remaining eight percent.

Recent Change in the Low-Income Stock
Between August 1998 and March 2001, the total stock of low-income housing in the Downtown Core increased by 452 units or 3.5 percent. The number of SRO units fell by 353 units or 5.2% percent. Most of these SRO losses are the result of closures that are likely to be temporary. Most of the more permanent losses are the result of the conversion of SROs to budget tourist hotels or to backpacker hostels that often have two or more beds per room, sometimes in the form of bunk beds.

The non-market housing stock increased by 799 units or 16.0 percent between August 1998 and March 2001. This increase was more than sufficient to offset not only the SRO lossesover the period, but also the net loss in the total low-income stock between 1991 and 1998.
The stock of low-income housing in March 2001 was 1.9 percent higher than in January 1991. Although Downtown South experienced a 5.9 percent increase in stock between 1998 and 2001, it is the only sub-area in which the low-income stock has declined since 1991.

However, not all non-market projects can be considered to be SRO replacement units. If SNRF units and non-market units targeted for families are excluded, the total singles stock in the Downtown Core increased by 230 units between August 1998 and March 2001. This increase was not sufficient to offset the net loss during the earlier part of the decade.

Change in the Low-Income Stock, Downtown Core, 1991-2001

Period	SROs	SNRFs	Non-Market Total	Total Low-Income Stock	Non-Market Non-Family	Total Singles Stock
1991-98~	-1,165	+18	+944	-203	+772	-393
1998-01~	-353	+6	+799	+452	+583	+230
1991-01~	-1,518	+24	+1,743	+249	+1,355	-163

~ August 1998 and March 2001

Future Non-Market Completions
In response to SRO losses, the Province and the City stepped up the production of non-market housing in the Downtown Core. The net increase in non-family non-market units in 2000 was the largest annual increase recorded for the Downtown Core. As of March 2001, there were sixteen non-market projects under construction or in the approval pipeline for the Downtown Core, eleven of which are on land leased from or provided by the City. These projects will increase the total non-market stock in the Downtown Core by 1,268 units (22 percent) by December 2003. Twenty-two percent of these are family units, but the non-family non-market stock will increase by 985 units or 21 percent by December 2003.

Outside the Downtown Core, 14 projects with 683 units are under construction or in the approval pipeline. Four hundred of the units are non-family, with 135 units in four projects (2088 Yukon, 2626 Watson, 349 East 16th, and 520 West 7th) designated for singles living outside the Core.

Will SRO Replacement Be Achieved?
The number of singles non-market units in the pipeline is sufficiently high to replace the net loss in the singles stock between 1991 and March 2001 and to increase the stock by 822 units by December 2003. Whether this will be sufficient to offset future SRO losses over this period will depend on the rate at which SROs continue to be lost.

If the rate of SRO loss in the Downtown Core falls back to the average rate of the 1990s (151 units a year), scheduled non-market completions (985 units) and SRO losses of 452 units would produce a net gain of 533 units between 2001 and December 2003. This would more than offset the 163 units lost between 1991 and 2001.

Change in the Low-Income Stock, Downtown Core, 2001-2003

		Change 2001 - 2003
Unit Type	Change 1991-01	At 1991-00 SRO Rate	At 1997-00 SRO Rate
SROs	-1,518	-452	-790
Non-Family Non-Market	+1,355	+985	+985
Total	-163	+533	+195

If the area continues to lose SROs at the rate of the last four years (263 units a year), the net gain between 2001 and December 2003 would be 195 units. This would be sufficient to offset the loss between 1991 and 2001, and the combined SRO and singles non-market stock in December 2003 would be slightly higher than in 1991.

Most of the singles non-market completions will be in the DE.C.G.S area where most of the SRO stock is located. In Downtown South, SRO losses, even at the lower rate of the 1990s, will bring the December 2003 stock below 1991 levels. In the rest of the Downtown Core, the scheduled non-market additions will not be sufficient to offset the net loss over the last ten years, and any further SRO losses will increase the deficit.

SRO Vacancy Rates and Rents
The overall SRO vacancy rate in March 2001 was 12 percent, one percent lower than in 1998. Vacancy rates ranged from 2 percent in the rest of the Downtown Core area to 15 percent in the rest of the DE.C.G.S. The average monthly rent for SRO units in the Downtown Core was $334, ranging from an average of $329 in the DE.C.G.S. to $359 in Downtown South.

The shelter component of social assistance ($325) tends to limit rent increases in the SRO stock. The average increase in rents between August 1998 and March 2001 was 1.1 percent, with increases higher than average in the rest of the Downtown Core and Downtown South sub-areas. Over a similar period, the average rent of a studio apartment in the West End increased by 0.5 percent. The rate of increase in SRO rents over the last two years is less than half of the rate of increase between 1996 and 1998. However, by March 2001 only 49 percent of SRO units rented for $325 a month or less, compared to 54 percent in 1998 and 72 percent in 1992.

The Vancouver Agreement housing plan process that is currently underway will address many of the issues confronting the low-income housing stock. A draft housing plan has been released. This and the issue of SRO conversion controls will be the subject of public discussion later this year.

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(c) 1998 City of Vancouver