ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

Director of the Housing Centre

SUBJECT:

Low-Income Housing in the Downtown Core, 2003 Survey

 

INFORMATION

COUNCIL POLICY

PURPOSE

The purpose of this report is to inform Council of the results of the 2003 survey of low-income housing in the Downtown Core, detailed in the report attached as Appendix A (Limited Distribution - on file at 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. In October 2001, Council confirmed the housing objective to "maintain and expand housing opportunities.. . with priority being given

to families with children, SRO residents, and the mentally ill, physically disabled, and others at risk of homelessness."

The attached report is the sixth report by the Housing Centre monitoring 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 2003 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.

Special needs residential facilities (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

2003 Low-Income Stock
As of March 2003, there were 13,741 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-six percent of the units are in SRO buildings, forty-six percent are non-market, and SNRFs account for the remaining nine percent.

Recent Change in the Low-Income Stock
Between March 2001 and March 2003, the total stock of low-income housing in the Downtown Core increased by 533 units or 4.0 percent. The net change in the number of SRO units was a decrease of 61 units or 1.0% percent, with 400 units being lost and 339 units being gained. Most of the SRO losses are the result of closures that are likely to be temporary. Most of the more permanent SRO losses are the result of their conversion either

to non-market housing (in which case there is no net loss in the total low-income stock) or to budget /backpacker hostel. The SRO gains were mainly from the re-opening of SROs that had been closed, the largest of these being the Lotus Hotel.

The net increase in the non-market housing stock over the period was 469 units or eight percent. This increase was more than sufficient to offset not only the SRO losses over the period, but also the net loss in the total low-income stock between 1991 and 2001. The Downtown Core's stock of low-income housing in March 2003 was almost six percent higher than in January 1991.

However, not all non-market projects can be considered to be SRO replacement units. Excluding SNRFS and housing designed for families produces a more appropriate measure of SRO replacement housing. If SNRF units and non-market units targeted for families are excluded, the total singles stock in the Downtown Core increased by 205 units between March 2001 and March 2003. This increase was just sufficient to offset the net loss during the earlier part of the decade.

Change in the Low-Income Stock, Downtown Core, 1991-2003

Period

SROs

SNRFs

Non-Market
Total

Total Low-Income Stock

Non-Market
Non-Family

Total Singles Stock

1991 - 01*

-1,555

+24

+1,742

    +211

+1,353

-202

2001*- 03*

-61

+125

+469

+533

+583

+205

1991 - 03*

-1,616

+149

+2,211

+744

+1,619

+3

* March 2001and March 2003

SRO Vacancy Rates and Rents
The overall SRO vacancy rate in March 2003 was 10 percent, down from 12 percent in 2001. Vacancy rates ranged from 6 percent in the Victory Square area to 15 percent in the Downtown South.

The average monthly rent for SRO units in the Downtown Core was $351 ($334 in 2001), ranging from an average of $345 in the DE.C.G.S. to $380 in Downtown South. The shelter component of BC Employment Assistance ($325) tends to limit rent increases in the SRO stock. However, the average increase in rents between March 2001 and March 2003 was 5.4 percent, compared to 1.1 percent in the previous survey period. By March 2003, only 27 percent of SRO units rented for $325 a month or less, compared to 49 percent in 2001, 54 percent in 1998 and 72 percent in 1992. CMHC data indicates that rents in the conventional market-rental sector have also increased faster over the last two years than in the previous

period. The average rent of a West End studio apartment, for example, increased by 7.7 percent, compared to 0.5 percent between 1998 and 2000. It is worth noting that the shelter component of welfare for singles has remained unchanged at $325/month since 1991 during which time Vancouver's CPI has increased over 20%.

Future Non-Market Completions and SRO Replacement
An issue for the future is whether the non-market gains will continue to offset future SRO losses, and this depends on both the production of non-market housing and the rate of SRO loss. The rate of change in the SRO stock has been volatile over the last twelve years, with two peak loss years in 1996 and 1997 that accounted for almost half of the loss over the period.

In response to SRO losses in the 1990s, the Province and the City stepped up the production of non-market housing in the Downtown Core, but the "bulge" created by these projects will largely be completed this year and next year. As of March 2003, there were seven non-market projects under construction or in the approval pipeline for the Downtown Core, five of which are on land leased from or provided by the City. These projects will be occupied by December 2006 and will increase the singles non-market stock in the Downtown Core by 463 units (7 percent).

However even with the new projects, by the end of 2006 it is likely there will be a slight overall decline in the stock of SRO and SRO replacement housing. If the rate of SRO loss in the Downtown Core continues at the average rate of the 1990s (132 units a year), the stock of SRO and SRO replacement housing in December 2006 would be 111 units less than in 1991. All of the singles non-market completions up to 2006 will be in the DE.C.G.S area where most of the SRO stock is located. The decline in stock will be most pronounced in Downtown South and the rest of the Downtown Core.

So for the next three years, we are likely to be just slightly under the break-even levels in terms of SRO replacement numbers. Even though we have been almost maintaining the total stock, declining vacancy rates and increasing rents do indicate that there is pressure on the stock, and there will continue to be erosion of the "affordable" stock through increasing rent levels.

Beyond 2006, the absence of a Provincial housing program makes achieving the one-for-one SRO replacement objective difficult or unlikely. The HOMES BC program has been cancelled and the Province's replacement program, Independent Living BC, is targeted for frail seniors. Although there is new Federal money from the Supporting Communities Partnership Initiative (SCPI), non-market housing on its own does not qualify for SCPI funds, although shelters and transition housing with supportive services do. As non-market

projects typically take two or three years to organize, there will be short-term supply problems even if a new senior government housing program was introduced in the next couple of years.

Although housing is a senior government responsibility, the City can take some initiatives and form partnerships to secure and develop low-income housing. Policy work is underway in a number of areas, including re-initiating the draft housing plan for the Downtown Eastside, managing the rate of change of SROs, and determining housing priorities under the Vancouver Agreement.

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© 2002 City of Vancouver