ADMINISTRATIVE REPORT

Date: January 20, 1999
Author/Local: P. Raynor/7459
RTS No. 00434

Dept. File No. 3308

CC File No. 4656

TO:	Vancouver City Council
FROM:	Director of the Housing Centre
SUBJECT:	Low-Income Housing in the Downtown Core, 1998 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 1998 survey of low-income housing in the Downtown Core, detailed in the report attached as Appendix A.*

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.

*Limited distribution - on file at the City Clerk's office

The attached report is the fourth 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. The report presents the results of the 1998 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. 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, it is important 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

1998 Low-Income Stock
As of August 1998, there were just over 12,700 low-income units in the Downtown Core. Eighty percent of the units are in the Downtown Eastside/Chinatown/Gastown/Strathcona area (DE.C.G.S.). Fifty-three percent of the units are in SRO buildings, thirty-nine percent are non-market, and SNRFs account for the remaining units.

SRO Vacancy Rates and Rents
The overall SRO vacancy rate in August 1998 was 13 percent, the same as in June 1996. Vacancy rates ranged from 10 percent in the Downtown South and Victory Square sub-areas 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 $358 in Downtown South.

The shelter component of social assistance ($325) tends to limit rent increases. In August 1998 only 49 percent of SRO units rented for $325 a month or less, compared to 53 percent in 1996 and 72 percent in 1992. The rate of increase in SRO rents over the last two years is slightly lower than between 1994 and 1996. The average increase in rents between June 1996 and August 1998 was 2.5 percent, with higher than average increases in the Victory Square and Downtown South areas. Over a similar period, West End studio apartment rents increased by 5.1 percent.

Previous Change in the Low-Income Stock, 1991 - 1996
Between January 1991 and June 1996, the total Downtown Core low-income stock increased by 217 units or 1.7 percent. SRO losses of 436 units were more than offset by non-market completions of 647 units. Of these non-market units, 480 were SRO replacement units -units targeted for singles rather than families.

Change in the Low-Income Stock, Downtown Core, 1991-98

Period	SROs	SNRFs	Non-Market Total	Non-Market Singles	Total Stock
1991-96*	-436	+6	+647	(+480)	+217
1996-98*	-732	+12	+297	(+280)	-423

* June 1996 and August 1998

Recent Change in the Low-Income Stock, 1996 - 1998
Between June 1996 and August 1998, the total stock of low-income housing in the Downtown Core decreased by 423 units or 3.3 percent. The non-market housing stock increased by 297 units or 6.3 percent, almost all of which were SRO replacement units. This increase was not sufficient to offset the SRO losses over the period. The number of SRO units fell by 732 units or 9.9 percent, largely as the result of the conversion of mixed tourist/residential hotels to exclusively tourist use. The largest absolute and relative decline in low-income stock was in the Downtown South, with the area's low-income stock declining by 275 units, or just under 15 percent.
These figures overstate the actual loss in low-income housing because all units in the mixed residential/tourist hotels are included in the SRO loss figures (probably around 100 rooms were tourist), and almost one-third of the SRO units lost in 1998 will re-open as non-market housing in 1999. Allowing for these factors, however, would not change the broad picture.

Future Non-Market Completions
In response to SRO losses, the Province and the City have stepped up the production of non-market housing in the Downtown Core. As of August 1998, there were sixteen non-market projects under construction or in the approval pipeline for the Downtown Core, ten of which are on land leased from or provided by the City. These projects will increase the total non-market stock by 1,102 units (22 percent) by December 2000. Twenty-five percent of these will be non-market family units in Pacific Place. The singles non-market stock will increase by 826 units by December 2000. The number of units completed during 2000 will be the largest annual addition to the Downtown Core's non-market housing stock.

Will SRO Replacement Be Achieved?
The low-income losses over the last two years were large enough to outweigh the gains over the previous five years. By August 1998, the combined SRO and singles non-market stock was 408 units lower than in January 1991. The number of singles non-market units in the pipeline is sufficiently high to replace those units and to increase the low-income stock by 418 units by December 2000. Whether this will be sufficient to offset future SRO losses over this period depends 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 (137 units a year), scheduled non-market completions (830 units) and SRO losses of 341 units would produce a net gain of 485 units between 1998 and 2000. This would more than offset the losses between 1991 and 1998.

Change in the Low-Income Stock, Downtown Core, 1998-2000*

			Change 1998 - 2000
Unit Type		Change 1991-98	At 1991-98 SRO Rate	At 1996-98 SRO Rate
SROs		-1,168	-341	-570
Singles Non-Market		+760	+826	+826
Total		-408	+485	+256

* August 1998 and December 2000

If the area continues to lose SROs at the rate of the last two and a half years (228 units a year), the net gain between 1998 and 2000 would be 256 units. This would not be sufficient to offset the losses between 1991 and 1998, and the combined SRO and singles non-market stock in December 2000 would be 1.3 percent lower than in 1991. In Downtown South, any further SRO losses will bring the December 2000 stock below 1991 levels.

Later this year, Council will be considering the proposed 1998-2000 non-market housing partnership between the City and the Province. This partnership will deal with the question of acquiring additional sites for non-market housing in the Downtown Core and other areas of the city.

The DE.C.G.S. housing plan process that is currently underway will address many of the issues confronting the low-income housing stock. The draft 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