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Legal dispute casting doubt over B.C. affordable housing program

Case involving 5 investors shows safeguards in place, housing minister says, opposition disagrees
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Housing Minister Ravi Kahlon, here seen in summer 2023, British Columbians can trust provincial safeguards as B.C. tries to reclaim affordable housing units from five investors. But the political opposition says they should have never been able to purchase those units. (Black Press Media file photo)

Housing Minister Ravi Kahlon said British Columbians can trust provincial safeguards as B.C. tries to reclaim affordable housing units from five investors.

But the political opposition says they should have never been able to purchase those units in the first place.

The province is currently in a civil legal dispute with five investors, who stand accused of having violated their ownership agreements by purchasing properties at affordable housing projects in Victoria.

According to the ministry of housing, buyers had to meet certain criteria under a covenant registered to their title. They include making their properties their principal residence for the first two years of ownership before selling or renting and not exceeding certain income levels.

Chard Development Ltd. — which received a low-interest construction financing loan of almost $53 million from B.C.— vetted potential buyers and an independent third-party appointed by the company monitored compliance and enforcement.

BC Housing also conducted audits to ensure owners complied, as the project was part of BC Housing’s Affordable Homeownership Program, then part of HousingHub, a program creating rental housing for middle-income earners.

According to a CBC report, 13 buyers violated their agreement and Kahlon said Tuesday that number is down to five.

“This investigation started in 2021,” he said. “The original, identified individuals are investors that had bought some of these properties. Many of them actually have returned them back to the province.”

Government, he added, has made changes in 2021 to prevent abuse of the system. “(We) do audit every single project that we have and that’s why these individuals were caught,” Kahlon said. “It’s important to note that anyone that tries to use schemes to try to find ways to take affordable housing that’s meant for people who are struggling will get caught and in this case, they were.”

Kahlon said it is a “shame to see investors coming in and buying housing that should be available for people who are struggling to find affordable housing. B.C.’s court case will proceed until these five individuals return the properties to BC Housing.”

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Peter Milobar, MLA for Kamloops-North Thompson and BC United’s shadow finance minister, accused government of improper oversight, while managing their own system.

“The fact that there was such little oversight and double-checking peoples’ applications is shocking,” Milobar said.

He contrasted this apparent failure with the bureaucracy, which private homeowners face.

“They have made us all apply and connect on multiple ways what our housing situation is through our tax returns and through various registries (and) forms that you have to fill out,” he said.

Yet when it comes to government looking after its own housing programs, government was not able to “flag” people who have multiple properties, Milobar said, adding that a simple land title search would have revealed the violators.

“So what is the point of this government trying to get all of the layers of data on people, regular British Columbians, if they are actually not using it to try to double-check to make sure there’s not inappropriate actions being taken?”

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Looming behind this issue are questions about government’s ability to screen British Columbians to participate in BC Builds.

Located under the umbrella agency of BC Housing, BC Builds will work with non-profits, local governments, public agencies, First Nations and community groups to identify underused land. From there, funding and financing will support the construction of housing targeted to those who have a household income between roughly $84,000 and $190,000, subject to one-time income-testing.

Kahlon said the fact that BC Housing caught the individuals shows that the system actually works, when asked why people should trust government.

Milobar is not sure in calling for significant changes at BC Housing, “even if it continues to exist” while acknowledging that the previous, since-fired board of BC Housing oversaw the project.

Equally contentious is the question of who bears responsibility for the project. Kahlon’s ministry pointed out the former BC Liberals — now BC United — had initiated the project in 2017. But David Eby, then housing minister, now Premier, praised the project upon its completion.

“Affordable housing for middle-income British Columbians is a priority for our government and this pilot project is one example of the important work that can be done in partnership with the private sector to achieve that goal,” he said at the time.

Editor’s Note: This story has been edited to remove a claim that buyers at the Vivid could not own property elsewhere prior to purchase. Government introduced the prohibition of owning property elsewhere, but only after the purchases in question had taken place.



Wolf Depner

About the Author: Wolf Depner

I joined the national team with Black Press Media in 2023 from the Peninsula News Review, where I had reported on Vancouver Island's Saanich Peninsula since 2019.
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