What follows was written by Pat McCutcheon. He references Surrey, but this is useful commentary for any jurisdiction.

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With a municipal election just around the corner, Surrey’s main political parties are tripping over themselves to provide better policing, more parks and more frequent transit.  While these are important issues, most Surrey residents rate affordable housing much higher on their priority list and for good reason.  Average house prices and monthly rental rates remain out of reach for many.

Affordable housing has traditionally been the responsibility of the provincial and federal government.  Both levels of government have failed terribly to deliver and this record of underperformance is unlikely to change.  Also, we have to stop believing private developers will one day build affordable housing.  Unless they are regulated, they never have, and never will build affordable housing.  Their business model prioritizes profits and there is nothing wrong with this.  It just doesn’t result in affordable housing.

Cities can, and do, play an important role in providing affordable rental housing.  Where it has been done successfully, the city, in partnership with non-profit organizations, collaborate to purchase or build a large block of affordable rental housing.  Vienna, Austria, one of the world’s most livable cities, provides a blueprint for how this can be accomplished.  The citydirectly owns about 201,000 housing units, roughly 22% of the city’s total housing stock.  Non-profits own roughly another 200,000 units.  Monthly rental for a 600 ft2 one-bedroom condo in Vienna costs approximately $1000.  Here in Surrey it averages $1800.

Surrey currently has between 9,500 – 10,500 subsidized housing units managed by a fractured assortment of government departments and non-profit organizations.  Total rental units in Surrey number approximately 60,000, with 70-75% being secondary market rentals(suites, rented condos etc.), 13-14% being purpose-built rentals and 13-14% being subsidized rentals.

Surrey has been relying on other levels of government and non-profits to deliver subsidized housing to the citizens of Surrey and it has fallen short.  A commitment by higher levels of government to build more units does not materialize unless we are in crisis mode.  Currently, there are over 30 non-profit organizations and 14 co-ops doing their best to operate subsidized housing in Surrey but their funding levels are not stable.  The City of Surrey needs to step in with a solid plan to support subsidized housing for its citizens.

Like Vienna, the City of Surrey needs to become the city’s largest landlord.  Over time, this would shrink the number of players in the subsidized housing market,resulting in a more streamlined operation.  It would also allow the city to respond more rapidly to changing subsidized housing requirements.  The plan should be structured so that rental revenue covers the program’s operating costs.  If this is done properly, the average subsidized rent should be at least 30% below market rent.  The purchase of condo stock could be achieved by carving out $25 million annually from the City’s annual investment income ($111.9 million in 2024).  In today’s market, the city should be able to purchase approximately 50 condos per year.  Another method to support the purchase of condos is to apply an annual surtax on high-value homes and vacant property.

The city and its citizens are net beneficiaries from a strong subsidized housing program.

• Residents of subsidized housing potentially save over $600/month.  These savings can be used to save for the purchase of house or spent in the local economy.

• The presence of a large block of subsidized housing puts downward pressure on private rental rates.  They have to compete.

• Buying existing condos on the open market accelerates the availability of subsidized housing.  No waiting for units to be built.

• The purchase of condos should be scattered around the city to avoid ‘The Ghetto’ effect.

• Subsidized housing acts as a brake on citizens sliding into homelessness.  It needs to be there for them.

• For individuals with low paying jobs, subsidized housing allows them to live close to where they work.  This is also a side-effect benefit for local businesses.

• Stress levels, medical issues and crime are greatly reduced if citizens are housed affordably.  This saves the city and the province enormously on providing these social services.

• By owning a large block of housing, the City of Surrey is building on its asset base with a historically appreciating asset.  This asset has potential to be conservatively leveraged to the benefit of the citizens of Surrey.

Most of our municipal parties are completely ignoring the issue of affordable housing.  This needs to change and it needs to be a major issue in the upcoming civic election.