Non-profit hopes to sell Hope affordable housing building for $10 million

Just two years after it welcomed its first residents, a Hope apartment building with below-market rents is up for sale for $10 million.

But the charity that constructed the 40-unit building says residents have nothing to fear about rates rising and that any profit is likely to be plowed into a brand new project in town.

A rare rental building

In 2020, when the Anhart Community Housing Society completed work on The Ryder—named for its location on Ryder Street in Hope, across from McDonald’s—the project was notable as the town’s first rental apartment building to be constructed in decades. Residents had to apply to the society to live in the project, with the focus on providing homes to seniors, small families, people with disabilities, and those working entry-to-mid-level jobs, according to a Hope Standard article at the time

The goal, the Vancouver-based organization said, was to create a community within a building, where residents would support and help their neighbours.

Two years later, The Ryder has become just such a place, according to Anhart’s chief financial officer Crystal Wiebe, who lives in Hope. But faced with difficulties elsewhere, she said the organization has been forced to re-evaluate its future and objectives.

“We have been restructuring and shifting our focus and right now we’ve felt it’s best that we don’t operate buildings and move to more development of affordable housing,” Wiebe said.

Last year, Anhart found itself in trouble and facing fines related to its operation of an older single-room occupancy in Vancouver’s Downtown Eastside. It also hit a snag in another Vancouver project when the Canadian Mortgage and Housing Corporation (CMHC), which had promised a loan, changed the conditions after it became unsure of the project’s long-term financial profitability. (The federal government itself later provided the necessary funding.)

Much of The Ryder’s financing also came from a CMHC loan, but the project didn’t hit similar bureaucratic difficulties. To access the financing, Anhart guaranteed rents would be on average 10% below market for two decades. If Anhart sells the building, any new owner must continue to meet that low-rent guarantee. That should ensure that total rental income from The Ryder remains below market rates.

That—along with provincial tenancy rules—should protect current residents, but it doesn’t guarantee that newcomers won’t end up paying more in the years to come. An influx of pipeline workers has pushed market rental rates in Hope. That inevitably has also pushed up that 10%-below-market threshold. Wiebe said The Ryder hasn’t kept rents at the upper limit. But that could allow any new owner to increase rents charged to incoming residents while still abiding by the CMHC rules.

(The 10% is calculated on a building-wide basis; individual rents vary and the owner can also charge some occupants market rates in order to provide larger subsidies to those in the most need.)

For current residents, though, provincial rules put strict limits on annual rent hikes for current residents. Last year, landlords couldn’t increase rents by more than 2%. After 2040, only those typical rental tenancy limits will apply to the building.

The constraints could limit the number of potential buyers. Wiebe said there have been inquiries with developers who understand the CMHC program and its requirements, but that no concrete offers have materialized yet.

Anhart constructed the building for around $8 million, Wiebe said. So if it could sell The Ryder for what it’s asking, it would make a profit (though not one nearly as large as one online commenter who suggested the building had been constructed for just $4 million).

A change in owner may also impact the District’s own property tax rolls. In 2020, the District waived property taxes on The Ryder for four years. If the building sells, that exemption won’t necessarily carry over, chief administrative officer John Fortoloczky told The Current. The taxes were exempted because of Anhart’s non-profit status and the benefit of adding affordable housing to Hope. If either of those two conditions change, taxes may need to be paid, Fortoloczky said.

The next project

Whether Anhart can sell The Ryder may have a significant impact on another affordable housing project in Hope.

Anhart is hoping to partner with the Fraser Inclusive and Supportive Housing (FISH) Society to construct a 14-unit rental building on Hudson Bay Street, near the town’s downtown. The building would specifically be aimed at providing housing for adults with developmental disabilities.

The project has the blessing of the District of Hope. It just needs the money to get built.

Wiebe said the sale of The Ryder could help Anhart pay for the build—and allow them and FISH to avoid the risks that can come from relying on an outside agency like CMHC to fund construction.

“If we could pull our money out of The Ryder, we would actually finance the build for them,” Wiebe said. After the project is built, FISH could then access a more-traditional traditional loan, which would free up Anhart to potentially fund another project.

That, at least, would be the long-term goal.

As for The Ryder, Wiebe is confident that the building and its residents won’t suffer if Anhart sells. But she said a potential sale still brings a “sad feeling” given that her personal connection goes far beyond crunching numbers for Anhart. The non-profit is relatively small, and Wiebe wore a range of hats on the project.

“It was the first building that we built,” she said. “I personally painted the mural in the amenity room, I made framed pictures for the hallways, I made the picnic tables at the back of the building.”

She said she is proud of the community that has grown among residents of the building, with residents with different incomes and means supporting one another.

“A lot of people in the building have been there since the day we opened and they’re really good people,” she continued. “It’s definitely not easy to let something like that go but hopefully if I stop by to say ‘Hi,’ they would all still welcome me and we can chat.”