Questions after ICBC sells affordable rental complex in central Abbotsford to developers

A week after this story was published, we published an update with new information about the sale of the land. You can read that here.

In a city with increasingly few affordable rental homes, Meadowood Place stands out.

Located along Clearbrook Road in Abbotsford, the complex’s 64 apartment units and 156 townhomes are a stone’s throw from a middle school, a high school, Matsqui Recreation Centre, and Columbia Bible College. Built in the early 1980s, many of its long-time residents pay less than $1,000 to rent their homes. And until December, the site was owned by the provincial government via ICBC, a Crown corporation.

But after being sold to developers, its future is uncertain, and it’s unclear whether a deal that filled the coffers of the province’s insurance arm will be good for Meadowood residents and other Abbotsford residents seeking affordable housing.

From its exterior—tidy but rooted in the 1980s—you wouldn’t have known ICBC owned Meadowood. It’s not like there’s a large sign for the insurance company out front. It’s a tidy, older housing complex notable mainly for its size and prime location.

The Current hasn’t been able to learn when ICBC bought the property—the Crown corporation refused a request for an interview and has not yet responded to questions sent via email. But last summer, ICBC put Meadowood’s homes and the 4.6-hectare property on which they sit up for sale. ICBC used commercial real estate brokerage Cushman Wakefield to market the property, which they called the “Meadowood Development Lands.” Sales material boasted both of the site’s rental income and its potential to be redeveloped relatively quickly and in phases.

“The near-term development opportunity of significant scale coupled with meaningful holding income has the potential to unlock significant value through a phased development,” the brochure read. A promotional video boasted about its “rarely available development scale in a central urban location within Abbotsford’s rapidly growing core.

A deal closed quickly. In December, some residents received letters notifying them that ICBC had sold the site to Northchild Properties. (The Current hasn’t been able to contact anyone at Northchild, and the sale price is unknown.)

Property was marketed for redevelopment potential

Residents have been told there are no imminent changes. And any new construction would need to be approved by the City of Abbotsford before proceeding. The marketing material for the property suggested the property would suit a variety of development timelines. No development application has been submitted to Abbotsford city hall yet, according to online records.

Abbotsford’s Official Community Plan would allow a mix of apartment buildings and townhomes to be built on the site. Although what gets built would require rezoning and likely some level of agreement between the city and developer, existing rules would permit more than 750,000-square-feet of residential floor space to be constructed. That could allow for triple the current number of homes.

One resident said the sale has thrown her family’s plans into doubt. While the woman (who didn’t want her name used) is planning to move out in the coming years, she had hoped that her older children would continue living in the complex and paying affordable rent.

“I love this place,” she told The Current. “It’s kind of got a cabin feeling to it: we have wood-burning fireplaces that are definitely maintained.”

She continued: “I can see [the] business sense, but at the same time … where do you go because there is no other low-income housing? Trying to get into co-op places is nearly impossible.”

ICBC selling housing investments

While residents have their own concerns, ICBC’s sale of affordable housing in the centre of a city with a severe housing shortage raises separate questions about the conflicting interests between different arms of the BC government.

It’s unclear what, if any, input or knowledge the province’s housing agency had of the plans by the Crown corporation. On Monday morning, The Current requested an interview with Minister David Eby to ask if his Ministry was aware of the sale of the property and if any conditions or assurances had been sought before the deal proceeded. On Tuesday evening, The Current received the following response, (published here in its entirety): “Thanks for bringing this to our attention. We will be looking into it further.”

It’s also unclear if anyone in the provincial government currently has the ability to prevent ICBC from selling off the various properties it owns to boost its bottom line. According to its latest financial statements, ICBC owns more than a half-billion dollars of domestic real estate, along with “more than 20%” of the voting interests in a real estate investment pool. The statement says an independent committee makes decisions on those real estate investments. Such barriers can be established to ensure investments are solely focused on providing the best financial return possible and to decrease the risk of interference—political or otherwise—from those seeking non-monetary objectives.

The financial returns have been good for the Crown corporation. In its last annual financial statement, ICBC declared that “gains from disposition of real estate were also realized leading to higher investment income.” And the value of its Canadian real estate holdings rose from $408 million to $581 million between 2020 and 2021. Many of the properties are held through numbered companies. In Meadowood’s case, the ICBC company was “0879948 B.C. Ltd.”

A clash of interests

But the financial interests of a Crown corporation are not always in alignment with the interests of a government and people it is supposed to serve.

Andy Yan, the director of the urban studies program at Simon Fraser University, says publicly owned land in central areas is incredibly prized right now—and not just for its monetary value.

“Publicly owned land is the equivalent of the family silverware,” Yan said. The availability and cost of such land is one of the biggest challenges facing a government trying to address a housing crisis, and Yan said it should only be disposed of with care and foresight.

“It shouldn’t be sold off to the highest bidder without an understanding of the overall plan for housing in that part of the region,” he said. “It’s not saying these properties shouldn’t change. But it’s how they change, especially in the face of what the market is willing and not willing to develop in terms of housing. Not only in terms of pricing, but also sizes of units [and] format of units.”

The addition of hundreds of new homes, even if built by a private developer, could be beneficial to Abbotsford. But given the housing crunch, Yan said governments should be very careful and deliberate in the disposal of such properties.

Such land is a “public asset,” with both monetary and non-monetary value. Real estate can create revenue that can help pay for other public goods. But it can also be a public good itself, and help a government meet the needs of its citizens.

Land is scarce, particularly in central urban areas, and it can be the thing that makes or breaks government efforts to construct the types of homes that aren’t being built by private developer. That could mean housing at a certain price point, for certain groups of people, or in units or configurations that are in short supply.

“There’s the housing that the local community needs as opposed to just what the market can provide,” Yan said. “Those are two very different kinds of outcomes.”

Last year, the province spent $7 million to buy the Red Lion Inn and Suites in Abbotsford. The property has 30 suites. When assessed, the land was three-quarters of the value of the property. Some of those suites are now being used to provide housing to people who need a variety of complex care services.

The rental units currently on the site likely generate $2 million or more of revenue each year, and some companies are scooping up complexes because of their ability to provide a significant and growing stream of money. But BC has also seen affordable rental complexes purchased, demolished, and their lots sit vacant for years.

Eby, BC’s minister for housing, was one of the most outspoken voices criticizing the prominent razing of the Little Mountain development in Central Vancouver, in which the province sold an affordable housing complex to a developer. The residents were evicted and the homes were bulldozed, only for the property to sit vacant for more than a decade.

“The B.C. Liberal government evicted 224 families from low-cost housing, demolished their homes and handed the land over to a private developer with no deadlines for reconstruction,” Eby declared last year.

Although Meadowood’s future may take a very different route, it’s unclear if ICBC and the province received any assurances regarding the future of the hundreds of residents currently living on the property. Nor is it clear if the province sought any guarantees as to how a future housing development might look, who it would house, and when it might be built.