Victoria denies funding for Mission tower built for low-income residents

The 92 brand new apartments in Mission’s tallest building were never intended to be rented out for top dollar. They were designed to be affordable homes for seniors, families, and singles struggling to make ends meet in an increasingly challenging housing market.

But with construction on the new tower expected to wrap up in just a couple months, a recent decision from BC Housing to deny a funding application may leave many of the apartments either sitting empty or being rented for whatever the market will bear.

The building is almost exactly what BC’s housing minister has been encouraging: a multi-family housing project aimed at seniors, families, and workers near transit hubs and local amenities. And BC Housing said the funding application to subsidize the below-market rents was “strong” and the project “worthwhile.” The province denied the request anyways, saying it didn't have enough money to fund all the worthy proposals it received.

Mission’s council voiced outrage at the decision Tuesday, with Councillor Mark Davies calling the decision “asinine.”

“The federal and provincial government are throwing billions of dollars into housing projects and this one is sitting here waiting for them to simply take the keys,” he said.

His colleagues agreed, vowing to pressure Victoria to fund the building.

“It’s not very often it’s this obvious, but this one is,” Mayor Paul Horn said.

‘I didn’t it would be that risky’

With construction work wrapping up, the 11-storey apartment tower on 2nd Avenue in downtown Mission is the city’s tallest building. A block from Mission’s main street and a short jaunt from the West Coast Express, the tower was built with a communal meeting space and laundry facility on its first floor. From the start, it was intended to eventually be sold to a non-profit that could operate it and rent out units at affordable rates.

The project is being constructed by North Vancouver developer Apex Mountain Homes and is three storeys taller than any other building in the city. When council approved the project in 2020, it required Apex to sign a contract guaranteeing that units would be rented at below-market rates for at least two decades.

Apex CEO Raymond Vesely told The Current that having acquired the land, he initially planned the project in co-ordination with Lookout Housing and Health Society, one of the province’s largest low-income housing providers. Lookout’s initial funding application during the pandemic was denied and the non-profit would later run into internal difficulties, but Vesely decided to start building anyway. He said he was confident that either the Canadian Mortgage and Housing Corporation or BC Housing would agree to subsidize the building and its below-market units.

“I thought I'll just go ahead and build this because, you know, it was desperately needed,” he told The Current. “I thought it was pretty straightforward. I mean, everybody's screaming about affordable housing, right? I didn’t think it would be that risky.”

Vesely eventually connected with another charity, Vancouver-based More Than a Roof Housing Society. The plan was that the organization would secure government funding, take over the building, and provide housing to those who needed it. Those discussions, and the work on the vital funding application, continued while the tower was still being constructed.

“Once you get started, you’ve got to finish it,” Vesely said.

But an application for funding from the Canadian Mortgage and Housing Corporation has been rejected, and last month, Vesely and More Than A Roof learned that their application to BC Housing’s Community Housing Fund has also been rejected.

Although the tower is still under construction and as new as they come, it’s also a product of the moment in which it was designed. Three years ago, an 11-storey tower had to be built out of concrete, though that’s not necessarily the case today. Concrete is durable and relatively cheap to maintain, but usually comes with more up-front costs, Vesely said. That boosted the cost to build, though he said that, given inflation, the price tag for construction will still end up being considerably lower than any project that would start today. The project also uses a gas boiler to heat the building, which Vesely said is no longer seen as an asset in today’s net-zero world.

He said his partners at More Than A roof “warned me right at the beginning that you’re a little bit of a good and bad. The good is that it will be ready and people can hang their hat on it—especially before an election—and say ‘There’s 92 units ready to go, we can move people in.’ The bad is it’s finished. It didn’t meet their application 100% because I started before the permits changed.”

But Vesely noted that the political demand for projects exactly like the 2nd Avenue tower has grown considerably in the last two years. He—and Mission’s council—say the project aligns with increasingly loud rhetoric from provincial and federal politicians. Even better, it offers the ability to provide subsidized housing this spring—not years in the future.

“It’s a beautiful building, and it’s 92 units and ready to go. People can move in in a couple months.”

Vesely says he has not yet been offered an explanation for why the building’s funding application failed. In response to an inquiry from The Current, a BC Housing spokesperson said the Mission application was “strong” and the project worthwhile. But there was insufficient funding to support all submissions deemed worthy and the tower lost out because other proposals were deemed even more worthy of funding.

“There was an overwhelming number of proposals received for the most recent Community Housing Fund (CHF) Request for Proposals, including many well-put together and worthwhile submissions like the More Than a Roof Housing Society’s (MTAR),” a BC Housing communication staffer wrote.

“BC Housing conducted an independent review and scoring procedure to ensure CHF funding decisions were made in a consistent and transparent manner. The MTAR submission, although strong, did not rank high enough in the CHF scoring procedure and within the funding allocation. We encourage all proponents to request a debriefing with BC Housing to discuss their proposal and to see if there are other programs available to move the project forward.”

What comes next

In its response, BC Housing said it urges failed applicants to seek a meeting to learn how they might be able to access funding through other programs—or what they can do to make a future application more likely to succeed. But the next call for applications for Community Housing Fund subsidies is expected late this year or in early 2025.

BC Housing’s statement also alluded to the project not potentially ranking “within the funding allocation,” suggesting the amount of the requested subsidty could also have been an issue. Vesely said that’s possible, though he didn’t receive a counterproposal from the province to make the money work.

Vesely said the denial of funding has left the future of a building—and his own company—in an uncertain state.

Mayor Paul Horn said Mission’s MLAs have supported the project. Abbotsford-Mission NDP MLA Pam Alexis was the city’s mayor when council approved the project in the first place. Alexis wasn’t available for an interview Wednesday, but a staffer said she had sent BC’s housing ministry “the history of the file” but had not yet heard back.

Vesely said renting out the entire building at below-market rates without a government subsidy is not financially possible, he said. And leaving the building empty on the hope that some future application might possibly gain government support is also not feasible.

If there’s no sign that the province will support More Than A Roof’s application to subsidize all 92 units, Vesely’s next step would be to go to the City of Mission and ask to amend the housing agreement. Many other housing developers have gained permission to build larger projects by guaranteeing to rent one-quarter of units at below-market rates. If Mission were to amend the tower’s housing agreement and allow just 23 of the 92 units to be rented at below-market rates, Vesely said his investors could be paid back and “I won’t go bankrupt.”

But he said such a move would be contrary to his preferred goal, the City of Mission’s wishes, the needs of struggling renters, and the province’s own rhetoric.

“The right thing to do here is that [the building] should go to a non-profit and help out the less fortunate. We keep talking about it. It's in the paper all the time. Let's do something about it.”