Subsidizing rents in a converted motel on Douglas Street does not translate into new affordable housing, Capital Regional District directors have decided.
Despite being recommended for approval by CRD staff and the Regional Housing Trust Commission, the directors unanimously rejected Mike Kelly’s application for a $460,000 affordable-housing grant for his converted motel project on Douglas Street.
Kelly, of 890 Devonshire Holdings, has transformed a former Traveller’s Inn at 3025 Douglas into 48 bachelor-style apartments. The 350-square-foot units are targeted at tenants with incomes of less than $30,000 a year.
Had the grant been approved, Kelly planned to reduce rents on the units to $720 a month from $800. Kelly had partnered with Pacifica Housing to have a maximum of six units’ rents reduced to $645 a month.
As the renovation is virtually complete, it would have put more units of affordable housing into the region’s housing mix immediately.
“This project will provide an additional 48 quality, affordable rental units on a major public transportation corridor close to required community amenities,” said a report prepared by Henry Kamphof, recently retired senior manager of the CRD Housing Secretariat. The report noted that an evaluation of Kelly’s proposal scored it at 186 of a possible 220 points or 85 per cent. B.C. Housing lists affordable housing for bachelor units as having rents of about $737.50 a month.
“This is considered on the high end of the affordability scale,” Victoria Coun. Charlayne Thornton-Joe said, adding that there are other private-sector owners who are renting similar units in the same area at $650 a month without public-sector funding.
Kelly said he’s “obviously disappointed.”
“But at the end of the day, it’s a good project, we have the written support of the city and we look forward to working with our new tenants,” he said in a statement.
Victoria Coun. Ben Isitt said the purpose of the housing trust fund is not to create windfall profits for private landowners.
“The purpose of the fund is to create affordable and reliable units and this proposal doesn’t offer either. We’ve heard that there’s market-based units with no public subsidies in converted motels that rent for $650 per month. I think the applicant has floated the figure of $800 a month. I don’t think he would capture that on an open market,” Isitt said.
View Royal Mayor David Screech said the Regional Affordable Housing Trust Fund was not conceived to be a rent subsidy. “The idea was that it was a bricks-and-mortar fund to build buildings and to leverage funds, but not to be giving rent subsidies,’ Screech said.
Thornton-Joe, who chairs the Regional Housing Trust Commission, said the application had many merits but also risk and uncertainty.
Although Kelly originally sought to have the former motel rezoned, he withdrew that application and instead took out a building permit under the existing transient accommodation zoning. The city says that, under the existing zoning, the former motel can be used for short-term accommodation and transitional housing for low-income people who need short- to medium-term housing until they are able to find permanent housing.
Thornton-Joe said the zoning is “uncertain” as it relates to use as affordable housing. “We need to partner with private [enterprise]. We need to support it with regional housing trust fund funds, but I’m not comfortable with this one being the one.”
Saanich Coun. Vic Derman said the zoning is “a huge red flag and fraught with danger as to what could occur there.”
Even if the grant were approved, the units could not be considered affordable housing, North Saanich Mayor Alice Finall said. “It’s certainly not providing affordable housing. This is market-level return,” she said.