Burnaby Housing Authority

Non-market housing is housing that costs less than what the market would typically charge for housing. Non-market housing:

• can come in many forms
• can be offered as either rental housing or home ownership
• is often developed and operated by non-profit organizations 
• is often subsidized by government funding, financial contributions from charitable donors, or through contributions made through the development process
• is broader than affordable housing, which is usually defined as housing costs that make up more than 30% of a household’s gross income
• can be anything from rent geared to income (30% of income) to slightly below market 

Non-market housing in Burnaby is currently delivered in a range of ways that involve the City, non-profit operators, private developers and other levels of government (e.g. regional, provincial and federal). 

The City supports non-market housing by:

• creating housing-friendly policies, plans and regulations
• reviewing and approving development applications of non-profit developers
• advocating for financial support from other levels of government 
• providing a range of financial supports, including capital contributions, grants and leasing City land at a nominal cost
• funding and completing off-site services and civil works

Policy development, development approvals and advocacy for non-market housing are led by Burnaby's Planning and Development Department with support for other roles from a number of other City departments including Engineering, Finance, Lands and Facilities and Corporate Services.

The City would continue to provide these functions in support of non-market housing, with or without the BHA. 

The City does not have a department or separate agency dedicated to the development or construction of non-market housing, nor does it typically directly operate non-market housing.

A housing authority is an organization focused on the delivery of non-market or subsidized housing. Housing authorities typically develop, manage and administer housing. Housing authorities have different objectives, depending on the needs of the communities. For example:

• Whistler Housing Authority aims to provide work force housing. 
• Metro Vancouver Housing Corporation provides housing to diverse, mixed-income communities that include families, seniors and people with disabilities.
• BC Housing provides a wide range of subsidized housing across the province.

The City would build on the outcomes of the City’s previous engagement work through Your Voice. Your Home., the Mayor’s Task Force on Community Housing, the Housing Needs Report, and HOME: Burnaby’s Housing and Homelessness Strategy to further advance action on housing in Burnaby.  The BHA would focus on areas of housing needs and gaps.

The vision within the recently adopted HOME: Housing and Homelessness Strategy is, 

“Burnaby is a place where everyone can find a home, afford a home and feel at home.” 

The City plans to deliver on this vision by using the BHA to: 

• create more housing by adding to existing sources of housing supply
• act like a private housing developer, while delivering non-market housing for public benefit
• help fill gaps in Burnaby’s housing supply strategically
• contribute to the larger housing ecosystem through collaboration, not competition

Six different types of organizations were considered for the housing authority. These organizations were assessed on their ability to meet ten objectives as shown in the following table. The municipal corporation model scored the highest, meeting all 10 objectives set out by the City. 

Definition of Terms and Typical Use

Operating unit: The City establishes a separate department, function or operating unit within its internal organization structure. Operating units are used when access to outside operating expertise, and delegated authority and governance are not required or are not primary objectives.

Partnering agreement: A partnering agreement is defined under the Community Charter as an agreement between a municipality and another party (e.g. person, public authority, or private business) where the other party agrees to provide a service on behalf of the municipality. Partnering agreements are used to meet short-term objectives. Partnering agreements are used directly by the local government for access to potential cost savings (e.g. value for money or economies of scale), outside expertise, risk sharing and operational efficiency with public authorities, societies or private corporations (could be in the form of a joint venture or partnership).  

Commission: A commission is appointed by Council to do one or more of the following: (a) operate services; (b) undertake operation and enforcement in relation to the Council's exercise of its authority to regulate, prohibit and impose requirements; (c) manage property and licences held by the municipality. Commission is used when access to outside advisory expertise, and or delegated authority and governance are required.

Society: A society is a not-for-profit, non-taxable organization that may or may not be incorporated. In this review a society was assumed to be a not-for-profit corporation. Societies are formed with a purpose as set out under the Societies Act, and not for the carrying on of a business for profit or gain.

Corporation: A business corporation is a separate legal entity with share capital that has the capacity and the rights, powers and privileges of a natural person. A business corporation can be incorporated under the federal or provincial business corporations legislation. Corporations are formed to carry out a business for profit or gain, access to outside expertise, and delegated authority and governance.

Trust: A business trust is not a separate legal entity under common law, although it is treated as such for tax purposes. It is a relationship between a trustee, who holds title to the trust property, and the beneficiaries for whom the trust property is managed.  Generally, trusts have a maximum lifespan of 21 years before steps must be taken to avoid a taxable deemed disposition of assets at fair value. A trust is formed for the carrying on of a business for profit or gain, access to outside expertise, delegated authority and governance, and where tax planning is required.

Key benefits of a municipal corporation are that it would allow the City to:

• own the BHA by being its sole shareholder
• access additional housing expertise, resources, and innovation  
• minimize and allocate risk 

The Community Charter enables municipalities to create external organizations like municipal corporations to help achieve public benefits like non-market housing.  The creation of a municipal corporation would require the approval of the provincial Inspector of Municipalities.  The City of Burnaby intends to submit an application to the Inspector of Municipalities in fall of 2023. 

The BHA would aim to improve the delivery of non-market housing in Burnaby. The corporation model was identified as the recommended option as it offers the following benefits:

• ownership and control by the City
• a purpose-driven housing-focused organization 
• a centralized hub to develop and manage secure, purpose-built, non-market housing units
• a dedicated team with a range of expertise (e.g. development, finance, legal, etc.)
• ready access to outside housing expertise, resources and innovation
• streamlined decision-making and project development processes to expedite non-market housing projects
• the ability to capitalize on opportunities in an efficient and effective way

The current recommendation is that the BHA’s scope of activities focus on 4 main functions–acquire land and units, develop new units, operate units and administer non-market units.

This is the initial scope of work envisioned for the BHA, with the BHA’s activities potentially changing over time as the BHA develops capacity and gains experience in acquisitions, development, operations and administration.

Please see What does the City do now to support non-market housing? above for a description of other functions the City does now and would continue to do in future in support of non-market housing.

The BHA would help to fill the housing gap by adding rather than replacing existing sources of housing. The “affordability band” that the BHA would work within is shown by the dotted line in the figure below and would include below-market rental, below-market ownership, and market rentals (where they would help to support non-market housing).

Click the graphic above to see or download a larger view.

In January 2021, Council received the Burnaby Housing Needs Report (HNR), a provincially mandated document that provides key insights into community housing needs, including the number and type of units that will be needed to meet housing demand over the next 5 and 10 years. The table below shows the anticipated 10-year rental housing demand based on the HNR and the estimated number and type of housing units currently in the development process. 

* Income level based on 2021 Census, where median total household income was $83,000.

The greatest need in Burnaby is for housing affordable to individuals and households with very low incomes, defined as households earning less than 50% of the median household income (MHI) in Burnaby. As these deeply discounted units require ongoing operating funding from other levels of government to remain affordable, these units will be difficult for the BHA to achieve alone.

While the need for low-income rental units is most significant, there is a need for rental housing at all affordability levels, including market rental. The 2022 Canada Mortgage and Housing Corporation (CMHC) Rental Market Report notes the current vacancy rate in Burnaby is 1.1%. A healthy vacancy rate is typically defined as being between 3% and 5%. 

One of the main benefits of the BHA having a portfolio which includes housing units at or close to market rates is the ability for the higher rents to subsidize costs for housing at deeper affordability levels. This cross-subsidization model is becoming more prevalent in non-market housing projects, including projects funded under BC Housing’s Community Housing Fund, where 20% of units are deeply subsidy units for low-income tenants, 50% of units are rent geared to income and 30% of units are slightly discounted from market rates. 

In addition to rental housing, the HNR further notes the need for attainable homeownership options. This has not been an area of focus for the City to date, but could be an area that the BHA explores in the future:  to offer new options for Burnaby residents who wish to enter the home ownership market but cannot do so in the current real estate market.

The creation of a BHA would need financial support from the City as it starts up and transitions to a self-sustaining organization. Support would include City funding for capital development and housing operations.

At the October 16, 2023 Council meeting, City Council directed staff to include the following items in the City’s draft 2024-2028 Financial Plan:

• planned contribution of $475,000 in 2024 for one-time BHA start-up capital expenditures, to be funded from the Community Benefit Bonus Affordable Housing Reserve
• planned contribution of $2 million per year for 5 years (2024 to 2028) for BHA operating expenses, to be funded from the Operating Housing Reserve
• planned financing of $100 million over 5 years (2024 to 2028) for BHA affordable housing projects, to be funded from the Community Benefit Bonus Affordable Housing reserve

Fortunately, the City has the resources needed without seeking funds from taxpayers. Funding received through the Community Benefit Bonus Program allows the City to address non-market housing needs and capital investment in key amenities as Burnaby’s population continues to grow.  A portion of the contributions received from developers is allocated to the Community Benefit Bonus Affordable Housing Reserve for capital spending to support the construction of new housing units and the Operating Housing Reserve to support ongoing operating costs related to City non-market housing initiatives. 

Available funds in these reserves would support the creation and initial operation of the BHA.  Even after the BHA is able to fund its own operations through its own income, the BHA would continue to seek grants from all levels of government for the construction of new housing units and to improve levels of affordability.

The City may also provide land to the BHA in addition to financial support.

Once the BHA is incorporated, Council will need to approve a Partnering Agreement, between the City and the BHA.

The City could use the partnering agreement to provide assistance to the BHA, which could include some or all of the following:

• City land 
• City capital 
• pre-zoning 
• fast tracked approvals 
• servicing 
• dedicated staff resources 
• operating funds 
• preferred financing rates 
• loan guarantees 

The partnering agreement would establish the terms and conditions upon which the City would provide assistance to the BHA, as well as the types of services that the BHA would provide on behalf of the City.

The initial Partnering Agreement between the City and the BHA is envisioned for a term of 5 years.

As a municipal corporation, the BHA would be governed by its own board of directors. Appointed by Council, the board of directors would provide strategic guidance and help the BHA gain the knowledge, resources and partnerships it needs to be successful. 

Based on feedback received through engagement events, the Draft Articles now reflect a BHA Board with a majority of external directors and a minority of Council/City staff directors. The BHA Board will have a total of 10 directors, of which 4 are Council/City staff and 6 are external directors. For the initial BHA Board, the composition of the 10-person BHA Board is defined by the Draft Articles as:

• 3 Council members
• one senior exempt Burnaby staff 
• 4 individuals with expertise and experience in the development or operations of private or non-profit housing 
• one individual with expertise or experience in the financial sector 
• one individual with expertise or experience in the legal sector 

The proposed BHA Board composition prioritizes direct experience and expertise in the four functions of the BHA – acquisitions, development, operations and administration. 

An external BHA Board director will be elected Chair to preside over BHA Board meetings, along with other duties. The Chair, as the head of the BHA’s governing body and the spokesperson for the BHA, will be an external member to reinforce the autonomy of the BHA. The Draft Articles also permit the BHA Board to, from time to time, invite other professional advisors and consultants, as well as City staff members, to attend BHA Board meetings where the expertise or advice of such persons may be desirable.

To ensure a diversity of perspectives and access to additional expertise to help shape the work of the BHA, the Draft Articles permit the BHA Board to form one or more committees, as it considers appropriate, and to appoint members who have knowledge and expertise for the specific committee that may not yet be represented on the BHA Board.

The BHA’s powers and mandate are defined in the Draft Articles of Incorporation. Council’s priorities would listed later in a partnering agreement.

The mission, vision and values statements for the BHA would be created by BHA staff and board members, once the corporation is created.

Establishing a BHA to help create more non-market housing units supports several City policies, including: 

• Corporate Strategic Plan (2022) 
• HOME: Housing and Homelessness Strategy (2021) 
• Burnaby Housing Needs Report (2021) 
• Mayor's Task Force on Community Housing Final Report (2019) 
• Burnaby Social Sustainability Strategy (2011) 
• Burnaby Economic Development Strategy (2007)
• Official Community Plan (1998)