This conversation is part of our series on rental affordability, Making Rent. Sign up for our weekly newsletter for the latest updates on our reporting.
On May 12, reporter Julie Chadwick sat down with Nanaimo-Ladysmith MP Paul Manly for a virtual conversation about The Discourse Nanaimo’s solutions series on rental affordability in Nanaimo, Making Rent. Here are some highlights from that conversation, edited for clarity and length.
How did you start reporting with The Discourse Nanaimo?
Julie Chadwick: “So I worked for several years at the Nanaimo Daily News. And then after that, I did a book called The Man who Carried Cash, and I was freelancing for a lot of different publications. I really wanted to use all of the skills that I had acquired since my Daily News days and get back into local reporting. I really missed the community connection and I felt like I knew a lot of people here and I could do a lot of good work. I had heard that The Discourse was looking for people, and so initially, I kind of did the usual pitch of telling them a bunch of stories, of things that were happening, or things that weren’t being covered or things I thought were important. And they kind of stopped me, I was talking with Lindsay the editor at the time, and she was like, ‘Do you know exactly what we do?’ I had looked at a bunch of their stories, but I didn’t really realize exactly how they approached media and journalism, which is kind of different. So they explained to me that they do community engagement journalism. They had already done a lot of surveying, between 700 and 800 people in Nanaimo, asking “What are the issues that are important to you? What do you want to be covered more in-depth?” So what came up at that time was two main issues. One was basically ‘What’s going on with downtown Nanaimo?’ and another one was passenger rail on Vancouver Island.
So I pitched a few different stories, some of which turned out to be a whole series about abandoned buildings downtown and homelessness. That was used as pop-up coverage to see what the interest was. And then from there, we decided to open up a Discourse bureau in Nanaimo. Since then, we’ve had freelancers come in and do stories.”
Why did the federal government get out of housing?
Paul Manly: “I get a lot of emails about the abandoned buildings downtown. That’s not my jurisdiction at all. But housing and homelessness do fit on under federal jurisdiction. It was something that was abandoned, actually. The federal government played a big role in the ‘60s and ‘70s and early ‘80s in affordable housing, through subsidies and supporting co-op housing, which I’m a huge believer in. We didn’t get co-op housing in Nanaimo at the time when that was happening because there was lots of affordable, low-rent housing available. So there wasn’t a real need for co-op housing. But I love it because it’s a model where you have a community and your rent is based on your income. So if you lose your job you don’t lose your home, you stay within your little community, and you pay less rent. And if you retire, you’re still living in the same complex with families with young children, and you have all of these community connections. So much of what we’ve lost is a sense of community. So many of us don’t know our neighbours.
But in the late ‘80s, the federal government started to pull out of housing, they started to cut social programs. And by 1993, they completely cut funding for affordable housing. The federal government downloaded it to the provinces, and most provinces just continued that download onto municipalities.
This shift was also ideological. It’s the way we look at debts and deficit. So when we build infrastructure— when we build a freeway, get a new ferry—the money that we owe to do that construction is on the books, but the actual asset isn’t counted. And so we don’t think of affordable housing that’s been built by the government or subsidized by the government in terms of assets. We’re always looking at, what is the deficit and what is the debt and wanting to balance the budget.”
What’s the true cost of homelessness?
Paul Manly: “The cost of having homelessness or unaffordable housing is super high. There was a business association that followed a woman with mental health issues for one year. And they calculated the cost of her being homeless at $171,000 per year. That’s based on paramedics, police, emergency services at the hospital, the shelter system, the food bank—all of the services that she needed. Then they calculated how much would it cost for her to be in a group home with a social worker, and it was $17,000. So, we can’t afford homelessness. The average cost of a homeless person, depending on where you are, ranges from $45,000 a year to $60,000 a year. It’s an investment to ensure that people have a good place to live. And we have on one side, people who think we should have a free market in terms of rentals, but also don’t want to have higher minimum wages. So people who are working service jobs, where do they live? And where can they afford to live?”
Julie Chadwick: “With the series, we really want to drive things in a solution-oriented way that is based on evidence. We want to offer something to the community and not just report on how terrible things are, but actually be engaged in being part of the solution and looking at, okay, if this is the information that we have, where are we going with this?
With one of the homelessness stories, I looked into things like deinstitutionalization, which was kind of a trend throughout the ’60s and ’70s with places like Riverview where the political left was kind of like, ‘This is unjust, people are being held against their will, they should be able to be in the communities,’ which to a certain degree was true. And then the political right was sort of like, ‘Yes, these institutions are very costly, we can save all this money by shutting them down.’ But then my research showed that a lot of the money that was supposed to go into community support, to look after the people once they came out of these institutions, never materialized. And so we have situations where 60 per cent of the people on the streets that were surveyed with the Nanaimo Homeless Coalition, who does their count every year, have ongoing mental health issues, 23 per cent have acquired brain injuries. So these are people that are suffering.”
Paul Manly: “Part of that whole trend, too, was the repatriation of the Constitution and the Charter of Rights and Freedoms. And so you cannot institutionalize people against their will. But there wasn’t a plan for when people were let go from Riverview. Where did they go? There weren’t the resources in place.”
What’s the solution when it comes to affordable housing?
Julie Chadwick: “Virtually all of the experts that I’ve talked to pretty much agreed that a major build-out of non-market housing is kind of what’s needed. And that that’s pretty much mostly possible on a federal level. But I hadn’t realized that there was such a history of it. And like you’re saying in the ’70s and ’80s there was a lot of co-op housing being built and that’s why Vancouver right now has a much higher rate of non-market housing than Nanaimo. And the interesting thing is that the money that’s invested pays itself back over time. Having invested into that land and into that property still pays off.
And that’s one of the questions that came up for me. I mean, if all of these private enterprises are getting into the housing market, why is that seen as kind of off-limits almost to governments? And in many ways, I think what we’re seeing now, from what I researched, is that allowing the market and the market only to govern, has kind of got us where we are. And I think now we’re kind of trying to play a game of catch up with what is really a crisis situation. You know, with healthcare and education, we’ve recognized that we can’t leave that up to private interests. But yet, with housing, it’s strange that we’ve sort of left it not only to the larger investment organizations like real estate investment trusts (REIT’s), but also left it even to smaller private landlords who, admittedly, are just trying to make a living themselves. But by no means are these people necessarily experts in the realm of housing. So I got a picture of a really kind of chaotic situation currently, where the markets are kind of out of control. And this isn’t just an issue for poor people.”
How does private investment impact the housing market?
Paul Manly: “The Liberals and Conservatives love foreign direct investment, they talk about it like it’s a great thing. But it’s not a great thing in our residential housing market. And in Vancouver, there’s a lot of foreign direct investment, and a lot of that money is used as a tax shelter for people who are hiding money from other countries. Because in our tax system you don’t have to declare who the beneficial owner is, you can have a proxy on paper, or a numbered company. And we have tax agreements with 115 different countries, including the Virgin Islands and the Cayman Islands, the Bahamas, all of these tax havens. And so we’re just part of this shell game. And then all of the money laundering that went through is the same thing, hiding money for organized crime, oligarchs hiding money and running it through casinos, drug money as well, and much of that has all gone into real estate. So in 2018, almost $6 billion was laundered in real estate. It’s quite incredible.”
I’ve talked to a few different people about how we can do more to regulate foreign investment in the residential real estate market. If you look at what happens in Mexico, you can’t buy housing in Mexico very easily. And you definitely can’t buy anything on the waterfront and within a certain distance of the ocean. Foreign owners just aren’t allowed.”
Julie Chadwick: “There is a huge economic shift happening where there is a lot of money flowing upwards to what Patrick Condon called the “investor class,” who now have such a huge amount of money to invest. And real estate has been seen as a safe bet. Especially with COVID, it was kind of this big question of where it was going to go. And with real estate crash, especially in Canada, interest rates were kept really low in anticipation of there possibly being a crash of the real estate market. And then real estate just emerged as the safe place to put your money in. The stock market is volatile, and a lot of other investments are uncertain. And real estate is just this kind of sure bet. So it’s both simple and complicated. But I really wanted to make it accessible to people. I really wanted people to have at least a small grasp on how things got this way. Because once you understand how things go the way that they are, you can then feel empowered to act.”
What about real estate investment trusts?
Julie Chadwick: “One thing that I thought was really interesting when I interviewed Michael Brooks from REALPAC, which is essentially a lobby group for investment interests in the real estate market. One area that I think everybody agreed on was that it’s a lot to ask the private sector to provide affordable housing. He was really frank about it: If you’re asking us to provide affordable housing, we’re going to cut corners. We exist to invest and make money. And there’s nothing wrong with that. They’re just doing what the market allows them to do. If there’s money to be made from evicting people and raising their rents, and they can make a return for their shareholders, they’re gonna do it. If there is no vacancy control, then it’s going to happen. I think everybody agreed that to leave it up to the private sector to create affordable housing, it’s just not really their area of expertise.”
Paul Manly: “I was reading stats about CAPREIT the country’s largest real estate investment trust. It’s apparently taking 14,000 units a year out of affordable housing stock and converting them into market-rate housing, by bringing them up to the market rate. And we’re building about 6,000 (non-market) units a year. And so we’re in a losing battle.”
What’s unique about rental affordability in Nanaimo?
Julie Chadwick: “Nanaimo sort of plugged along for quite a while being fairly affordable. We always looked at Vancouver like, oh God, how unaffordable they are. And then suddenly, it just seemed like things shifted here.
That was one of the things that really stuck out for me in Nanaimo. It’s gone up so much so fast. So one of the things that we looked at when we crunched some of the numbers was that the Canada Mortgage and Housing Corporation, their numbers are lower because they look at long-term renters as well, so it drives the averages down. But we looked at a lot of the stats when it came to current prices, people that were having to move many times and that are in the current market, we saw that the average rent for a two-bedroom unit had grown by 59 per cent in five years. I was left with a feeling of like, what are people doing? It’s scary. Currently, myself, I’m in a good situation. But I’m worried for people. And it doesn’t even seem to matter how much money you make. Everyone’s in a precarious situation if they’re renting.”
What’s the way forward for Nanaimo renters?
Julie Chadwick: “The third part of our series was centered on what can be done, what is being done by the city, what’s working. One of the examples that I heard a lot from various experts was Vienna, who have between 50 and 60 per cent non-market housing which is either run by the government or different nonprofit societies. And so there are examples out there of more functional ways of running a rental market and running a housing market. And then after that, we did a lot more articles that were solution-oriented. So looking at a senior’s complex that is really highly functional and working really well. And looking at the Rent Bank that was established in Nanaimo to ask: How are they helping?”
Paul Manly: “We’re seeing municipalities do different things. Like Burnaby has put in a rezoning for a tenant assistance policy. Because they’ve seen a lot of affordable places being bought up and then there’s renovictions or demovictions, where they’re just demoing the buildings and putting in larger buildings and a lot of that building stock was built with subsidies way back when. So there are things that municipalities can do.
In different provinces, you’re seeing where there’s rent and vacancy control, like in Manitoba, you don’t see things like real estate investment trusts investing there. Like in New Brunswick, buildings are bought up and the tenants are all told you that your rents are going up 50 or 80 or 100 per cent. And you’ve got two months’ notice on that, too bad so sad. Here, where we have rent control, somebody buys a building, they can’t do that, but what they can do is update the building and kick you out and then jack up the rent for the next tenant.
And in PEI they actually have a rule that you have to show that the renovation is necessary, etcetera, and tie the rent increase to the cost of the renovation.”
Julie Chadwick: “There’s a lot that municipalities can do in terms of zoning changes. This is something that I heard from Paul Finch at the BCGEU. He was the treasurer there. As a municipality, you can exchange density zoning for a certain percentage of affordable housing, which is something that is underutilized. There’s also areas of the city you can designate as rental-only to increase the rental stock.”
What about using cabins to house the homeless?
Paul Manly: “In Ladysmith and a couple of places in Duncan, what they did was they set up small tent communities where they had a maximum of 12 people in them. The one I went to in downtown Duncan was in a parking lot that they put fencing around to create a visibility barrier so you couldn’t see and a security guard there at night because vigilantes were attacking the camp. They provided tents, they provided water, they provided sanitation and they provided food. And then they changed out all of those tents for the cabins.”
Julie Chadwick: “I mentioned the sleeping bunks in the newsletter. And I did a story on whether tiny homes could be part of the solution. Victoria is kind of leading the way with that. In Nanaimo, there’s pretty much nowhere that you can legally live in a tiny home full time. There’s a lot of tweaking that can be done to the situation that could help. Whether tiny homes can be a broad solution, I wouldn’t say so. When I talked to the city about it. It was kind of like, yes, this is on our radar. If somebody’s living in a nice place and getting kicked out because they live there full time, yes, that’s an issue, and it’s something that we’re going to look at. But I think they’re really focused on secondary suites and then also looking at density. So if you want to look for good examples of tiny home villages actually helping with the housing problem, I think Seattle’s like a pretty good example where they have multiple villages. So that’s more aimed at the lowest income folks who are kind of getting off the street. And so they’ll often be in a transitional tiny home before they go elsewhere.
Expecting individual homeowners to create another suite or another little home in the backyard with lumber prices totally out of control, it’s a lot to ask individual homeowners to deal with the problem. Sure, secondary suites should be encouraged in many ways. They’re more appealing for families. I think the city is going in the right direction with that. But we’re at a point where there’s a lot of people that need affordable houses. I don’t know whether tiny homes and carriage homes are necessarily the only thing. If they’re gonna invest a bunch of money in building a carriage home, they want to be careful about who they rent to. And fair enough. They’ve pushed their savings to the limit building another small carriage home. I feel like a lot of this is kind of a distraction from the main issue.”
What about co-op and urban Indigenous housing?
Paul Manly: “Co-op housing is one of the areas that the National Housing Strategy will put money into. It would be good to see more of a government dedication to helping get co-ops going and working at all levels of government, because municipalities can sometimes provide land, provincial and federal governments can provide the funding. And then also with the urban Indigenous housing, there is a call for Indigenous housing that is culturally appropriate, so designed by Indigenous people for Indigenous people. We have a couple of good examples of that in the community with Salish Lelum and Tillicum Lelum youth and elder housing which is kind of modelled on a longhouse with a lot of shared amenities. And those houses are passive design, so it keeps the energy costs really low. So if you’re going to build affordable housing, make sure that we’re not building cheap so that we’re wasting energy with them.”
What’s happening at the federal level?
Paul Manly: “With the new Liberal government, they recognized the UN Declaration of Human Rights and a number of other declarations referring to housing. The National Housing Strategy came out and recognized right off the top that housing is a human right and that the federal government has a role to play. It’s something I campaigned on.
The Rapid Housing Initiative, which just came out prior to Christmas, announced $1 billion toward affordable housing, with $100 million for about 16 major cities across Canada, not including Nanaimo, and another $500 million fund that municipalities like Nanaimo and organizations like the Nanaimo Affordable Housing or Tillicum Lelum or Nanaimo Aboriginal Center could apply for. They had $4.6 billion in applications for $1 billion worth of funds. So they’re going to renew that fund in the budget. It’s still not enough to meet the demand right now for trying to deal with the homeless crisis. But all steps in that direction.”
How does the cost of lumber relate to the housing crisis?
Paul Manly: “The price of housing has just gone crazy. And the price of lumber has gone crazy, too. And I think that’s a symptom of shipping off raw logs. We know we’ve shut down all the mills on Vancouver Island, or a bunch of them. And now you watch the logs getting shipped out of Nanaimo every week. And then we wonder why we’re importing timber from Oregon where we ship the raw logs off to and commodity prices have gone up during the pandemic.” [end]
This conversation on rental affordability in Nanaimo is part of our solutions series, Making Rent, made possible by the monthly members who support this work. It was edited for clarity and length.