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'Major concerns': Birth of Burnaby Housing Authority sparks debate on potential for billion-dollar loans

Councillors approve next steps to create a municipal housing corporation to develop affordable rental housing, but some have concerns about bureaucratic bloat and financial risk.
Coun. Sav Dhaliwal opposed the plan to create the Burnaby Housing Authority as a corporation with an external board of directors.

Details on how the new Burnaby Housing Authority will be run triggered a debate at a Burnaby city council meeting Oct. 16.

Council ultimately approved the creation of the municipal housing corporation to build and develop rental housing, but Burnaby Citizens Association Coun. Sav Dhaliwal said he had “major concerns” around creating an entity council has “no direct control” over.

‘Unlimited scope’

Dhaliwal agreed Burnaby needs a dedicated entity to manage the city’s housing work, rather than it being done “on the side of a desk somewhere” in the planning department, but he opposed the structure of the authority as an external corporation with a board of directors.

He said it would give the board “unlimited scope” with the potential to put the city at financial risk, noting “it requires a lot of money” to build non-market housing.

He suggested the board could borrow a “basically unlimited amount of money.”

“Whatever they come back with, you’re going to have to pretty well approve it, otherwise why would you have an authority?” Dhaliwal said.

He said the loans would appear on the city’s financial books.

“And the loans would be hundreds of millions, and it could go into billions, and I hate to think what that would be,” he said.

Dhaliwal suggested keeping the housing authority as a separate city department to reduce the bureaucracy.

He added the new corporation will have its own CEO and CFO and pay for legal, human resources and IT support which he said would cost money that could go to building affordable homes.

The council-approved plan for the corporation includes a $2-million annual operating budget from the city till 2028 and a $475,000 start-up budget.

Council also directed staff to budget planned financing of $100 million from 2024 to 2028 from its reserve for the housing authority’s affordable housing projects.

The reserve has sufficient funds available for the planned financing, according to a staff report.

Independence from council wanted

Many Burnaby residents specifically told the city they wanted the board to be autonomous from city council, according to the report.

The original plan was to structure the board with a majority of council and staff, but it became a “major topic of discussion at engagement events” with “many participants” saying the board should primarily be made up of people with expertise in housing and real estate development.

Participants also stressed the need to select directors in a way that mitigates bias or potential conflicts of interest.

The city noted common feedback from the general public was a need for reassurance “there won’t be collusion or favouritism between city council and development companies.”

Housing crisis necessitates housing authority: councillors

While fellow BCA councillor Pietro Calendino agreed, Dhaliwal’s opposition fell flat with the rest of his party colleagues.

BCA Coun. Alison Gu said the housing crisis has reached a point where there is a need for a public body that works between the non-profit and private development spaces, with the values of non-profit providers to build self-sustaining, affordable housing and the capacity to operate on a larger scale like a private developer.

“Because of the weight of the housing crisis, we need to allow the housing authority every tool under the sun to maximize the potential for success,” she said.

BCA Coun. Daniel Tetrault spoke in favour of the housing authority, noting Burnaby has the second highest rents in the country.

“This is really hitting us hard in Burnaby,” he said. “So we need this housing authority, particularly to focus on purpose-built rentals, non-market rentals particularly, that provide the security that people need.”

Independent Mayor Mike Hurley said the housing authority offers the city the opportunity to do more on housing “in a very creative way.”

He said the city would “have to get into borrowing money and to borrowing enough to make these buildings equitable” whether the authority is structured as in-house or out-of-house.

Hurley added, “Council will still always have control over that, over what is acceptable.”

“However, we need to give the creative minds that are going to be on this board the opportunity to deliver housing, to deliver it in the most affordable way and to do it in a different way that lets us deal directly with the other levels of government to get funding, which we haven’t been able to do to this point.”

Staff will submit a package to the provincial government’s Inspector of Municipalities requesting approval to form the BHA as a municipal corporation.

Council approved the staff recommendation in a 6-2 vote.

Couns. Dhaliwal and Calendino opposed; Green Party Coun. Joe Keithley was absent.

“There is no one saying that this is a panacea to the housing crisis – this is just another tool,” the mayor said.

“And I think it can be a very useful tool, if it’s used properly and done in the right way.”

The business details

The city’s business plan accounts for a variety of expenses such as legal fees, marketing, office supplies and leases for an office space and equipment.

It also lays out $930,000 allocated to wages and benefits for a:

  • CEO ($275,000 salary plus benefits)
  • CFO ($220,000 plus benefits)
  • development director ($200,000 plus benefits) and
  • administrative coordinator ($80,000 plus benefits).

The city plans for the authority to be governed by a 10-person board, which is expected to include:

  • Three Burnaby council members
  • One senior exempt Burnaby staff member
  • Four private or non-profit housing experts
  • One finance expert
  • One legal expert

External board directors will be compensated for board meetings up to four hours with $275 and with $550 if the meeting runs more than four hours. Other meetings, training and conferences will have compensation at $150 or less per director.

Compensation will not be available to council or city staff directors.

The city is currently seeking qualified applicants to serve on the board.

📢 SOUND OFF: What do you think of the plan to create a municipal housing authority in Burnaby? Would you prefer it to be an 'in-house' or 'out-of-house' entity? Share your thoughts — send us a letter.

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