5,000 affordable housing units lost, 10,000 on the line as non-profits lose subsidies
As agreements expire, non-profit owners say they could be forced to hike rent or sell
Thousands of social housing units could land in private hands as operating agreements between the Manitoba government and non-profit organizations expire, creating a funding gap that may force organizations to sell buildings they can no longer afford.
In Manitoba, there are 200 non-profit housing organizations, and they provide about half of the province's social housing.
Many of these organizations signed an agreement in the '80s and '90s that allowed the non-profits to own and operate a building, while for the duration of the mortgage on the building, the provincial government provided a subsidy so they could offer units to low-income tenants.
Now those agreements are coming to an end and the result could be a repeat of what happened earlier this year, when Lions Place — a 284-unit non-profit housing complex in Winnipeg — was sold to a private Alberta firm.
"My worst fear is that a number of non-profits will have to sell their buildings, and we'll lose what has taken decades to build," said Christina Maes Nino, executive director of the Manitoba Non-profit Housing Association.
These agreements were designed to last the life of a building's mortgage in the belief that once it was paid off, the organizations would use the funds once used to pay the mortgage to continue to offer subsidized rent and pay for capital repairs.
Costs high
Fast-forward to 2023.
Maintaining a building is expensive when things like property taxes, insurance and security are factored in, and many are 30 to 35 years old and in dire need of repair, Maes Nino said.
"It didn't take into account that the organizations … were never allowed to make the major capital repair needs or build up a capital reserve that is now required," said Maes Nino.
"They can't do that on just the rent alone, because all of the tenants are very low income."
The agreements on 5,000 of these units have now expired, provincial government briefing documents say, and the agreements on another 10,000 units will end in the coming years, Maes Nino said.
The majority of the agreements expiring in the next five years are connected to rent-geared-to-income units, what are called "deeply affordable" units where the lowest income people live, Maes Nino said. They rent for 30 per cent of a tenant's income.
No good options: Maes Nino
Once an organization's agreement ends, there are three options, Maes Nino said: sell the building, continue to offer the units at the rent-geared-to-income rates but let the building fall into disrepair, or bump up the rent to fund operations.
"None of those are good options," she said.
"If we lose our rent-geared-to-income housing, that means that someone who's in very low income can't afford the rent … and with this happening at a great scale, there's not going to be anywhere else."
A CBC investigation found that social housing owned and operated by the provincial government is in disrepair, with thousands of units vacant while thousands more people languish on the waiting list just to get in. The non-profit sector manages almost 5,000 of these units and government subsidizes a further 12,600 units owned by non-profits and co-operatives.
"The nonprofit sector has had this partnership with government providing social housing for decades," said Maes Nino.
"All we need to do is continue that partnership. So continue funding these organizations to do the great work that they've been doing."
CBC News reached out to several non-profit housing operators, but none wanted to speak on the record because they are hoping the province will come to the table with a solution.
All expressed frustration with the uncertainty of the situation and said selling their buildings would be the absolute last option and not one they are entertaining at this point.
Lions Place
In January 2023, Lions Place was sold to Mainstreet Equity Corp. after owner Lions Housing Centres said it could no longer afford to keep up with the rising costs of insurance, taxes, security, pest control and regular utilities, along with multimillion-dollar capital repairs needed.
The Lions Place subsidy agreement with the province expired in 2018, and residents were initially told their monthly rent would jump $169. However, the non-profit entered a two-year agreement with tenants to use its own money to subsidize rents.
Lions Housing Centres also owns a 32-unit building on Furby with an agreement that ends next year. All units are rent geared to income.
Gilles Verrier, executive director of Lions Housing Centres, declined to do an interview, but said in an email that they have been asking Manitoba Housing for three years to come up with a solution.
There is no benefit for a non-profit to offer rent-geared-to-income units if the government isn't involved, he said.
And when a building is sold, it "only leads to more slum landlords and eventually a decrepit building that needs tearing down. Nobody wins," he said.
He doesn't know what the future holds for the Furby building, but the decision "will be based on Manitoba Housing's response."
CBC News looked at the last 10 years of housing data from annual reports and Manitoba government documents, which say the Manitoba Housing and Renewal Corporation provided housing assistance to approximately 35,000 households every year until 2023-24.
The figure dipped to 29,000 in the latest Manitoba Families estimate document. The decline "was due to expired agreements of private, non-profit and co-operative housing operators," the document says.
A spokesperson for Manitoba Housing said it wouldn't be accurate to say these units are "lost," because some of the non-profits will continue to offer subsidized rent using their own funds.
However, several non-profit organizations told CBC News they were forced to bump up their rent-geared-to-income rental units to median market rent in order to cover the loss of the subsidy.
Block funding
Earlier this year, the Manitoba government proposed $1.4 million as the start of a block funding plan to help bridge the funding gap after the organizations' agreements expire.
The amount offered was scoffed at by some non-profit providers during a June webinar they had with a Manitoba Housing official.
"It's a drop in the bucket for what is needed," said a Manitoba Non-profit Housing Association member representing housing co-ops.
Many said there were too many questions about the funding model, as the official said he couldn't answer most questions until the funding is approved.
"We need to make sure that we continue to keep the rent-geared-to-income housing," the executive director of a non-profit housing organization said.
"We know that's the most vulnerable person that is just on the edge of homelessness."
'There is an urgency'
The official said the funding model wouldn't be approved until after the election, so they couldn't provide all the information, but hopefully more funding would be approved in the next fiscal year.
"It is just completely silly. I could use that for one roof," another provider said about the $1.4 million on the table.
Maes Nino said the proposed model is a good starting point, but she worries the province doesn't understand the gravity of the situation, given the initial financial offer.
For her, the biggest concern is what happens to those who rely on these units.
"We can assume that it's going to lead to an increase in homelessness. We can assume it's going to increase people who are couch surfing or living in desperate conditions," she said.
"There is an urgency. These [agreements] are expiring."
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