HSC Regeneration Forum The Last Chapter First: Lessons Learned

Transcription

1

2 HSC Regeneration Forum The Last Chapter First: Lessons Learned May 28, 2012

3 Social Housing in B.C. BC Housing established in 1967 Growth in 50s, 60s and 70s purpose-built public housing Shift towards non-profit partnerships in 70s NHA-insured lender Devolution of federal housing in 2006 Currently serving 95,000 households, from portable rent assistance to supportive housing o Approx. 800 non-profit groups manage 60,000+ units o Only 7,200 units managed by BC Housing

4 The Housing Continuum Emergency Shelter & Housing for the Homeless Transitional Supportive & Assisted Living Independent Social Housing Rent Assistance in the Private Market Private Market Rentals Homeownership $214.1M 10,489 assisted $148.1M 19,047 assisted $317M 41,043 assisted $84.5M 26,456 assisted $11.3M Government-Assisted Housing in Partnership with Housing and Service Providers (Approximately 6% of the province s total housing stock) Partnership Initiatives, Consumer Protection (Building licensing, home warranty insurance, research & education)

5 Challenges: Expiry of Operating Agreements Ageing Housing Stock Changing Tenant Population Financial Pressures

6 Expiry of Operating Agreements 74% of buildings subsidies to expire by 2030 (n = 1270 buildings)

7 Client Groups Affected Independent seniors Low-income families

8 Ageing Housing Stock

9 Changing Tenant Populations Diversity of mandates 22% 2% Housing Supportive housing Health / support services Emergency / transitional housing 56% 20% n = 614 societies

10 Financial Pressures Financial strength is varied 31% 45% Positive Medium Vulnerable 24% n = 763 buildings

11 Where Do We Start? Portfolio Planning

12 A portfolio plan is based on an analysis of current conditions, all future needs and a sustainable transition plan to meet those needs. Current State Desired Future State Transition Plan 11

13 Portfolio Planning Outcomes Awareness of funding needs Defensible decisions Objective evaluations Optimal use of capital funding Risk management Alignment with organizational objectives Revenue growth Balance and diversification

14 What are some of the tools we use? Item Deliverable Tool 1 Need and Demand Analysis Market Segmentation Map 2 Building Condition Assessment Facility Condition Index 3 Tiering Tiering Model 4 Market Analysis 5 Innovation and Optimization Analysis Community Investment Strategy Asset Management Plan

15 Facility Condition Index (FCI) FCI is the ratio of capital liability vs. the replacement value of the components of a building FCI = Capital Liability ($) Current Replacement Value ($)

16 Facility Condition Index (FCI) FCI = Capital Liability ($) Current Replacement Value ($) GOOD Range: FCI (0% - 5%) FAIR Range: FCI (5% - 10%) POOR Range: FCI (10%-30%) CRITICAL Range: FCI (> 30%)

17 What are the Financial Pressures for our Assets? Cumulative Liability = $623,451, /11 Liability = $287,200, /11 FCI = 20% 2020/21 Liability = $570,519, /21 FCI = 39.6% 16

18 Portfolio Tiering Facilitates the segmentation of inventory Assigns scarce resources to higher priority projects Creates direct linkages to corporate priorities Identifies areas of potential benefit

19 Tier Definitions Tier 1 Solid financial performer and of social and strategic value Tier 2 Tier 3 Tier 4 Good financial performer and of social and strategic value Fair financial and performer with limited social and strategic value Poor financial performer of no social and strategic value 18

20 Tiering Options and Actions Tier 1 Retain and Maintain; Sell and Invest/Swap; Sell-Lease- Back; Property Bundling; Commercial Opportunities; Densification Tier 2 Tier 3 Tier 4 Retain, Maintain, and Invest; Partnerships/Leveraging; Densification; Adaptive Re-use Market for Sale; Hold Strategy; Interim Re-Use; Property Bundling; Partnerships Demolish and Hold; Demolish and Re-build; Demolish and Sell; Phased Rust Out; Donation; Land Lease; Commercial Opportunities 19

21 Scope of Portfolio Tiering The 2010 / 2011 scope included all directly managed inventory (approx. 8,000 units) Tiering was completed at the property level (i.e. a high density development is considered a single property) Total of 192 developments (567 buildings) tiered Assessed Value of the inventory tiered = $761 million Deferred maintenance of inventory tiered = $443 million

22 Where do we go from here? Redevelopment Disposition Reinvestment Alternative Financing

23 Redevelopment

24 Redevelopment: Little Mountain Oldest social housing site in B.C. Built in the early 1950s acres with 224 units One, two and three bedroom row-houses Costly repairs and maintenance Redevelopment process began in 2007

25 Financial Aspects Purchase price o Land price o Construction/transfer of 234 units Schedule of payments o Deposit o Payment on completion o Construction of units o Periodic payments on completion of market units o Non-interest bearing VTB mortgage to 2021

26 Principles of Redevelopment Tenants First Relocation of tenants Replacement of subsidized units All tenants have option to return

27 Vision for Little Mountain Variety of buildings Open public spaces Public amenities 1,600 units market housing 224 subsidized 10 new Aboriginal units

28 Redevelopment: Anavets Existing development of seniors housing 3 buildings of 29 units each Under-utilized land Partnership with private developer trades construction of new, larger building for excess land Interim construction loan

29 Redevelopment: Anavets Replace existing units Market development will be 104 residential condos

30 Disposition

31 Benefits of Disposition or Divestiture Portfolio Benefits Description 1. Risk Transfer Many properties are vacant or serving as market rentals 2. Revenue Generation 3. Operational Savings Captures unrealized value for reinvestment into other housing offerings Scattered housing has higher per unit utility, operating and maintenance costs Reduced Capital Liabilities Rationalize Underperforming Assets The scattered housing portfolio represents approx. $18.5 million in capital liabilities for PRHC (avg. FCI > 0.50) Average age profile of all PRHC assets exceeds 40 years; many properties are not well aligned with priority client groups 30

32 Program Scope Easy: Medium: Difficult: Vacant properties; properties rented at or near market rates Properties that require coordinated tenant relocations ; properties with high land value that may require unit replacement Client groups with extended tenure; properties with difficult to coordinate debentures and smaller communities where multiple relocations are required 31

33 Assessment Criteria Portfolio Benefits Description 1. Alignment with High priority Client groups Does the property currently serve one of our high priority client groups? 2. Housing Demand by community Turnover, vacancy rates, other economic indices 3. Building Condition Outstanding capital liabilities; higher per unit O&M costs 4. Redevelopment Potential Housing lot size; value of land vs. improvements, proximity to major amenities 5. Displacement Factors Outstanding debentures, length of tenancy for existing client, options for relocation 32

34 Recommendations Supports for tenants will be provided and relocation standards will be developed as necessary Sell or transfer for maximum return to ensure 1 to 1 replacement of units Explore all options, including market sales, transfers to 3 rd parties or conversion to affordable homeownership All sales or transfers proceed on the basis of market value only Earmark revenue generated for transaction costs and reinvestment into new units where necessary 33

35 BC Housing Divestiture Plan Phase 1 Easy Phase 2 Medium Phase 3 Difficult Timeframe 0 12 months months > 2 years Number of Units Assessed Value $ 6 million $ 15 million $ 19 million 34

36 Reinvestment

37 % Annual Energy Savings Energy Retrofit Pilot 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Chimo 1 Chimo 2 Grandview Terrace Hall Tower ll MacLean Park Seven Maples Woodcroft Amberlea Bonaventure Champlain Heights Cloverhurst CUC Lodge Bethel Pendera Redwoods

38 Energy Retrofit Initiatives: Greenbrook 128 unit row house development built in 1974 $22 M retrofit included: New high performance envelope, roof Solar panels on roof Low flow fixtures Extensive metering (energy & water) Goal was near-zero GHG emissions Achieved 86% GHG reduction in first reporting period

39 Renovation and retrofit Greenbrook

40 Alternative Financing

41 P3 Financing: SRO Renewal Initiative Two discrete programs of work proposed: 1. Recapitalization of 13 properties; and 2. Consolidation and standardization of facilities management functions; Projected capital cost = $ million Federal contributions to date = $30.0 million

42 Why a P3 now for BC Housing? P3 Canada provides a 25% non-repayable grant contribution for eligible capital costs All capital projects with a provincial contribution of $50 million or more will be considered first to be built as public-private partnerships (P3s) unless there is a compelling reason to do otherwise Agencies are encouraged to be innovative and to challenge traditional service delivery approaches and assumptions. Capital Asset Management Framework (CAMF)

43 SRO Renewal Initiative: Challenges Average age profile of SRO hotel properties: 99+ years old All properties are considered municipal heritage sites Many are considered national historic sites Inefficient building systems: most beyond end of service life Some restoration work completed to date (health & safety priorities) SROs represent 20% of all outstanding capital liabilities within BCHMC portfolio

44 SRO Renewal Initiative: Objectives Reduced energy consumption and GHG emissions; Improved livability for client groups Offset capital & life cycle costs thru equity contributions from the private sector Reduced long term capital liability profile Strategic risk transfer Leverage opportunities to enhance local economic and community development Scaleable model for urban renewal

45 HSC Regeneration Forum The Last Chapter First: Lessons Learned May 28, 2012

46

47

48 Brief History Summer 2007 Province of BC Issues RFP- Request for Proposals for Little Mountain Spring 2008 Holborn was selected as Developer

49 December 2009 First Public Open House

50 February 2010 Visioning Workshop with Stanley King

51 September 2010 Public Open Houses & Advisory Committee Meetings. Site Plan Consensus

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70