November 22, 2016 10:32 pm
Updated: November 23, 2016 1:29 pm

Owners take advantage of low-cost housing program in Vancouver’s Downtown Eastside

WATCH: Owners are taking advantage of a low-cost condo program on the Downtown Eastside, and it doesn't look like there's anything anyone can do about it. Nadia Stewart explains.

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While the province has tried to address the scarcity of housing in Vancouver, a Global News investigation reveals B.C. Housing is dropping the ball on ensuring affordable housing actually remains affordable.

In late 2015, a new condo development — Sequel 138 — opened in the Downtown Eastside. The controversial project featured 18 affordable housing units and 79 condos for sale. Only buyers with a combined household income of less than $85,000 a year qualified to get into one. In return, they paid little to no down payment.

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For Charly Jarrett and her husband, it was an opportunity they couldn’t afford to miss. Back in March, their dream came true.

READ MORE: B.C. Housing no longer collects data on homeless people turned away from shelters

“We were actually able to buy in Vancouver, which we never ever thought we could,” Jarrett said.

Her excitement soon turned to disappointment after learning some condo owners at 138 E. Hastings  Street were taking advantage of the system.

“It seems people bought this as an income opportunity,” she said.

All buyers signed a covenant with B.C. Housing and one clause clearly states for the first two years owners wouldn’t use the property for anyone but themselves. Instead, Jarrett says some units are being rented at market value in one of the most disadvantaged neighbourhoods in the province.

“Just on Craigslist alone, we saw seven or eight units,  but getting to know people, we know at least a dozen renters in the building,” Jarrett said.

In separate statements, both Jarrett’s strata and property manager said it’s up to B.C. Housing to deal with the rental concerns.

B.C. Housing launches investigation

The covenant buyers signed was part of the affordable home ownership pilot project, BC Housing said in a statement to Global News. While owners should intend to live in the unit for two years, there’s no actual requirement for them to stay. What’s more, buyers were not prohibited from renting out their units.

“Under the initial terms of the agreement, no cap was placed on the amount of rent owners can charge tenants. B.C. Housing is investigating the concern and going forward, this clause will be eliminated in all similar agreements by prohibiting rentals and leases,” reads the statement sent to Global News.

For now though, people can still game the system, using a loophole the government is very much aware of.

“I got really disillusioned with the system,” Jarrett said. “I think they never really had a follow-up plan.”

© 2016 Global News, a division of Corus Entertainment Inc.

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