The following article was published in The Journal of Commerce highlighting VRS partnering with other agencies and businesses.
New “Micro-P3” procurement model used
Jessica Krippendorf correspondent
Vancouver Resource Society’s (VRS) newly opened Yew House in Kerrisdale is a flagship example of a kind of partnership that could open doors for developers and Vancouver’s neediest citizens. Referred to by the Independent Contractors and Business Association (ICBA) as a “micro-P3” project, the procurement model used in the development encourages public-private partnerships on a much smaller scale than traditional P3 projects. It allows the private interest more flexibility in how the space is used.
The projects are design-build contracts on facilities owned by a private company, but operated in part with government funding that comes with the end user. The process is almost the reverse of a traditional P3 project, which typically involves government agencies seeking private companies for design-build contracts that often include maintenance and operation clauses. In this case, VRS, a provider of housing and round-the-clock care for medically fragile individuals, is a non-profit that has the ability to acquire real estate and provide units for individuals attached to government funding. VRS works with a variety of private partners to acquire and renovate homes, buildings and apartments around Metro Vancouver. Developers looking to build multi-unit housing complexes can achieve the numbers they need to make a project viable by partnering with VRS to fulfill the city’s social housing requirement. Since 1988, the City of Vancouver has required that 20 percent of housing in new neighbourhoods be available for the development of affordable housing.
Although most federal funding for said projects ended in 1993, the city has continued the policy with the understanding that rezoning allows sites be made available in the long term, at a price within the budget limits set by BC Housing. In this scenario, developers can agree to make a number of units available for purchase by VRS, who then fills them with clients provided by various government-funded social service agencies like Community Living BC. “The developer meets their social housing requirement with our involvement and in some projects can achieve a bump in density,” said Murray Hamilton, public relations director for VRS. “We acquire units, the city is able to contribute by having more housing stock for its citizens and the health authority doesn’t have to build additional facilities for clients. It benefits everyone.”
The method is a change from typical social service provision, as agencies rarely own the property used for social housing. VRS purchased the original Yew House and land in the 1970’s for less than $100,000. The total demolition and rebuild completed in February had a $1 million budget and included high-end technologies like fire-proof wood, rapid air filtration and zone heating. It will house up to five young adults. The ICBA is a charity partner of VRS. The association donates the proceeds of its annual golf tournament to VRS, which makes its housing projects available to ICBA member contractors. Phil Hochstein, president of the ICBA said micro P3s mean more opportunities for smaller contractors and builders.
“The message is that small P3s are viable and unlike the big ones, allow smaller contractors to participate,” he said. “It brings private ingenuity and cost control to the project.” Yew House is the smallest project of this nature Hochstein is aware of. “The scale is an important piece because lots of people don’t think of these small projects in terms of their potential,” he added. “And, if they weren’t doing this, the individuals VRS serves could end up in institutionalized facilities.” VRS also bought a floor at Vancouver’s Woodward’s building, and is currently working in partnership with CitiMark on a residential tower proposal in North Vancouver. Hamilton says VRS is on the leading edge with this method because many social service providers don’t own the units they operate.
“We’re a non-profit, but we deal with more of a business model and have the wherewithal to acquire real estate,” he said. A developer in the process of pitching a project to the City of Vancouver may need a bump in density to make the project viable. “By aligning with VRS and our integrated social housing model, they may have a better opportunity to get the number of units they need for the project to work,” said Hamilton. Accommodating VRS clients requires only minor modifications to thresholds, door widths and bathrooms, but it’s more economical when these modifications are done in the design phase.
“We’re enabling medically fragile people to remain in their communities and maximize their independence and we can also be a valuable partner in the development process,” said Hamilton.
VRS wishes to acknowledge Jason A. Keenan for articulating the Micro-3P Procurement Model that reflects the relationship among the three parties involved in the redevelopment of Yew Street – VRS (a registered non-profit Society), ICBC (an association representing independent Contractors and Businesses in BC) and the government- (Ministry of Health).