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Canada’s social housing stock lagging behind peer countries

Federal government stopped investing in housing in the 1990s
Sean Fraser, Minister of Housing, Infrastructure and Communities, speaks during an announcement outside a rental housing building being developed by the University of British Columbia Properties Trust, in Vancouver, on Wednesday, August 16, 2023. THE CANADIAN PRESS/Darryl Dyck

If a single mother with a newborn baby starts looking for city-subsidized housing in Canada’s largest urban centre today, she might see her child enter high school before they find a new home.

Average wait times for subsidized housing in Toronto span from eight to 15 years depending on the unit, according to 2022 data from the city.

The shortage of homes is so severe that the city has been encouraging people to consider subsidized housing “as a long-term housing plan, not an immediate solution to housing needs.”

Toronto is far from the only city facing such a shortage. The long wait times are a symptom of the disconnect between supply and demand right across the country.

Non-profit and social housing is usually administered by non-profit organizations and municipalities that aim to offer affordable rent for low-income earners struggling to pay market prices.

Housing expert Carolyn Whitzman said the shortage of non-profit housing can be traced back to the 1990s, when the federal government stopped investing in housing.

“There was this vague notion that the private sector would somehow provide low-income housing, but that’s never been true. And it certainly hasn’t been true in Canada,” Whitzman said.

Many experts qualify the 1990s as a period of fiscal austerity, when subsequent federal governments tried to rein in deficits through program spending controls, freezes and cuts.

Earlier this week, Housing Minister Sean Fraser told reporters housing should not have been among the cuts.

“For the better part of the last half-century, federal governments — of different partisan stripes, by the way, Liberal and Conservatives — have stepped away from forwarding affordable housing in this country,” he said in Burnaby, B.C.

“That should never have happened, but it did.”

Today’s Liberal government is trying to make up for past choices. But experts and advocates say the dollars currently earmarked for affordable housing pale in comparison to the need.

Earlier this year, Scotiabank economist Rebekah Young published a report calling for a doubling of the social-housing stock.

While that may sound ambitious, Young noted that doubling the stock would only bring Canada to the OECD peer average.

More than 10 per cent of the population — or 1.5 million people — were in “core housing need,” according to 2021 census data. Meanwhile, social housing represents just 3.5 per cent of the country’s total housing stock, or 655,000 homes.

A person is considered to be in core housing need when they have to spend more than 30 per cent of their before-tax income on housing that meets a minimum standard.

“The moral case to urgently build out Canada’s anemic stock of social housing has never been stronger. The economic case is equally compelling,” Young’s report said.

It added that while governments are trying to address the needs of low-income households with various transfers, the cost of those benefits and programs will continue to climb if the underlying housing issue isn’t addressed.

Prime Minister Justin Trudeau’s government is trying to address that through its national housing strategy, which has been lauded as the federal government’s return to the housing space.

Launched in 2017, the strategy pledged more than $80 billion over 10 years toward programs administered by the Canada Mortgage and Housing Corporation, many of which focus on increasing the supply of affordable housing.

By 2028, the strategy promises to cut homelessness in half, lift more than half a million families from housing need and build up to 160,000 homes.

But its success has been mixed.

Some of the strategy’s failures were brought to light in a report from the federal auditor general last fall. It found that despite the pledge to reduce homelessness by 50 per cent, Ottawa doesn’t actually know how many homeless people there are in the country.

The effort to get more affordable housing built quickly has also not gone as planned.

A document put together by the CMHC last fall in response to a written question from a member of Parliament shows the majority of approved units had not yet been constructed, despite the program’s initial aim of getting most homes built within 12 months.

The CEO of the Canadian Housing and Renewal Association, a non-profit group working to advance social housing, said the national housing strategy was an important step.

“That said, a lot has changed in the past five years,” Ray Sullivan said.

“Construction costs are much higher, interest rates are much higher, the need is much higher. So it really isn’t an urgency to go back to the table and update it for 2023.”

Sullivan said one issue is that the rapid housing initiative has been rolled out on a year-by-year basis, offering little stability for affordable housing providers.

And given that interest rates and costs have risen, the money initially invested is simply not enough, he said.

For non-profit organizations in the affordable housing space, government funding can make or break a project.

Jeff Neven, the CEO of a Christian affordable housing charity, said that’s definitely the case for his organization. The charity, Indwell,offers what’s considered to be deeply affordable rent to people recovering from mental health and addiction issues in southwestern Ontario.

To be able to offer rent of about $550, Neven said Indwell can’t take on much financing debt to build more homes. That’s why government funding has historically helped with most of the construction costs.

But Neven said the national housing strategy has gotten less generous, making it impossible to keep building.

“We probably have 25 projects right now that can’t go forward without federal funding, and there’s no pathway currently with the current programs to go forward,” Neven said.

The Conservatives have not articulated a policy position specific to non-profit housing.

The NDP, on the other hand, has been particularly vocal about the lack of affordable housing, calling on the federal government to spend more money.

Housing measures were also included in the confidence-and-supply agreement between the Liberals and NDP, in which New Democrats agreed to support the minority government on key votes through 2025 in exchange for movement on shared priorities.

NDP Leader Jagmeet Singh has been touring the country to talk about housing and has proposed creating a housing acquisition fund that would help non-profits acquire affordable homes.

It’s a proposal housing advocates and policy thinkers have endorsed.

This week, the Canadian Alliance to End Homelessness, the Smart Prosperity Institute and REALPAC, a national real estate industry group, collaborated to release a report with recommendations on how to end the national rental crisis.

Itcalls for the creation of an acquisition fund that would facilitate office-to-residential conversions and help non-profit housing providers purchase existing rental housing projects and hotels.

Ultimately, many of the policy proposals require much larger investments from the federal government.

Although the Liberals have been hinting that they’ll have more to say on housing over the next year, Sullivan said he’s concerned there won’t be enough money to bridge the gap.

“My worry that the government is not prepared to put up significant funds to actually make it happen,” Sullivan said.

Over the last year, the federal government has signalled that it’s trying to limit its expenditures so as not to fuel inflation.

Its 2023 federal budget was narrowly focused on investments in the green economy and health care, with very few new policies on housing.

Mike Moffatt, a housing expert and economist who serves as senior director of policy and innovation at the Smart Prosperity Institute, said the government has to decide what kind of spending is worth the criticism.

“At some point, they have to make a decision,” he said.

“What would we rather be criticized for: spending too much money or allowing the housing crisis to continue?”

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