Can the federal government provide ‘a place to call home’ for all Canadians? - Carolyn Whitzman

Summary

The UN Sustainable Development Goals state that national governments must take the policy lead in providing housing as a basic right and need of all citizens. The 2017 National Housing Strategy marks a return to federal leadership in housing, after almost three decades of policy neglect. However, many commentators have noted that there is a large gap between the strategy’s laudable goal—over the next 10 years, addressing the needs of 1.7 million households who are living in unaffordable and/or inadequate shelter—and existing mechanisms to achieve that goal.

A good housing strategy needs clear definitions, realistic yet ambitious targets, and mechanisms to change track from luxury speculative housing to a system that meets most Canadians’ needs.

Background

• The federal government’s last housing strategy was developed in 1993. 
• In 1996, the federal government delegated the responsibility for affordable housing to provincial and territorial (P/T) governments. In Ontario, the responsibility was further delegated to local government in 2000.
• Since the late 1980s, when the federal government began to disinvest in non-profit housing, homelessness has increased exponentially. The current composition of the 235,000 people who experience at least one episode of homelessness in a year includes an increasing proportion of women, families, youth and newcomers to Canada, and a grossly disproportionate number of Indigenous peoples (28–34% of the shelter population, as compared to 4.3% of the national population). 
• Over half of Canadian households are finding it difficult to afford rent, let alone homeownership, in most urban areas closest to jobs, services and public transit. The resultant reliance on cars has huge implications for climate change, as does the energy inefficiency of many dwellings, especially in the North. When considering the true societal cost of unaffordable housing, transport and energy costs must be factored in.

Considerations

• From about 1965 to 1980, about 10% of new dwellings in Canada were built directly by government and other non-profit developers. In 1972, a federal task force report recommended that 45% of housing production be non-profit, preferably co-ops, supported by below-market government loans and housing subsidies. The federal government no longer releases information on non-profit housing completions, but in 2018, only 540 of 83,056 dwelling completions (0.65%) were cooperative in tenure.
• In the early 1970s, with a much smaller population, over 100,000 purpose-built rental dwellings were being constructed per year in Canada; by the late 1990s, that figure had fallen to less than 10,000 per year.
• The current issue is not the overall housing supply, but rather the oversupply of luxury housing aimed at domestic and foreign investors. For example, Vancouver currently has a high rate of dwelling supply per capita, just at the wrong price for most residents’ needs.

Recommendations

1. Canada must begin by reinstituting a national definition of affordable housing, based on a proportion of median household income for a metropolitan or regional area (known as AMI) spent on rent or mortgage, plus property tax. In the 1980s, it was 30% of income for the lower 40% of the population. It would be better to have three categories of households needing help: extremely low income (below 20% AMI, households on disability or other benefits); low income (households between 20–50% AMI, often earning minimum wage) and moderate income (50–80%, often young professionals). A standard definition would enable comparable information across jurisdictions and also move away from the harmful notion that affordable housing has anything to do with current average rents in larger cities. 
2. The federal government must prioritize the needs of extremely low-income households at risk of homelessness.  Housing First works.  Moderate-income rents may cross-subsidize extremely low-income households in affordable housing developments, but there is no way to provide low-cost housing that does not have a high level of construction subsidy, and extremely low-income households may also need a portable housing benefit to cover their share of operating costs.
3. The federal government must also prioritize the housing needs of Indigenous peoples, whether on reserve, in the North or in urban areas. This parallel strategy must be self-managed by Indigenous peoples, using local materials whenever possible and building Indigenous financial and construction capacity.
4. All three levels of government must work together within their respective roles. The federal government, which receives the lion’s share of tax dollars, must take primary responsibility for both direct financing of affordable housing construction and mortgages, and reforming indirect tax and finance levers to scale up affordable housing provision.  Provinces and territories must take primary responsibility for linking other infrastructure, such as public transit, schools and health services, to affordable housing. Local governments must enable affordable housing by setting ambitious targets; identifying, reserving and donating priority sites for affordable housing; zoning for affordability; fast-tracking affordable housing applications; and overcoming barriers like minimum parking restrictions in areas with good public transit.
5. The federal government must develop a set of targets linked to affordable housing needs for low-income categories, cost out mechanisms to meet these targets over the next 10 years and provide a transparent monitoring process. It must also link any cost-sharing or direct grants to provinces/territories and municipalities to the existence of housing plans that have similar criteria. Specific groups, including Indigenous peoples, older single women, women and children fleeing violence, young people aging out of foster care, people with disabilities, and refugees, have specific issues that affect their ability to access the limited amount of available affordable housing in most parts of Canada, and their housing needs must be specifically considered in plans. 
6. The federal government must support non-profit alternatives to speculative housing, with an aim of scaling up these alternatives to 30% of all new housing production in the next 10 years. These include, but are not limited to, public housing, community housing, cooperative housing, limited equity ownership and community land trusts. One of the best ways for the government to support these alternatives is to build confidence in the financial sector to guarantee loans. A second great mechanism for all three levels of government is to lease or donate underused and “lazy” government land for non-profit affordable housing. A third way, as practised in Quebec, is to fund technical assistance for non-profit development.
7. The federal government also needs to once again encourage private sector-led purpose-built rental with capped rents, with a goal of this constituting another 20% of new housing supply over the next 10 years. In order to be able to “compete” against luxury condominium development, it should guarantee construction loans and mortgages. It should require local governments to zone land near public transit corridors for purpose-built affordable rental, with 20% reserved for low-income households with a transportable rent subsidy. Local governments should also review property tax and other mechanisms that may favour condominium development. They must also preserve existing affordable rental housing from demolition or conversion to private ownership. Provincial governments must improve renter rights, including protection against racism and other forms of landlord discrimination. The federal government should support energy efficiency programs aimed at improving private rental adequacy, with capped rent increases as a condition.
8. All three levels of government need to review their tax mechanisms, which at present support speculation in an overheated luxury housing market. The federal government should eliminate capital gains tax exemptions for higher-income households. It should consider banking requirements to invest in affordable housing. Provinces and territories should consider “luxury home taxes” for properties over $2 million, increasing land transfer taxes for luxury homes, and improving vacant property, short-term rental and foreign investment regulations.  Lastly, local governments should consider increasing property tax rates for luxury homes.
9. The federal government needs to learn from what works, by allocating 10% of budgets for all pilot projects for evaluation and scaling up successful practices. It must provide transparent data that monitors progress towards targets and actual costs (not re-announcing various funding streams under new names). It must build up an independent CMHC (Canada Mortgage and Housing Corporation) that can undertake research and policy transformation, whichever party is in power. Lastly, it must support policy-focused housing scholarship and teaching, as it has in the past. This kind of transformational process will not occur without increasing the housing policy capacity of planners at all scales of government, along with non-profit housing providers.  There is no university-based housing policy and planning degree in Canada. This needs to change.
10. This kind of transformational process will not occur without increasing the housing policy capacity of planners at all scales of government, along with non-profit housing providers.  There is no university-based housing policy and planning degree in Canada. This needs to change.

About the author

Carolyn Whitzman has been professor of urban planning at the University of Melbourne and is currently the Bank of Montreal Visiting Scholar at the Institute for Feminist and Gender Studies at the University of Ottawa. She is on the organizing committee of the Canadian Housing Research Centre (“the Hub”), based at the University of Ottawa.