Social Policy in Ontario

Affordable housing: A crippling crisis with an obvious solution

Posted on September 24, 2015 in Inclusion Debates

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TheStar.com – Business
Sep 24 2015.   By: David Olive, Business Columnist

If you wanted to spur an economic renaissance in Canada, start by tackling Canada’s critical shortage of affordable housing.

Such a prolonged shortage translates into a workforce insufficiently skilled to make Canada thrive in a fiercely competitive global economy. It accounts for a population whose health falls short of that required to contribute more powerfully to a dynamic economy. And it imposes an expense on Canadian taxpayers in ever rising healthcare costs.

It accounts in large degree for higher-than-average crime rates among selected population groups. It imposes a social tax, measured in both dollars and diminished peace of mind, the enormity of which is only hinted at by the expense of our criminal-justice system.

Just one example: Thousands of women and their children are trapped in dangerous households of chronic spousal and child abuse because they lack alternative, first-rate shelter. Adult victims are unable contribution to society as much as they’d like to; their children are discouraged in their educational striving and sports and recreational pursuits. They are also confronted each day with the worst kind of role modelling — a bad start for the next generation of Canadians.

The shortage keeps Canadians from relocating to regions with more and better economic opportunities, but with housing costs in that are beyond reach.

The mobility myth

For more than a century, “labour mobility” has ranked high among the factors accounting for North America’s rapid economic progress. But over the past three decades, it is becoming a cruel myth. Vancouver, Toronto and Calgary, with their increasingly out-of-reach housing costs, risk pricing themselves out of the global market for the best and brightest workers, who simply cannot afford to live there.

According to 2015 Royal Bank of Canada report, owning a detached bungalow in Toronto home eats up 59.4 per cent of pre-tax household income, and the figure for Vancouver is 88.6 per cent.

And Corporate Canada is hit with the costs, passed on to consumers and undermining their global competitiveness. They have to pay or subsidize exorbitant housing costs for highest-value employees they wish to re-locate to communities whose housing costs have skyrocketed. Lack of affordable shelter also impedes the seamless integration into the Canadian family of immigrants.

Our economic stewards have failed to grasp the economic damage wrought by lack of affordable housing. For the corner grocer and corporate CEO alike, a Canadian workforce heavily populated with workers who are a paycheque away from losing their homes yields a sorry harvest of high turnover, absenteeism, and “shrinkage” (employee and customer theft).

A 2014 report on Canadian economic conditions by the Organization for Economic Cooperation and Development (OECD) warned of the nearly one in four Canadians who live in communities with housing prices that are “seriously or severely unaffordable.” Almost 40 per cent of Canadians are at risk at losing their place to live. The OECD understandably saw this as a dagger pointed at the country’s future prosperity.

Rental rage

The crisis affects renters as much as those clinging to traditional home ownership and are coping with rising mortgage-payment, property-tax and utilities expenses.  “Rising house prices have worsened affordability disproportionately for (Canadian) renters,” notes the 2014 OECD report, “who tend to have lower incomes than homeowners. “Maintaining a dynamic stock of good-quality and affordable rental housing is important for supporting labour mobility and immigration as well as good social, health and educational outcomes.”

Yet only 10 per cent of Canadian housing built in the past 15 years has been rental accommodation, despite the fact that about 33 per cent of Canadians are renters. It’s estimated that about one in five those renters is in crisis, spending more than 50 per cent of pre-tax income on shelter. That is the finding of a recent, exhaustive study of more than 1,000 municipalities and regions from coast to coast.

Renters, of course, skew to young people struggling to pay tuition; or with entry-level incomes; or a combination of the latter and a mountain of student debt. They are also senior citizens trying to get by on fixed incomes, quite often on their own, without a spouse or supportive children.

The proliferation of luxury condo construction, and a paucity of rent-geared-to-income residential development, have been catalysts in the current shortage of affordable shelter. So scarce are affordable rental units in the Greater Toronto Area that it’s not uncommon for renters to pay $500 a week in the ex-urban 905 region. Yet renters usually are overlooked among the front-line victims of our critical shortage of affordable accommodation.
While the crisis is conspicuous in big cities, it is even more acute in suburbia, small towns and remote regions.

The condomania among city developers has been driving low-paid service workers to accommodation ever further from their downtown workplaces. That has jacking up rental prices for modest and even marginally liveable accommodation in places like Burnaby, Coquitlam, Mississauga, Vaughan and Milton. In many of these ex-urbs, about 30 per cent of renters are forced to pay more than half their income on shelter, compared with 22 per cent of renters in Toronto.

An easy answer

Some crises are devilishly difficult to figure out. This one isn’t.

The increasing geographic remove people in housing distress makes them “out of sight, out of mind” for policymakers. That same factor has long kept Canada from addressing the entire range of aboriginal issues.
Then there is the perception that municipalities have chief responsibility for ensuring adequate affordable housing. But most municipalities are budget-pinched.

The NIMBY factor has played its unfortunate part, discouraging social-housing development in towns and big cities alike. Another culprit is the feds’ withdrawal from their commitment to affordable housing.
There is also a great deal of discrimination against would-be renters who are victims of domestic abuse. Many landlords would rather not take the chance of having an abusive alcoholic ex re-appearing in the victim’s life at her new rental accommodation.

The crisis is poised to worsen before it lessens. Many of the decades-old federal commitments to mortgage financing of low-cost apartment buildings are set to expire. That in turn will eliminate some $1.7 billion in annual funding for as much as one-third of the country’s close to 620,000 affordable housing units. The worry is that developers will convert affordable housing stock to higher-priced condos or rental units, or that they will slip into disrepair.

So, what’s to be done?

If a demand for a National Housing Strategy (NHS) seems a grandiose call to arms, note that the scattergun approach to this crisis hasn’t worked. Designing a “housing for all” solution requires participation by, and co-ordination among, all levels of government along with non-profit groups and a near-AWOL private sector. And that secure funding and demanding deadlines are required.

For that, we need an NHS.

Elements of that strategy include renewed federal funding to maintain and upgrade our existing stock of social housing; and new investments in state-owned housing, co-ops and other forms of social housing. The tab for that, according to the Canadian Housing and Renewal Association, would be about $2 billion a year — or 0.7 per cent of the latest federal budget’s total spending outlays.

And it means an additional CHRA-estimated $2 billion to build new, state-of-the-art social housing to accommodate a growing population, providing affordable housing to those many Canadians not sheltered in existing social housing.

Both the CHRA and the City of Toronto are enlisting signatories to their campaigns to pressure provinces and the feds to adequately finance social housing. These efforts doubtless strike many as special pleading, but they are actually a call to bolster our common wealth, now and for the future.

Affordable housing advocates often are allied with municipalities. Sometimes this relationship of mutual reliance finds affordable-housing champions cutting slack for municipalities that fail to confront the NIMBY syndrome.

We won’t make much progress without emboldening civic bureaucrats and politicians at all levels to take a stern line with constituents about the tremendous merits of safely housing our fellow Canadians. It is troubling that so many of us quickly respond with big hearts and open pocketbooks to people in distress abroad, yet strenuously object to a proposed social housing facility on our own street.

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Tags: budget, crime prevention, Health, homelessness, housing, Indigenous, jurisdiction, mental Health, poverty, standard of living

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