Housing strategy must focus on affordability

Kirsten Bernas and Codi Guenther

Published in the Winnipeg Free Press, April 6, 2022

A NEW report issued by the National Housing Council reveals that most of the investments in new rental housing under the federal government’s much anticipated National Housing Strategy are not going toward those with the greatest need for public housing.

In fact, the majority of the housing that has been funded is only affordable to high-income households.

For example, one “affordable” development in downtown Winnipeg charges $1,756 a month for a bachelor — 2.3 times the average market rent for a bachelor in that area. To put this in perspective, a single person relying on social assistance for income receives $576 a month for rent.

Housing advocates across the country are disappointed. For years, they called on the federal government to create a national strategy to meet the housing needs of people living with low incomes and experiencing homelessness. At that time, Canada was the only G8 country without one.

The National Housing Strategy was finally launched in 2017 with much-needed ambitious goals. These include ending chronic homelessness in Canada by 2030 and removing 530,000 families from “core housing need” — these families are typically low-income renters who spend more than 30 per cent of their household income on rent.

In 2019, a requirement to improve housing outcomes for those in greatest need was embedded in federal legislation.

These are worthy goals. But it is not possible to end chronic homelessness and remove families from “core housing need” without an increase in the supply of deeply affordable housing whose rents are geared to a household’s income.

Unfortunately, the National Housing Council’s report makes it clear that two of the three major National Housing Strategy programs holding the bulk of the funding for creating rental housing will produce very little housing that is deeply affordable.

The Rental Construction Financing Initiative is the largest program in the strategy by total funding, with 20,000 units planned, in progress or completed. More than 60 per cent of the units created under this loans program are unaffordable to middle-income households. About 97 per cent are unaffordable to low-income families.

The National Housing Co-Investment Fund is the second largest program, with 10,100 units planned, in progress or completed. About 50 per cent of the units created under this program are unaffordable to middle-income households; approximately 65 per cent are unaffordable to low-income households.

In both programs, nearly all units created are expected to be unaffordable to people experiencing homelessness and to families with very low incomes — those who make up the majority of families in “core housing need.”

One major reason for these outcomes is that these programs define affordability in a way that targets the creation of housing that is only affordable to middle- and high-income households.

The Rapid Housing Initiative is the third of the three major rental housing programs in the strategy. The report says it “shows promise” for addressing “core housing need” by creating housing affordable to people with low incomes, including those experiencing homelessness. This is no surprise, as it is the only program that was actually designed to do this.

However, it is the smallest of the three programs, with only 4,800 units planned, in progress or completed. Further, the program wasn’t even part of the National Housing Strategy when it was launched; it was created in 2020 as a pandemic response and it is not clear whether it will continue to be available as a funding source throughout the rest of the strategy, which runs until 2028.

Several questions must be asked: Why has the federal government designed programs within the strategy in a way that makes it impossible to achieve the goals of the strategy? Why aren’t public dollars being prioritized for programs that provide housing for those who need it most?

The private rental market cannot be expected to provide adequate housing that rents for under $600 per month – it cannot make money under this model. It is the responsibility of all levels of government to step in and meet that need.