low-income housing

Boosting Canada’s low-income rental market

Candidates and policy makers strategize to stimulate affordable housing
Tuesday, September 15, 2015
by Erin Ruddy

Affordability is a concern for many Canadians, but low-income rental households face the greatest set of challenges. With the federal election fast approaching, party leaders have been busy unveiling plans to tackle what is now readily known as an “affordable housing crisis.”

According to new data released in the Rental Housing Index, Canada has more than four million renter households, of which 40 per cent are spending 30 per cent or more of their gross income on rent. This is above the level experts say is sustainable, particularly in cities like Toronto and Vancouver, where rising home prices and rental stock shortages are already limiting factors.

“Traditionally, spending over 30 per cent of income on rent was considered the threshold of problems,” says Greg Suttor, researcher at Wellesley Institute. “A more stringent indicator often cited is 50 per cent or more. Households in that situation are at high risk of arrears and of losing their homes. Most renter households below median income are spending 40 per cent, at least in cities such as Toronto and Vancouver, and this per cent of income is clearly too high.”

The Wellesley Institute recently updated its “Long Term Affordable Housing Strategy,” noting that 60,000 to 80,000 low-income renter households are added each decade to the wait-list in Ontario. At the current rate, only one third of the waiting list will ever be accommodated.

“Additional supply of affordable rental units each year falls far below the ongoing increment in low-income renters,” Sutter warns. “We estimate that production in the programs for new affordable housing (in any given year) is about one-fifth the scale of the ongoing increase in low-income renters. And not all low-income housing units are low-rent—some just have low-end market rents, meaning the imbalance is actually worse than one-fifth.”

The federal campaign trail

Given the extreme deficit of low-income rental housing, it’s no surprise that campaigning federal leaders have been vocal about the need to tackle this growing national crisis. In early September, the Liberals unveiled a plan to provide $125 million per year in tax incentives for developers and landlords to build and renovate rental units. The party has also promised to make investment in affordable housing and residences for seniors a high priority on their agenda.

“Investing in social housing is much more than putting a roof over people’s heads,” Liberal leader Justin Trudeau said during his speech at the Alexandra Park Community Centre in Toronto on September 9th. “It also creates stable, well-paid jobs that families can rely on.”

NDP leader Tom Mulcair has pledged in a similar fashion to create 10,000 new social housing units in Vancouver should his party get elected to government. Mulcair had previously announced plans to work with Canada Mortgage and Housing Corporation on an income tax incentive that would allow those investing in rental housing units to avoid capital gains taxes by putting money back into more affordable rental housing investments.

Back in June, the NDP leader spoke specifically to Vancouver’s severe shortage of rental stock and urgent need for affordable housing. “We’re working on very concrete proposals that would be very creative when it comes to fiscal incentives to build more affordable rental housing,” he said. “We have to make sure that a city like Vancouver is no longer in that trap that the people who work here can’t afford to live in the city where they work.”

Meanwhile, Green Party leader Elizabeth May announced her plan to introduce a three-pronged national housing strategy aimed at helping seniors and low-income Canadians. The strategy promises more funding for co-operative housing and will require that a percentage of all new housing units be reserved for affordable housing. May also plans to implement a guaranteed livable income to help low-income Canadians and youth buy homes.

“It’s time the federal government gets back into the business of investing in social housing, instead of off-loading its responsibilities onto cash-strapped municipalities,” she said.

To date, the Conservatives party has not made its affordable housing policy known, but rather has focused on home ownership and plans to offer young families incentives and tax credits toward purchasing and investing in their first homes. If re-elected, the party will raise the amount that first-time homebuyers can withdraw tax free from RRSPs up to $35,000. The party says it will also track the impact of home purchases by foreign, non-residents to ensure this doesn’t skew the market against Canadian buyers.

FRPO’s inaugural rental housing summit

On September 9th, The Federation of Rental-housing Providers of Ontario hosted its first new rental housing summit in Toronto, gathering housing experts, policy makers and the housing provider sector to hear first-hand solutions about how to increase the supply of new and affordable rental housing.

The summit highlighted innovative solutions implemented in Vancouver and featured a variety of notable panelists, including City of Vancouver Councillor Geoff Meggs, Vancouver’s Chief Housing Officer, Mukhtar Latif, and the President of Landlord BC, David Hutniak. In attendance were representatives from the Ontario government, the City of Toronto, and other municipal housing agencies.

Discussions centred around the City of Vancouver’s Rental 100 program, an initiative launched to boost rental construction by removing upfront cost barriers to new rental housing developments in Vancouver. Through the program, Vancouver aims to build an additional 1,000 new rental housing units per year, a fivefold increase from previous levels.

Also up for discussion was the need to build stronger partnerships between the government, the private and the non-profit sectors in an effort to ensure a joint commitment to supplying new rental housing, and that public policies must address housing needs across the entire continuum—from homeless shelters and supportive housing, to rental housing and more affordable homeownership options.

“This year’s Housing Summit facilitated a constructive forum for housing stakeholders to work together,” said Scott Andison, President & CEO of FRPO. “By considering new and innovative solutions to address Ontarians’ needs for new affordable rental housing, we can succeed in producing positive outcomes for more middle- and lower-income families.”

Erin Ruddy is the editor of Canadian Apartment Magazine

Photo: Rendering of AquaVista, courtesy of Waterfront Toronto. AquaVista features affordable rental units owned by the City and run by Artscape. The creation of affordable units in AquaVista helps Tridel, who, with partner Hines Canada are developing the Bayside Lands, meet affordable housing targets in the waterfront.   


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