The federal government is making changes to two of its largest housing programs in the hope that the move will speed up the construction and renovation of much-needed affordable housing.
Last year’s CBC News investigation found that many of the “affordable” housing projects under one of these programs have projected rents that are higher than the local average. And critics have called for the renewal of another multi-billion dollar flagship initiative.
Home defenders, who have criticized the two programs in the past, are now taking a wait-and-see approach to change.
“I think they hear from the public that the general public is very concerned, very upset about the lack of affordable housing across the country, no matter where you are, no matter where you fit into the housing spectrum,” said Jeff Morrison, CEO of Canadian Non-Profit Housing and Renovation Association.
The federal budget for 2022 announced changes to the initiative to finance rental construction and programs for national housing co-investment funds, which together represent more than half of the money in the National Housing Strategy for $ 72 billion.
Jeff Morrison is executive director of the Canadian Housing and Renovation Association. (Presented by the Canadian Housing and Renovation Association)
The Rental Financing Initiative, which provides cheap construction loans for eligible projects, has been widely criticized for using a definition of affordability based on local average incomes.
This eventually created many rental units at a price higher than the average rents in the area. Some units cost $ 1,500 a month or more, including a residential building in Moncton, NB, a city where average rents last year were just $ 800.
The budget announced an “intention to reform” of the program, including a goal of “at least 40 percent of the units it maintains to rent equal to or less than 80 percent of the average market rent in their local community.”
Housing Minister Ahmed Hussein rejected requests for an interview.
Asked in an unrelated statement in St. John last week about what the government is trying to achieve with the reform, Hussein said “these are some changes to make the program even more accessible.”
Newfoundland and Labrador Prime Minister Andrew Fury, left, sits next to Federal Housing Minister Ahmed Hussein during a announcement to fund a gathering place in St. John’s on Friday. (Paul Pickett / CBC)
National Housing Consultant Steve Pomeroy of the Canadian Housing Evidence Collaborative said the adjustment is more in line with other affordable housing programs offered by Canada Mortgage and Housing Corporation.
He believes the government may be trying to end the program altogether or change its focus from developers to nonprofits. He said the rental initiative was needed when it was originally designed, but that “times have changed”.
Pomeroy said that before 2015, few entrepreneurs had built much-needed rental housing. According to his analysis, construction then began, but only about five percent used the rental construction initiative.
“So if 95 percent of hired developers who are massively increasing their participation levels haven’t needed it, well, well, why do we need the program anymore?” he said. It was a good time to rethink and reset.
Steve Pomeroy is a consultant on housing policy in Ottawa and a senior fellow at the Center for Urban Studies and Education at Carlton University. (CBC)
The federal budget also announced changes to the National Fund for Co-Investment in Housing, a $ 13.8 billion construction loan program for mostly nonprofit and municipal governments trying to build affordable housing.
The program has been criticized for being too difficult to access and too slow to allocate, and Parliament’s Budget Office described it as spending only half of its budget in the first three years.
The budget promises to make the fund “more flexible and easier to access, including with more generous contributions and faster approvals”. It is also committed to spending all remaining funds by 2025-2026 to accelerate the creation of up to 4,300 new units.
“We can deploy these dollars, get them out faster,” Hussein said when asked about changes to the fund.
Morrison of the Canadian Housing and Renovation Association said Ottawa had failed to do so so far, but his group was cautiously optimistic.
The federal government’s 2022 budget was widely called the “housing budget.” (Catherine Holland / CBC)
“I think time will tell if the announced budget will live up to expectations in terms of greater accessibility, faster distribution of actual funds,” Morrison said.
Morrison said he thought there was a lot more to do.
Towards the end of 2021, the CMHC announced that it had provided loans for 22,300 new affordable homes under the Rental Construction Initiative and 12,700 new affordable units under the National Housing Co-Investment Fund. The sites are at different stages of planning or construction.
Tenants need more options
Meanwhile, tenants say there is an urgent need for more cheap options.
Cameron Towner, 22, recently decided to move from an older apartment he shares with three others to a better apartment in Halifax.
After months of searching, he was able to sign a sublease agreement. It will cost him less: he now pays $ 650 a month for a room in an apartment for four, and will soon pay $ 600 a month for a room in an apartment for three.
Cameron Towner is a tenant in Halifax. While looking for a new apartment, he and his roommates were bidding on one apartment, and a second apartment went to someone who needed a bigger apartment. (David Laughlin / CBC)
But during Towner’s search for a new place, he lost a potential apartment after someone else bid on it. Another apartment was given to someone in greater need. He faces a percentage of vacancies in Halifax.
“The rental prices for the quality of the homes I saw did not match what I was familiar with,” he said.
Towner recently graduated from university and has worked in a number of jobs, including concert work. He does not feel that he has a very secure job and is discouraged by the cost of rent, which eats up half of his income.
“It’s really hard to plan for the future,” he said. “But also where will I live when I don’t even know where my next salary comes from.”
Add Comment