Corporations won’t solve affordable housing shortage

Stig Harvor –

Private enterprise is incapable of providing affordable housing for many people. There is no profit in it. No profit, no housing. Public enterprise is forced to step into the void. When will many of our politicians face this immutable fact?

The term “affordable housing” is vague and loosely bandied about these days, particularly by politicians who are aware of housing needs but are unwilling to act.

What, then, should affordable really mean? After all, a million-dollar home is quite affordable to a millionaire.

Our federal housing agency, Canada Mortgage and Housing Corporation (CMHC), and other experts say housing is affordable when it costs less than 30% of total individual or family income.

Consider what this means for low-income workers: The average annual rent for a 1-bedroom apartment today in Toronto is $12,400. To be affordable at 30% of income requires an annual income of $41 400. Yet working fulltime at Ontario’s new minimum hourly wage of $11, one person will earn only $22 800.

To make matters worse, one in four Ontario renters paid more than half their incomes in rent already four years ago. Some of them, particularly if they have children, must forego many of the necessities of a proper, well-balanced life in adequate apartments.

Some face the stark choice between paying the rent or enough food. Food banks and waiting lists for affordable housing are ominously growing.

Our rich country used to have effective affordable housing programs sponsored by both federal and provincial governments. They were called social housing. They were provided in various forms, all of them non-profit. They are self-governing co-operatives or projects by public and private sponsors.

There are no more such programs. During the last 20 years, first federal Liberal Prime Minister Paul Martin and then provincial Conservative Premier Mike Harris effectively stripped and scrapped these successful housing initiatives. By then, 555 co-ops with 125 000 residents had been built in Ontario alone. Our country today is shamefully the only Western nation without a national housing strategy.

Social housing aims to house people of mixed incomes. In co-ops, up to 40% of residents cannot afford the rents set at the lower-end-of-market (LEOM). Their rent is geared to 30% of their income (RGI). Governments contribute the rest.

The Harper government is relentlessly cutting expenditures in its close-minded, politically motivated search for a promised balanced budget in time for next year’s election.

It wants to discontinue the present annual federal RGI contribution. It claims projects can themselves finance the government’s RGI share when many of their 35-year mortgages expire shortly.

The claim is unrealistic. It is becoming a major headache for all social housing.

Like all older buildings, many social housing projects require increased maintenance and renovation costs. Effectively, if no RGI money is available, some 200,000 low-income residents in Canada will lose their housing.

In Toronto 14 co-ops will be affected within the next two years. Among them will be two co-ops in the successful, well-planned, mixed-income Downtown St. Lawrence Neighbourhood.

Will the federal government then provide them with tents in David Crombie Park like it does for refugee camps in the Middle East?

Our new busy Mayor John Tory loudly proclaims affordable housing is one of his priorities. Words are cheap, action is required.

He needs more than good personal relations pressuring our cash-strapped federal and provincial governments for essential funding.

Tory must increase our city’s own financial resources.

His pledge to keep taxes low will prevent him from acting effectively and producing results. Affordable housing will continue to mean affordable for people who have enough money to pay for it.