Author: David Snow
The way in which policy-makers address affordable housing and homelessness has implications for all Canadians. With many federal housing programs set to expire in 2009, it is an appropriate time to carefully consider the future of housing policy. Moreover, numerous studies are showing that a lack of affordable housing is a major reason for increased homelessness. This report provides an overview of federal, provincial, territorial, and select municipal policies.
Although Canada’s housing market has performed very well since 2000, there have been growing problems with affordability, particularly for those at the lower end of the income spectrum. Several factors have combined to affect the supply of and demand for affordable housing. These include a rise in housing costs and the cost of living, government policy discouraging low-income rental development, a lack of new rental units being built, low rental vacancy rates, condominium conversions, and urban population growth.
Nearly one quarter of Canadian households are spending 30% or more of their gross income on housing. Over 13% are in “core housing need” and there is little doubt that affordability challenges have spurred considerable growth in Canada’s homeless population.
When it comes to the relationship between government and private sector stakeholders, there is a history in Canada of undermining the effectiveness of market mechanisms. In the 1970s, the federal government brought in a number of reforms that made the tax treatment of rental properties less favourable for investors. As well, in an effort to fight inflation, many provincial jurisdictions opted for the short-term benefit of rent controls (a policy which still exists in many jurisdictions to this day). Although beneficial to renters in the short-term, rent controls reduce the supply of rental units by discouraging construction and hastening the conversion of existing units into condominiums. Government policy thus had the effect of discouraging the private development of rental units. Regulatory and tax reform have been suggested as ways to correct this.
After examining affordable housing and homelessness policies at all levels of Canadian government, this report draws several conclusions. Although a number of policies (such as rent supplements, social housing, and rehabilitation programs) have been adopted by virtually all Canadian jurisdictions, housing and homelessness policy in Canada is by no means uniform. The federal government has adopted a decentralized policy of offering funding for housing, and letting provinces decide how best to spend the money. By negotiating social housing transfer agreements, offering money through affordable housing trusts, and allowing provinces control over the design and delivery of cost-shared housing initiatives, the federal government has given each province the opportunity to take a different approach to meet its own housing and homeless needs.
Although many see this as a “balkanization” of housing policy, this is not an inherently negative development. Financial resources, physical climate, provincial history, and the very existence of Canadian federalism all dictate considerable differences between (and even within) provinces. Differences in affordability, demographic trends, and housing markets require different policy responses. Therefore, provinces are better suited to respond to their own housing circumstances than the federal government. Policies for affordable housing should be built up from the local and provincial level, not down from the federal level.
Another area of concern highlighted by this report is the disconnect between affordable housing and homelessness policies in Canada. Despite numerous studies identifying a clear link between affordable housing and homelessness, most Canadian jurisdictions (with a few notable exceptions) treat these issues as distinct, often dealing with them through different ministerial departments.
Provinces need to recognize that homelessness is a provincial responsibility, and they should integrate their homelessness policy with their housing policy. British Columbia has already done this. Provinces would also do well to emulate best practices from elsewhere (notably some American cities), such as the “housing first” approach.
Policies aimed at affordable housing and homelessness are very important to the health and security of Canadians. The impending expiration of several federal housing and homelessness programs allows the opportunity for serious reflection. Yet while there is always a need for interprovincial coordination, cooperation, and learning, a “one-size-fits-all” approach should be avoided. As we move forward, we need to identify best practices and respond to unique provincial housing circumstances.