We’re botching our policy on affordable housing

If you had a friend or relative who needed an extra $300 a month to pay the rent, what would you do: help him with payments now or wait three years, then buy a house and rent it to him for $300 less than the market rate, while paying all the repair costs yourself ?

If you took the second choice, congratulations, you’re right in sync with the Canadian approach to “affordable” housing. When it comes to solving the straightforward problem of helping low-income people who struggle to pay rent, our federal, provincial and city governments have combined to create a complex maze of programs that fails to get the job done, but at great cost.

The federal government has been praised for last week’s budget announcement of $11.2 billion over 11 years for affordable housing and homelessness programs. Fortunately, the money will be doled out slowly, with only $20 million this year and $3 billion over five years. That creates an opportunity for some new thinking in the national housing strategy expected this spring.

If one takes Ottawa as an example, it’s easy to see the futility of the way we do things now. The fundamental problem is that about 11 per cent of Ottawa households are considered to be in poverty, consequently straining to pay market rents. This is not a problem of housing being so expensive it is generally unaffordable. It is a case of some people lacking the money to pay normal rents.

The city’s primary solution has been to build new social housing, either directly or through a variety of community agencies. Ottawa has about 26,000 units of subsidized housing. The problem is we need about 14,000 more. To put that in perspective, the new federal subsidized

For years, landlords have been campaigning for direct subsidies to low-income renters.

housing money would produce about 3,650 units a year across the entire country.

The subsidized-housing queue has had about 10,000 households in it for many years. The city has been unable to build enough new units to put a dent in the demand. Other people would qualify for help but haven’t bothered to join the line, where the wait time is three or four years.

At a construction tab of $150,000 to $200,000 a unit, the cost of shrinking that lineup is prohibitive. So is maintaining the housing supply the city owns now through the Ottawa Housing Corporation. The accumulated repair backlog is $140 million. While the city spends about $19 million each year on repairs, it would require another $22 million annually to catch up and keep its buildings in good shape.

While one might think the cost of a social program would fall to the federal or provincial government, it is Ottawans who pay the biggest share through their property taxes. The city’s total spending on housing and homelessness programs is $168 million this year. Of that, $103.5 million comes from property taxes.

There is a better way to accomplish the goal of making rents affordable, and even a glimmer of hope that governments might finally endorse it.

For years, private landlords have been campaigning for direct subsidies to low-income renters who are already in their units.

Portable housing benefits, as they are called, are cheap to administer, don’t require new capital spending or publicly paid building upkeep and they are fairer. The system now gives a great benefit to those who get social housing, little or nothing to people who are waiting. The approach also lets people choose where to live rather than clustering them in housing projects.

Some of the money the federal government will eventually dole out could be used for portable housing benefits.

The provincial government has shown interest in the idea and is running a three-year pilot project. Even the City of Ottawa has dipped a toe in the waters with a $1.7-million-a-year program.

The federal housing plan needs to admit that what we do now is unaffordable. A direct subsidy wouldn’t generate photo ops, but it would help far more people.