Design of new housing supplement critical to its success, CMHC head says
OTTAWA — Federal officials are working out the kinks on a plan that would see housing assistance tied to the person who needs help, not the place where they are living.
Benefits have traditionally been tied to a housing unit through rentgeared-to-income plans or rent supplements, meaning they can’t accompany a person who moves, such as women fleeing domestic violence.
Evan Siddall, president and CEO of the Canada Mortgage and Housing Corp., said his officials are working with provinces and territories on how to deliver the supplement without driving prices higher in markets where affordable housing is in short supply.
Siddall’s comments suggest the supplement will be part of the national housing strategy set to be released this fall, something government officials have privately indicated for weeks. But there are complications with the supplement that must be ironed out before it can be rolled out, much like the strategy itself.
The housing strategy is facing demands and unique needs from housing advocates and providers, as well as local, provincial and territorial governments. There are also demands to ensure accessibility and greenhouse gas emission reductions are part of the plan.
The Liberal government’s second budget dedicated $11.2 billion over the next decade on the housing strategy, billed as a plan to ensure everyone in the country can find housing that is affordable and meets their needs.
The money is supposed to build 80,000 new affordable housing units, lift or prevent 500,000 Canadians from becoming homeless, and halve the number of hardestto-help homeless who find themselves repeatedly on the street.
CMHC will receive $5 billion of that money to stimulate private sector investments and hopefully create an extra $10.9 billion in funding over 11 years for new affordable housing investments.
The first test of that idea took place this year when the CMHC offered the first $600 million or so from a $2.7 billion, five-year commitment in the 2016 budget towards rental housing, including low-cost loans at the earliest and riskiest phases of development.
Siddall said the program was over subscribed by factor of five.
“There’s demand. Now, as (interest) rates go up, the economics change just a bit so we’ll see how that all plays out,” he said in a wideranging interview with The Canadian Press.
From Siddall’s perch, increasing the supply of affordable housing can help alleviate poverty and promote “inclusiveness” by seeing housing as a vehicle to support other objectives like improved health outcomes.
Siddall said the housing strategy will place a heavy focus on increasing supply — construction of new units and renovations to existing stock.
In too many cities there simply isn’t enough affordable housing to meet the needs of millions of Canadians. That means demand in “supply-constrained” places like Toronto and Vancouver pushes up ownership and rental costs, further straining low-income households.
That situation makes it critical that the portable housing benefit ensure the demand-based support doesn’t “leak into the marketplace and push prices higher, which is our worry,” Siddall said.
“If we’re just stoking demand and we’re just supporting demand in an uncontrolled way, that money just basically leaks into higher rents and that doesn’t help anybody.
“It’s just simple supply and demand. If I’ve got more money to spend on a house, then the supplier will take more money from me. But if we say that money can only be spent on this particular area ... or with a rent of no higher than ‘X,’ then it can work.”
Wilfrid Laurier University researchers reported this year on that region’s experiment with 40 portable supplements to people experiencing persistent homelessness.
The results suggested the benefits improved the ability of participants to stay housed, find what they perceived as higher quality housing, and improved their quality of life.
CMHC officials say markets with greater supply can absorb the increase demand from a portable supplement without driving prices higher. The same might not be the case in other markets, which is why Siddall said designing a portable supplement is tricky.