Special tax levy for social housing won’t fix problem
When politicians tell me something will only cost as much as a cup of coffee, I get a little wary, especially when they are asking for $40 million. That’s part of the pitch from Ottawa councillors Mathieu Fleury and Catherine McKenney, who want the city to boost its social housing spending by $10 million a year for four years.
Achieving that would cost the average homeowner the equivalent of a single cup of coffee a month, the councillors say, but they wouldn’t be collecting our loose change. Instead, there could be a one-per-cent property tax levy. What could the city achieve with the money?
The councillors are zeroing in on the plight of homeless families who can get stuck in motels for months on end, with the city picking up the $100-a-night tab. This is an issue that Fleury has highlighted previously and it’s true that almost anything would make more sense than what the city is doing now.
The challenge is drawing a direct line between the homeless family problem and the money the councillors want to spend. The councillors wrote an article in the Citizen on Monday saying the money would be “dedicated entirely to building desperately needed housing stock.”
That’s problem one. Government-owned “affordable” housing is not cheap to build. At a typical cost of $150,000 a unit, plus land, the city’s $10 million would build perhaps 60 units a year. It would be a tiny, incremental gain. Ottawa already has 22,500 units of social housing. At the high point of shelter demand, there were 350 families looking for a place to live. Once one of the new units is occupied, of course, it would no longer be available to families going through the slowly rotating door of the shelter system.
In separate interviews, the councillors suggested the money could be used for other housing approaches such as rent supplements, but it’s clear they want to build. Commendably, their instinct is to do something, and new apartment buildings are the most tangible thing the city can do.
But Fleury and McKenney don’t help their case when they refer to the families evicted from the Heron Gate development and claim that “the city is neither prepared nor equipped to protect people from housing loss.” The Heron Gate situation showed the opposite. City staff and the developer worked together to find similarly priced replacement accommodation for the people who had to move.
Social housing is already an onerous burden for a city government that can’t seem to fix our roads, plow the snow off them or deliver effective transit. In theory, the provincial government is mostly responsible for the cost of the emergency shelters the two councillors are focused on, but it capped its contribution in 2013. The city adds more money every year to make up the shortfall, which was $13 million in the last budget. Overall, city property taxpayers already pony up $107 million for social housing. It’s a big cost for a social program that really shouldn’t be paid for with property taxes.
The only way Ottawa can achieve the rental housing volume it requires is through private sector investment. The rental construction market is picking up, but the city could choose to stimulate it by dropping the $10,500-per-unit development charge for apartments inside the Greenbelt. It’s a tax that deters builders from doing something the city wants them to do.
City government also needs to get past the idea that new buildings should have a certain percentage of “affordable” units. This just means someone subsidizes them. New buildings allow renters to move up to better apartments, creating vacancies in lower-rent, older stock. That’s the cheapest way to create affordable housing.
McKenney says 2,000 families used to move out of social housing every year. With the tight rental market, it’s down to 1,200. Breaking the rental logjam is what’s required, but the proposed surtax won’t do it.
Randall Denley is an Ottawa political commentator and author.
Contact him at randalldenley1@gmail.com
Government-owned housing isn’t cheap to build.