$2.1M in funding for 1,100 subsidized housing units goes unused in 2018
City will instead look at using cash for rent supplements tied to tenants, rather than properties
The money for nearly one in every eight subsidized housing units required by law for Hamilton went unused last year, despite a growing affordable housing wait list of 5,500 people.
The conundrum has spurred the city to look at reallocating that unused housing subsidy cash — $2.1 million this year — to pay instead for “portable” rent supplements linked to specific tenants, rather than specific units.
Provincial housing legislation requires Hamilton to distribute subsidy cash for 8,403 rentgeared-to-income (RGI) units in the city.
This is done via agreements with 27 housing providers, the largest being CityHousing Hamilton.
But a new report says those housing providers are “falling short of meeting RGI targets” by 1,100 units. That means nearly one in eight of those planned subsidized units were not available last year — or at least not as rent-geared-to-income housing.
Sometimes, the would-be subsidized units are unavailable because of tenant turnover, required damage repair or renovations, said new city housing director Edward John.
In many cases, subsidy money is returned to the city because tenants in a formerly rent-geared-to-income unit have improved their circumstances and “graduated” to paying market rent.
But in many cases, subsidy money is returned to the city because tenants in a previously subsidized apartment have improved their financial circumstances and “graduated” to paying closer to market rent.
That tenant success is “a very good news story,” stressed John — but because those tenants are not obligated to leave their units, housing providers are then left with fewer units available for rent-geared-to-income use.
The new housing director said some vacant subsidized units are inevitable, but added the number is “artificially high” now in part because the largest housing provider, CityHousing Hamilton, has embarked on several ambitious redevelopment projects.
That includes the complete closure and gutting of an aging 146-unit highrise in the North End, the emptying of 90-plus townhouses in Jamesville ahead of redevelopment, and the ongoing sale of dilapidated singlefamily homes across the Mountain and east Hamilton.
Regardless, the reports notes the “targets” for units provided by housing providers are being reviewed given the challenges of the last few years. The annual amount of unused subsidy cash has tripled since 2015, from $784,000 that year to $2.1 million in 2018.
That trend prompted city councillor Chad Collins to ask staff last year to report back on alternative uses for the surplus cash.
Collins said Tuesday he supports the idea of portable rent supplements as a “creative” way to help residents get off an affordable housing wait list that has ballooned to more than 5,500 people. “If we have all this money coming back to us, I think we need to be using it to cut down that list in a meaningful way,” he said.
The city already offers some rent supplements to about 315 people through its 10-year housing and homelessness action plan. The latest report suggests spending another $2 million to guarantee rent supplements to an extra 120 people for five years.
The plan gives the city “more flexibility” to make the best use of subsidy dollars that would otherwise be tied to a particular
building or housing provider, said John.
Portable rent supplements are sometimes praised as a means to promote mixed-income communities, as well as a solution for vulnerable, low-income tenants who need to quickly leave an existing subsidized apartment, like a spouse and children fleeing an abusive relationship, for example.
“It’s about tailoring (the subsidy) to the people, not the property,” John said.