The National Housing Strategy is the most keenly awaited housing news in years. It sets out goals and puts details on the broad strokes that were in the March 2017 federal budget, while adding a couple of new pieces. This blog summarizes what’s in the Strategy. Our next two blogs will assess the strengths and soft spots in the Strategy, and consider the implications for Ontario and the Toronto area.
There is a lot that is positive in the Strategy. It enhances federal capacity, increases funding levels modestly, creates a new Canada Housing Benefit, sustains existing social housing and the non-profit sector, re-establishes a federal strategic lead, and levers ongoing provincial and other cost-sharing.
Strategies make a difference in real lives via programs that involve public dollars. Let’s look at the Strategy in these terms. There are four main programs, two to come, plus a range of smaller initiatives.
The Canada Community Housing Initiative will sustain the funding that goes to the provinces almost 500,000 units of existing social housing, to help keep rents affordable and pay for repairs. This will gradually replace the federal “baseline funding” that is phasing out with the end of project agreements. Provincial cost-matching will be required. There is a parallel program for federally administered co-ops.
A National Housing Co-Investment Fund will provide capital grants and loans, both for new supply and for repair/retrofit of social housing. and is expected to involve federal capital funding averaging $0.5 billion annually, and about double that amount in loans. This will create 6,000 new units annually also support repair or retrofit of many affordable units. In new affordable housing, the lead in funding and administering programs shifts emphatically to the federal government.
There will also be a successor program to IAH (Investment in Affordable Housing). This was the cost-shared program for new supply and new rent subsidies delivered by provinces, and Ontario municipalities, for the past 15 years. While details remain to be finalized, the new version will be much smaller than before, unless provinces put in a lot more than just matching funds.
The big news is the intention to initiate a Canada Housing Benefit. This is a monthly amount paid to low-income households that rent. It is not tied to a specific project like a rent-geared-to-income (RGI) subsidy, but can be received wherever the household lives. The federal government will provide $200 monthly per household, topped up by the provinces, starting in 2020 and eventually helping 300,000 households. This was not in the government’s election platform or the federal budget, but it responds to smart policy development and advocacy by the National Housing Collaborative and others.
Two other main programs are still under development. We expect to hear about the revamped federal homelessness program in early 2018, and an Indigenous housing strategy is being worked out with First Nations and other Indigenous organizations.
The Strategy provides an unclear picture of federal spending but in an average year, it will be about $3 billion annually with about $1 billion in lending on top of this. The $3 billion is about the same level as this year. In the first two years of the strategy – the remaining two years of the government’s mandate – expenditure will be slightly lower, at $2½ billion annually plus loans. Expenditure during the previous government (2006-2011) had a floor of about $2 billion and peaked at about $3 billion annually in the 2009-2011 stimulus. These numbers all include baseline assistance to existing social housing plus spending on new initiatives. We look forward to clearer funding picture in the coming weeks.
The Strategy includes a headline number of $40 billion over ten years. This tells us little: over ten years an average Canadian household spends $145,000 on rent, mortgage payments, and related costs. But having a multi-year commitment is important, even if future budgets may alter things. Having a plan creates some certainty for provinces, municipalities, non-profit groups, and private-sector partners.
Federal dollars also lever other resources: most programs involve provincial cost-matching, and municipalities contribute too. Public funds are what make new non-profit projects are economically viable, and this enables sponsor group get mortgage financing, negotiate partnerships with developers, and create spinoff benefits in construction and jobs.