The need for housing has significant social consequences. The way we build and pay for housing can create mixed or divided cities, may lead to good or poor health, and looms large in daily life. Housing choices and costs shape our neighbourhoods, our daily commute to work, and how much money we have left after paying the mortgage or the rent. Housing is social infrastructure and the choices we make impact social policy as well as the world of capital investment and hard assets.
As final decisions are getting made on the national housing strategy, the social side is looming large. Many of the voices heard in the national housing consultation emphasized not just housing supply but affordability.
Escalating housing prices make affordability a concern for Canadians across the income spectrum. But for people with lower incomes, it is a basic quality of life and health issue. In Toronto, a tenant household in the $20,000 to $30,000 income bracket paid a median market rent of $977 (2011 National Household Survey, unsubsidized tenants). This was just under 50 percent of gross income at the $25,000 mid-point, leaving just $1,100 monthly for everything else: food, clothing, transportation, and children’s needs. The rent squeeze is the main reason food bank use keeps rising. It is a main reason families with low incomes have few options other than poorly maintained rental buildings in a poor neighbourhoods. These buildings are more likely to have pests, poor air quality and poor repair, all of which are bad for health.
Affordability is a concern for the roughly 1 in every 4 low-income renters who live in social or subsidized housing, and the 3 in 4 who live in private-sector rental. For social housing tenants, the federal government took an important step in its 2016 budget. It committed to continuing some of the rent subsidy in social housing where long-term federal funding is ending under federal-provincial agreements signed in the 1990s when programs were downsized. The national housing strategy should confirm ongoing federal cost-sharing of rent subsidies in social housing. Without this, Canadian social housing and its affordable rents will crumble away.
What about people in private rental? Even a big affordable housing program would leave a large majority of lower-income tenants renting in the private sector. In the national housing strategy consultation, proposals were put forward for a Housing Benefit. This would be a monthly income transfer to low-income tenants, part of the social safety net – like the federal government’s new and enhanced Canada Child Benefit. Most affluent countries have a housing benefit.
Recently there have been signals from the federal government that it might consider a Housing Benefit for households most in need. This is a complex move because the provinces administer most rent geared to income, small provincial housing benefits, and social assistance. But it is a necessary move if a national housing strategy is to address housing affordability for most low-income tenants.
This is an issue of social equity – of fair treatment of people in different communities, and of housing as part of compound disadvantages that some people live with. The rental affordability squeeze is most severe for people in big cities, for newcomers to Canada, and for racialized communities. That $977 paid by a tenant in Toronto (above) compares to $745 for the same income bracket nationwide. That is over $200 more each month on rent, and not available for other needs. Most new immigrants settle in big cities where job opportunities are and rent for the first few years after they arrive. Low-income tenants in Canada’s big cities are disproportionately people in racialized minority groups, Indigenous people, or new immigrants.
Tax revenues come hugely from the economic vitality of the nation’s big cities, from their businesses and affluent households, and from growth fueled by immigration. It is time to soften the impact of the high rents that big cities impose on people with lower incomes, and on the population groups most affected.