An affordable housing trust fund to deliver steady funding for desperately needed new affordable and healthy homes – that’s the Big Idea from the Housing and Innovation practice here at the Wellesley Institute that was published on Feb 3 as part of the Toronto Star’s Big Ideas initiative. Here’s the idea:
What if Toronto had a dedicated affordable housing fund to ensure that everyone has a good quality, affordable home?
In 2009, Toronto Council adopted Housing Opportunities Toronto, an Affordable Housing Action Plan along with a Housing Charter that promised: “All residents should have a safe, secure, affordable and well-maintained home from which to realize their full potential.”
The same year Toronto adopted its housing plan, city council approved a budget of $925 million for housing and homelessness programs. In 2014, spending for those programs is set at $639 million. Most of the reduction of $286 million (down 31% from 2009) is due to cuts by the federal and provincial governments.
To get the new affordable homes we require, Toronto needs a dedicated housing fund. Many U.S. and some Canadian cities have housing funds capitalized over time from a variety of sources, including conventional borrowing, government grants, dedicated tax revenues and innovative financing, including bonds.
A Toronto affordable housing fund – administered by an arms-length agency – would offer a blend of grants and loans and support housing initiatives from new construction to capital repairs and energy upgrades. In addition, it could build and administer a community land trust (a bank of land with long-term leases for affordable housing).
The fund would advance the financing required to qualified developers, and the housing management would remain with co-op, non-profit, municipal or private landlords. Currently, affordable housing developers hunt for funding from a variety of sources (government programs, private financing, donations). The number of new homes funded varies widely from year to year.
As the Toronto housing fund grows, it would provide greater certainty in financing and would allow housing developers to make long term housing plans. Jobs and other economic benefits would be generated. Housing investments pay off in social and economic benefits with high economic multipliers compared to other investments.