Ontario Budget 2012 continues erosion of affordable housing investments

Ontario Budget 2012 continues the erosion of affordable housing investments at a time when the housing needs of households who are precariously housed remain deep and persistent.

The budget sets out yet another annual cut to the operating budget of the Ministry of Municipal Affairs and Housing, the fourth cut in the last four years. Spending in 2012 is set at $585.5 million, a 12% reduction from fiscal 2009. Operating funding helps to subsidize existing affordable housing across the province. The Ontario government is also passing along a 4% cut in federal housing funding – down to $476 million in the coming fiscal year. Operating funding reductions put additional pressure on already beleaguered affordable housing providers, including municipal housing companies, community-based non-profit housing and resident-managed housing co-operatives.

The signing of a federal-Ontario affordable housing deal in 2011 has temporarily increased provincial capital spending on affordable housing, money that primarily goes to new construction and repairs of existing homes, but the longer-term trend continues to be downward. Ontario budget 2012 allocates $155.2 million for one-time capital investments – a sharp drop of 74% from the $585 million delivered in fiscal 2009.

Both the Drummond report earlier this year and the Ontario auditor general’s report on provincial social housing spending in 2009 called on the provincial government to negotiate a long-term affordable housing deal with the federal government that includes adequate annual funding. Municipalities, including Toronto, are facing both a shortage of new affordable homes for low and moderate-income households, and also serious and growing repair bills for existing social housing downloaded from the province a decade ago.

There are a record 152,077 households on provincial affordable housing wait lists, according to the latest survey from the Ontario Non-Profit Housing Association. That’s up 7.4% over the previous year and up 17.7% since 2009. The latest report from the City of Toronto puts the wait list at 82,138 households – an all-time record. Ontario budget 2012 provides virtually no hope for those households anxious to find a good place to call home. An estimated 630,000 Ontario households are “in core housing need,” the official definition from Canada Mortgage and Housing Corporation of those who are precariously housed. That represents about one in every seven households across the province.

Affordable housing is one of the most important determinants of individual and population health, as noted in the Wellesley Institute’s Precarious Housing in Canada report. Poor housing is linked to higher rates of illness and premature death, and good housing is linked to much better health outcomes, not just for individual households but also for the entire population. Research commissioned by the Wellesley Institute and others confirms that people who are homeless suffer a much heavier burden of poor health and early death, yet there is no mention of homelessness in Ontario’s 2012 provincial budget.

Ontario’s long-term affordable housing strategy, adopted two years ago, puts municipalities at the forefront of housing and homelessness policies and programs, but fails to provide them with the financial or programmatic tools to create robust local plans. The Drummond Commission noted that the province has an obligation to ensure that municipalities have access to the funding and programs needed to properly address housing and homelessness issues.

In its 2012 budget, the Ontario government states that the province’s “housing market remains well-balanced.” The latest rental market survey from Canada Mortgage and Housing Corporation (CMHC) shows that Ontario’s private rental market – which is home to about one-third of the province’s population, including most low and moderate-income households, is slipping deeper into crisis. The province’s rental vacancy rate has dropped to 2.2% – well below the 3% that is the minimum level for a healthy rental market – and the vacancy rate is even lower for rental housing that is truly affordable to the lowest-income households. CMHC also notes that rents in Ontario are increasing rapidly – more than double the official rent review guidelines as set by the province – mainly due to provisions in provincial rent regulation legislation that allows landlords to bypass the official guideline amount when setting rents for vacant units.

The Wellesley Institute’s Sheila Block, in her overall assessment of the provincial budget, notes that the austerity agenda chosen by the province has the biggest negative impact on Ontario’s poorest and most vulnerable households.