Why Justin Trudeau’s Affordable Housing Strategy Isn’t Working

Images of homelessness and Toronto’s military-style intervention to rid Trinity Bellwoods Park of residents of vulnerable settlements amid a pandemic were enraged, especially for governments that say they are determined to make a strategy of affordable housing their top priority.

And those we see on the streets are only part of the equation, making up only about 20 percent of the total homeless population.

Raising the Roof, an organization that offers long-term solutions to homelessness, estimates that around “50,000 people are the ‘hidden’ homeless, people who stay temporarily with family or friends because they are homeless. have nowhere to go. These are the precarious.

Affordable housing is the lightning rod of an issue in this election as many Canadians have found that their money is not going as far as it used to. From housing to randomly discounted Amazon products on Prime Day, the cost of living increased almost overnight. For the first time in years, inflation has returned to political football for the first time in a generation, as it jumped to 3.7% in July this year.

It was in this context that Justin Trudeau said: “You will forgive me if I do not think about monetary policy. You will understand that I am thinking of families.

You’ll forgive me if I don’t like such a flippant remark – inflation is Monetary Policy.

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The Canada Mortgage and Housing Corporation (CMHC) is the primary vehicle through which the government administers its affordable housing initiatives. So let’s see what “affordable” means when it comes to housing.

If you spend less than 30% of your gross income on housing, it’s affordable, which means a lot of us are drowning.

The pandemic exacerbated the shortage of affordable housing, but it was a thirty-year emergency. And as usual, we, as a society, have tinkered around while funding social services that could have intervened to help people on the verge of housing insecurity.

Now we have a crisis.

In January 2020, National Capital Councilor Catherine McKenney introduced a motion, making Ottawa the first city to declare a housing emergency. It was adopted unanimously.

Like most Canadian cities, Ottawa has seen rental rates skyrocket in recent years. The Canadian Center for Policy Alternatives’ analysis of the rental market in Canada notes: “Over the past two years, average rental prices in the city have risen 13.5% while vacancy rates hover around from a relatively low level of 1.8%.

According to CMHC’s Rental Market Report 2020, the average market rent in Ottawa is $ 1,358; in Calgary it is $ 1,195 and in Toronto it is $ 1,523. Note that the Canadian Emergency Response Benefit (CEP) only paid $ 2,000 per month.

Budget 2017 introduced the National Housing Strategy, a now $ 70 billion 10-year program that promises to build 125,000 new homes within that time frame.

The program is based on several components, but the most relevant for increasing the housing stock (housing supply) are the National Housing Co-Investment Fund and the Rental Construction Finance Initiative. The first “provides capital contributions and low-cost loans focused on two key priority areas of the National Housing Strategy: the creation of new affordable housing and the repair and renewal of existing affordable and community housing.”

About $ 220 million has been distributed in Ottawa, but Councilor McKenney says the program is in trouble. Housing should favor mixed income, with 30% of housing to be offered at 80% of median market rent.

But McKenney says the program isn’t about affordability, it’s difficult to access, and there’s a lengthy approval process. CBC reported that the application process “includes over 200 questions, and once an application is received and placed in a queue, it can take up to 289 days for a funding agreement to be issued.” finalized ”.

As of September 2020, the co-investment fund had approved only two projects in British Columbia. The data show that until now, “Alberta, Newfoundland and Labrador, Nova Scotia, Quebec, Saskatchewan, the Northwest Territories and the Yukon had no finalized funding for any. of their requests ”.

The other component is rental construction finance, a low-cost loan program designed to encourage rental construction by private developers.

Look at these generous terms: 50-year amortization rate at low interest rate, fixed over a long period and payments are due after 12 months of “stabilized effective gross income”, that is, if the developer does not show a steady income for years, they will never have to pay a dime for principle or interest. The criteria only require 10 percent or more of the total number of units at 30 percent of the median household income. The median household income in Ottawa is $ 115,750, according to Statistics Canada.

Who do the Liberals think can afford nearly $ 3,000 a month in rent? This is what happens when you assume that everyone is from the middle class.

The National Housing Strategy is a bitter failure. Councilor McKenney notes that the City of Ottawa has received $ 370 million since the strategy, but 62% of national housing funds have gone to developers.

University of Toronto professor David Hulchanski called the strategy a “public relations gimmick” in The Globe and Mail, and “the amount of money spent now is not more than what the Conservative government was spending. previous one, little uptick in 2016. ”(There was a supplement to financing for rental construction in the fall 2020 economic update of $ 12 million).

The Parliamentary Budget Officer noted, “It is not clear that the National Housing Strategy will reduce the prevalence of housing need from 2017 levels. Overall, Canada’s National Housing Strategy maintains largely current funding levels for ongoing activities.

If you trust Herongate, you cannot trust the Liberals to provide affordable housing.

In 2018, Ottawa developer Timbercreek Communities (and parent company Timbercreek Asset Management) renewed 100 Herongate families, or “low-rent townhouse demolition-evictions in order” to provide a resort lifestyle. ” , as described by The Leveller.

Vice reveals that the neighborhood has the highest density in the city and is home to “1,360 residents who categorize themselves as black and 670 as Arab. The Heron Gate Tenant Coalition’s own survey of residents who will be affected by the upcoming demolition found that 89% are people of color – 44% Somali and 24% Arab.

This is how systemic racism occurs in housing.

Herongate is the largest urban eviction campaign in Canada and it is continuing. While the Liberals claim their commitment to affordable housing is beyond reproach, the riding in which Herongate resides, Ottawa South, has been owned by David McGuinty – brother of former Ontario premier Dalton McGuinty – since 2004.

What have the Liberals done to ensure that this community keeps it housed?

Nothing. And that’s why we can’t have beautiful things.

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