Since 1978 Ottawa, through the Canada Mortgage and Housing Corp., has subsidized municipalities, co-operatives and service groups that build low-cost, nonprofit accommodation for low-income families. When it began, the program was widely hailed as a significant social advance. But a recent CMHC report declared that the system is not working, especially the co-op sector which, it charged, was subsidizing housing for the rich.
The study showed that more than 500,000 Canadian families who rent
accommodation—that is, 18 per cent of all tenants—pay more than 30 per cent of their income on rent. The report charges that the current program provides housing that serves only one per cent of renters who need financial help, even though Ottawa had poured $255.9 million into the program by the end of 1982 and expects to be paying out more than $1.3 billion annually within 10 years. Commented Joyce Potter, a CMHC spokesman who helped write the report: “We are providing a very high level of benefit to some people fortunate enough to get into the program, whereas all of the others on the waiting list get no assistance at all.”
Few critics suggest, however, that the government should get out of the business of housing the poor. The recession emphasized the inability of the private sector to provide low-cost accommodation-developers built little new housing of any kind except for luxury dwellings during 1982 and 1983. But the
report stated that the CMHC’s current regulations actually may be denying housing to low-income families. In order to obtain government funding for nonprofit housing, cities and other groups must guarantee that rent-subsidized families occupy only 25 per cent of the units in the development. The balance of the tenants must pay rental costs comparable to inexpensive rents in private apartments in the surrounding area. But the policy means that steadily rising rents in commercial properties in many Canadian cities are
forcing many subsidized tenants out of nonprofit developments. Ironically, coops, which are generally started by more affluent groups, often charge lower rents than nonprofit organizations because the government only requires co-ops to charge high marketvalue rents for their first year. After that the co-op only needs to set rents high enough to cover operating costs.
Jane Nellis, 46, lives with three of her four children in a Toronto nonprofit housing development. She receives unemployment insurance and support payments from her estranged husband. But commercial rents in her neighborhood have soared. As a result, her rent recently rose to $649 from $595 a month, and she says that the increases will eventually force her to seek a less expensive place to live.
In contrast, the enviable position of some people who live in co-operatives is causing a furore in Vancouver, where a Vancouver Sun columnist recently
called local co-ops “government-subsidized sinecures for middleand uppermiddle-class trendies.” The problem is that co-ops often do not monitor the income changes of their members. Ann McAfee of Vancouver’s planning department admitted that the co-ops are not serving lowand moderate-income earners effectively, and she pointed to a recent city study that showed about 25 per cent of those living in co-ops built with federal subsidies could afford to rent in the private market.
Critics have also attacked Ottawa’s attempts to stimulate more private sector housing for the poor. Under the Canada Rental Supply Plan, introduced in 1981, Ottawa offered loans to private developers to build apartments, stipulating that the builders offer one-third of the units to the province for subsidized social housing. So far, only about 600 units of a targeted 10,000 units have been built, largely because the provinces find them too costly to subsidize.
Although housing officials across the country are critical of Ottawa’s efforts, they do not want the federal government to abandon subsidized housing. Said Calgary’s James Anderson, president of the Canadian Association of Housing and Renewal officials: “Everyone would be a loser if that happens.” Federal Housing Minister Roméo LeBlanc has promised to meet with provincial and municipal housing officials and make recommendations for new policies to the cabinet. Without detailing specific changes, he has stated that he wants to retain the nonprofit program in some modified form and that he may add a program that provides shelter allowances or individual rent subsidies based on financial need.
The concept is controversial. Toronto economist Frank Clayton said that shelter allowances permit tenants to take their subsidies with them from dwelling to dwelling. He added that the scheme could also provide an incentive for private developers to build because allowances would tend to encourage rents to rise closer to market rates. But Vancouver Mayor Michael Harcourt called shelter allowances “a bottomless pit in a province where there are no rent controls.” Vancouver’s McAfee agreed that it would be expensive and estimated that if the CMHC diverted all the money it now spends on the nonprofit building program into a system of individual shelter allowances, the money would only be enough to provide each current recipient with a shelter payment of about $12 a month.
Still, as the debate over how to redirect Ottawa’s funding drags on and the rate of housing construction stagnates, the waiting list for affordable housing for Canada’s poor continues to lengthen. -ROBERT BLOCK in Toronto.
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