Canadian housing policy has undergone quite an evolution over the past one hundred years. In the first quarter of the 20th century, it was a mish-mash of loosely instituted and often informal programs. From the mid 1930s through late 1940s the federal government began to become more formally involved in housing through the Dominion Housing Act and later the National Housing Act. In 1949 Canada became one of the last countries in the western world to institute a social housing program, but the one they instituted was formidable.
Canada, with a population of approximately 30 million, contains approximately 205,000 units of public housing and an additional 400,000 units of third sector housing. Public housing refers to those units that are federally owned, targeted for the very poor and managed by public housing authorities. The largest proportion of public housing construction in Canada occurred between 1970 and 1974. Third sector housing is housing owned and operated by co-operatives and nonprofits. This movement began in Canada in 1973. Third sector housing is most often operated outside the control of the state or private sector, though funds from both have been instrumental in the construction and operation of the third sector units. Collectively, public housing and third sector housing that is funded entirely or primarily by the government are referred to as social housing.
From the early 1970s through the late 1980s, many countries looked to Canada as a model of a strong social housing program and a positive example of government intervention in housing. Several countries aspired to bring their government funded housing programs up to Canada’s level of spending and government involvement. The St. Lawrence neighborhood in Toronto – a thriving mixed income neighborhood that combines people of different socioeconomic backgrounds not only in the same neighborhood, but often in the same building – has been visited by people involved in housing and social policy from around the world and is heralded as a shining testimony to how government involvement in housing can work. In St. Lawrence, all three levels of government worked in co-ordination, financing environmental studies and remediation, buying out private owners to accumulate land, and developing a co-operative model and open space plans.
Canada’s housing policy began to change in the mid 1980s with the election of Brian Mulroney. A Conservative, Mulroney followed the approach toward social policy of Thatcher in the UK and Reagan in the USA by continually reducing budgets and focusing on a greater reliance on the private market to supply formerly public goods and services.
The frenzy of fiscal conservatism was already firmly established by the time the current governing party in Canada, the Liberals, came into office in 1993. A “pass the buck” mentality has pervaded housing policy in Canada ever since. The federal government will not fund any new social housing and has devolved responsibility for the existing stock down to the provincial level of government. In provinces such as Ontario where the party in office is also fiscally conservative, responsibility for social housing is further devolved down to the municipal level.
Throughout the 1990s right wing think tanks in Canada such as the C.D. Howe Institute and Fraser Institute have become much more influential in policy direction, especially at the provincial and federal levels of government. Across Canada the right began to question both the amount of housing subsidies to which people should be entitled and the need for them at all. They have similarly advocated a hands-off approach to government involvement in housing, believing that the private sector can and will meet the needs of all low-income people in Canada. Though Canada still has a strong co-operative sector and many progressive provinces, there is no doubt that many right wing thinkers and politicians across Canada would like Canada’s housing policy direction to become even more aligned with the United States or Britain.
The impact of this way of thinking has been severe. From 1989 to 1993 there were an average of 12,675 social housing units created per year, accounting for approximately seven percent of all housing completions in Canada. From 1994 to 1998, after fiscally conservative policies became more blatantly integrated into federal and provincial policies, it dropped to 4,450 social housing completions (less than 3.5 percent of all housing completions), a decline of 65 percent.
There has also been a strong movement from rental and co-operative construction to homeownership and condominiums. From 1989 to 1993 rental housing accounted for 20 percent of all housing completions and co-ops accounted for over two percent of all housing completions. From 1994 to 1998 rental housing declined 67 percent, accounting for only 9.2 percent of all completions, and co-op completions declined 78 percent, accounting for less than one percent of all completions.
Several poverty indicators in Canada illustrate that a lack of social housing construction is having a definite impact. Low-income households are having to spend a greater proportion of their gross income to have their housing needs met in the private market. In many large Canadian urban centers that have low vacancy rates, like Toronto, Ottawa, Calgary, Vancouver and Regina, low-income tenants are feeling the consequences as rent increases outpace inflation increases. Food bank usage is on the rise across Canada. Even with a booming economy there are more and more Canadians losing their housing and having to make use of emergency shelters.
The provincial response to the federal government’s removal of all funding for new social housing and the growing needs of low-income households varies from province to province. In the province of British Columbia in Western Canada, the New Democratic Party government, which is much more aligned to social democratic ideology than the other three major political parties in Canada, has continued to try to create social housing without federal government support. On the other hand, in Ontario, where there is a Conservative government, not only is there no new social housing being created, but social assistance has also been slashed by 21.6 percent.
Municipalities are in an awkward yet important situation in Canada. As the most immediate level of government to the people, they are under pressure to find ways of supporting social housing regardless of the political affiliation of the provincial government or policy shifts in the federal government. Nonprofit and co-operative groups within the communities are having to find new ways of building affordable housing – which may not necessarily be social housing – that low- and moderate-income households can afford to rent or own.
There has been mixed reaction from municipalities across Canada on how to deal with affordable housing. Some have chosen to avoid dealing with the issue. Others have decided to take on an advocacy role, pressuring the federal government and their respective provincial governments to become involved in a larger scale in affordable and social housing production, but they have yet to experience any large-scale success. Others still have chosen to focus their energy on establishing methods of ensuring affordable housing provision without upper tier government support.
Those who have chosen the latter focus have had to be rather creative in their approach. Municipal governments in Canada have direct access only to the property tax base. Their creativity, therefore, has centered on finding ways to produce affordable housing for low- and moderate-income households without explicitly spending vast amounts of municipal revenues.
The nonprofit sector has also been undergoing many changes in response to the changes in federal housing policy. Some new organizations are forming, and others are entering the housing field for the first time. Others are having to reinvent their housing strategies, many stepping forward with creative solutions of their own.
Everyone Chips In
In Prince Albert, a community of approximately 40,000 in the center of Saskatchewan, houses are small and sturdy, but most pre-date current building codes and several lack modern plumbing, electricity and heating. As a result, purchase prices are low – as little as $20,000.* Even with such low prices, however, low-income households still lacked the money necessary for a down payment and/or bringing the house up to code.
A realtor in the community recognized that social assistance recipients were making rent payments equal or even higher than the average mortgage payment in the community. The realtor pulled together community and provincial partners including The City of Prince Albert, Department of Social Services, Economic and Co-operative Development and the Prince Albert Credit Union to form a co-op called New Beginnings.
The New Beginnings Housing Co-op is a group of low-income households who are purchasing and renovating homes. The homes are purchased by the co-operative with down payment assistance of $1,875 per home from the city. Further down payment assistance is provided by the Credit Union and the Municipal Government Department of the Province. Houses are brought up to code and modernized using sweat equity of co-op members. The co-operative holds the mortgage until it is repaid over five years, at which point the occupants can take over the mortgage on their own if they so choose. However, the homeowner may choose to stay in the co-operative.
The program has helped restore approximately 20 homes so far. Sandra Burns, a member of the New Beginnings Housing Co-op and who lives in the co-op’s second house, explains that the co-op has been successful because various community groups and co-ops got together and recognized they were better working together rather than trying to meet the needs of low-income households all alone. Innovative Concepts Co-op (a workers co-op) and Women Against Poverty have now banded together with New Beginnings Housing Co-op to help secure more funding of the River Bank Development Corporation, which supports the continuation of homeownership and the maintenance of New Beginnings Co-op.
Activist City Government
Vancouver, British Columbia is a rapidly growing city on Canada’s west coast with a regional population of 1,832,000. Even after the federal government withdrew funding for new social housing in the early 1990s, Vancouver has used a variety of planning policies and programs to support the development of social housing. Vancouver has imposed Development Cost Levies for replacement housing in areas where affordable housing will be lost through redevelopment; required 20 percent of the units created in newly rezoned neighborhoods be social housing, especially for families with children; provided long-term land leases at reduced prices to nonprofit and co-operative housing societies on city-owned land; provided capital grants when necessary to help construct new housing or renovate existing older stock such as rundown SROs, and used density bonusing.
Density bonusing has been one of Vancouver’s staple strategies in producing affordable housing of all kinds. While each density bonus is negotiated on a case-by-case basis, the general approach is to capture some or all of the increased land value generated by the increased density of a new development. That value is then used for public benefit (such as affordable or social housing).
For example, a developer applied to rezone a large formerly industrial site to high-density live/work development called City Edge. Out of this application the city negotiated 22 units for free, and then purchased an additional eight units for $780,000. These 30 units were then developed as a nonprofit co-operative for low- and moderate-income artists. Fifteen of the units rent for $325/month and 15 rent for $530/month. The average rent for a one-bedroom apartment in Vancouver is about $700/month.
Cumberland House is a remote community in northeastern Saskatchewan. The Cumberland House Home Owners Association is a nonprofit society dedicated to supporting the goal of responsible homeownership through co-operative effort. Working with the World Vision Aboriginal Council, the co-operative provides a training program in self-build techniques such as balewall construction and fosters the development of organizational and administrative skills. Balewall construction was chosen because it is easily taught and practical. The high insulation value provided by balewall reduces heating costs.
Members of the co-operative provide sweat equity in the construction process. Several building suppliers and professionals donated materials and expertise for the first homes. The Village of Cumberland House donated the land. The homes generate rental or mortgage payments that fund a revolving loan fund. In the sale option, the co-operative is using the Habitat for Humanity mortgage model (repayment of principal only plus sweat equity).
A Wealth of Creativity
There are many other creative approaches to building affordable housing in Canada. For example, Le Fonds Alternatif de Developpement Regional de l’Habitation de Quebec (FADRHAQ) in Quebec City revitalizes inner city neighborhoods using alternative funding mechanisms to help low- and moderate-income people become collective homeowners and members of a nonprofit housing co-operative. FADRHAQ funds supply tenants who want to own their building with second and third mortgages to cover the gap between what a conventional lender will provide and the capital costs. FADRHAQ also provides a mortgage guarantee for the full property value at no fee, and interim financing.
In Toronto, a nonprofit organization called Dixon Neighbourhood Homes Inc. (an extension of Dixon Hall, which operates a homeless shelter) developed ten townhouses on land donated by the city. Forty formerly homeless people are housed in the townhouses. The amount each pays per month is approximately equivalent to the shelter component of social assistance, yet is enough to cover the mortgage and operating costs. The Cape Breton Labourers’ Development Company is a nonprofit organization in Nova Scotia where members of Labourers’ Union Local 1115 contribute 25 cents per hour from their wages, interest free, to a benevolent fund that is used to build affordable homes for union members, who due to “economic uncertainty” often do not qualify for conventional mortgages.
Nonprofits and co-operatives are redefining their role in affordable housing provision in Canada. Reliance on federally and provincially funded housing programs is becoming a thing of the past. As nonprofits and co-operatives look toward the future, however, many are finding creative and replicable ways of developing housing that is affordable to low-income households.