Design of new housing supplement critical to its success, CMHC head says

OTTAWA – Federal officials are working out the kinks in a government plan to tie housing assistance to the person who needs help, not the place where they are living.

Benefits have traditionally been tied to a housing unit through rent-geared-to-income plans or rent supplements, meaning they can’t accompany a person who moves, such as women fleeing domestic violence.

Officials with the Canada Mortgage and Housing Corp. are working with provinces and territories on how to deliver the supplement without driving prices higher in markets where affordable housing is in short supply, said Evan Siddall, the corporation’s president and CEO.

Siddall’s comments suggest the supplement will be part of the national housing strategy set to be released this fall, something government officials have privately indicated for weeks. But there are complications with the supplement that must be ironed out before it can be rolled out, much like the strategy itself.

The housing strategy is facing demands and unique needs from housing advocates and providers, as well as local, provincial and territorial governments. There are also demands to ensure accessibility and greenhouse gas emission reductions are part of the plan.

The Liberal government’s second budget dedicated $11.2 billion over the next decade on the housing strategy, billed as a plan to ensure everyone in the country can find housing that is affordable and meets their needs.

The money is supposed to build 80,000 new affordable housing units, lift or prevent 500,000 Canadians from becoming homeless, and halve the number of hardest-to-help homeless who find themselves repeatedly on the street.

The corporation will receive $5 billion of that money to stimulate private-sector investments and hopefully create an extra $10.9 billion in funding over 11 years for new affordable housing investments.

The first test of that idea took place this year when the CMHC offered the first $600 million or so from a $2.7 billion, five-year commitment in the 2016 budget towards rental housing, including low-cost loans at the earliest and riskiest phases of development.

The program was over-subscribed by a factor of five, Siddall said in a wide-ranging interview with The Canadian Press.

“There’s demand,” he said. “Now, as (interest) rates go up, the economics change just a bit so we’ll see how that all plays out.”

From Siddall’s perch, increasing the supply of affordable housing can help alleviate poverty and promote “inclusiveness” by seeing housing as a vehicle to support other objectives like improved health outcomes.

Siddall said the housing strategy will place a heavy focus on increasing supply — construction of new units and renovations to existing stock.

In “supply-constrained” places like Toronto and Vancouver, high demand pushes up ownership and rental costs, further straining low-income households. That makes it critical that the portable housing benefit not push prices higher, Siddall said.

“If we’re just stoking demand and we’re just supporting demand in an uncontrolled way, that money just basically leaks into higher rents and that doesn’t help anybody,” he said.

“If we say that money can only be spent on this particular area … or with a rent of no higher than ‘X,’ then it can work.”

CMHC officials say markets with greater supply can absorb the increase demand from a portable supplement without driving prices higher. The same might not be the case in other markets, which is why Siddall said designing a portable supplement is tricky.

Wilfrid Laurier University researchers reported this year on Waterloo region’s experiment with 40 portable supplements to people experiencing persistent homelessness.

The results suggested that six months into the program, the benefits improved the ability of participants to stay housed, find what they perceived as higher quality housing, and improved their quality of life through more leisure time and less financial stress.

Courtney Pankratz, the lead author on the study, said interviews unearthed concerns about discrimination from landlords that subsided quickly once they were part of the program because they were guaranteed rent payments on time.

But a key to success is making the supplement permanent and not a limited-time offer.

“A lot of communities will say they’re already doing these programs, but the key difference is the permanent rent assistance,” she said.

“That is often lacking within these programs.”

— Follow @jpress on Twitter

Note to readers: This is a corrected story. An earlier version said researchers at the University of Waterloo were examining housing supplements in the region.