Tag Archives: Housing

Nov 28 2017
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Housing Policy, Politics

Canada’s Long-Awaited National Housing Strategy: Initial Thoughts

On November 22, 2017 Prime Minister Justin Trudeau’s Liberal government announced a National Housing Strategy aimed at addressing affordability problems in the Canadian housing system, primarily among low-income households.

The Liberal strategy aims to add 100,000 new affordable units to the Canadian housing system and lift 530,000 families out of core housing need.

Recent census data shows that in 2016 1,775,570 rental households spent more than 30% of their income on shelter (a common measure of affordability). Of these households, 282,825 were living in subsidized housing and 1,536,740 were not.

Clearly, the need exceeds the supports that will roll out over the next 10 years therefore targeting of some kind will be necessary.  One rationale could be the prioritization of households with children. A recent Statistics Canada report showed that 1.2 million Canadian children live in low income households representing almost 1/4 of all low income individuals. This approach could make a significant impact as far as reducing child poverty is concerned.

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Nov 13 2015
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Homelessness

Reconciling the Politics of Homelessness

Over the last two decades, the politics of homelessness in North America has undergone a significant metamorphosis. Towards the end of the 1990s, as compassion fatigue set in and homelessness worsened a new field of policy experimentation opened up. Out of this policy field emerged two models that proved incredibly mobile: the 10-year plan to end homelessness and the housing first approach. Presented as evidence-based ‘best practices,’ these models have since become the norm in cities across North America. In a recently published chapter I attempt to critically engage with the discursive spaces that gave birth to this policy field. I do so to deepen understanding of the democratic stakes involved.

The volume the chapter appears in can be accessed here and the chapter can be downloaded here.

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Sep 11 2015
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Housing Policy

The Seemingly Impossible Challenge of Social Housing

The release of a Government of Alberta report on the state of social housing in the province is attracting some controversy today (see CBC report here). The government report purportedly shows (I have not yet acquired a copy) that no provincial money has been invested in the construction of new social housing since 2011. This revelation is controversial because it is out of step with the province’s ambitious plan to end homelessness by 2019. This goal was set in 2008 by then premier Ed Stelmach and it was accompanied by a commitment to spend 3.3 billion dollars on housing and homeless services. It seems what money was spent on ending homelessness has not found its way into ‘bricks and mortar’ projects.

This is particularly troubling for a city like Edmonton where I currently live. In 2011, just as provincial dollars for social housing were purportedly disappearing, the Edmonton Area Community Plan on Housing and Supports 2011 – 2015 was completed and released. This plan was formulated to guide community efforts in addressing housing needs in the Edmonton area over a five year period. One of the focus areas of this plan was housing supply. Among the goals was increasing the supply of market and non-market rental units that are suitable, adequate, accessible, and affordable.

In 2011, the need for affordable housing was clear. The plan estimated the gap in non-market affordable housing to be 19,000 units and it forecasted that this gap would grow to 22,000 units by 2015. The significance of this gap was clear to the stakeholders who were consulted and the committee that prepared the report who wrote,

The shortage of non-market and market affordable housing in the community was the greatest need brought forward in the consultations. Affordable housing is needed by a broad range of lower-income residents across a range of demographics, including some seniors, single parent families, newcomers, Aboriginal households, young families and those who are working at low income jobs (p. 42).

So it seems that just as the provincial funding tap was diverted or worse turned off cities such as Edmonton were identifying affordable housing an immediate need. Edmonton Homeward Trust’s 2014 Annual Report identifies two social housing projects underway and a handful of renovations to existing social housing projects. But these appear to be units of supportive housing rather than private subsidized units. It remains to be seen how deep the need for affordable housing has grown in the last five years. The release of the provincial government report and the revelations it contains also begs the perennial question, why is it so difficult to see non-market affordable housing manifest on the ground when the demand for it grows every year and politicians commit to investing in it?

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May 07 2015
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Housing Policy

DEVELOPING SOCIAL EQUITY IN THE CITY AND BEYOND: THE POTENTIAL OF COMMUNITY LAND TRUSTS

Mike Lewis, executive director of the Canadian Centre for Community Renewal, and I wrote this piece to draw attention to the promise and potential of mutual home ownership models and community land trusts in particular. More writings on this topic can be found here.

Introduction

Housing is the bedrock of urban life. It is foundational to personal development, social and economic wellbeing and to overall standards of living and quality of life. Housing is also a commodity. An overwhelming majority of the 13.3 million households in Canada obtain housing through the private market. It is generally agreed that Canada’s housing system is, in practice, market-driven and primarily orientated around private homeownership.

But this ‘ownership model’ is not without its problems, especially when it comes to issues related to social equity. Today, housing affordability problems are rife in many urban and high amenity communities in Canada. Vancouver is perhaps the extreme case. An average three bedroom bungalow built in the post-war early 50s cost $14,500 in the west end Kerrisdale neighborhood – 3.5 years of a carpenter wage. The same house went for $1.6 million just 60 years later – 33 times the annual wage of a carpenter.

How does this happen? True, wages have been relatively flat for a large part of the population for the last 4 decades. Fewer and fewer people can fit within the conventional ‘affordable housing’ target; 30% of gross household income. In 2011 this number was over 3.3 million households (Statistics Canada 2013).

Wages, while obviously important, cannot hold a candle to a much more powerful influence; the dynamic embedded in the private property market, where 69% of Canadian households (or 9.2 million homeowners) participate in its ups and its downs. The problem for high amenity communities is the prices just keep going up. The causes can be diverse – population increase, rapid economic growth and uplift in the housing market that come from public and private investments that increase the attractiveness of a particular place.

Most of us know how it works. If one qualifies for a mortgage and is prone to thinking of housing not only as a home, but also an investment, homework is done to position oneself in a location that may be able to ride the uplift of other’s investments. The profits can be enormous for householders and other real estate owners.

Consider the £3.5 billion public investment in the Jubilee subway line in London, England. The private property within 1000 yards of each station increased in ‘value’ by £13 billion, a windfall that went mostly to corporate landlords. Not surprisingly rents soared; a fine example of public investment accruing to private pockets and ordinary renters paying the price.

But what if the value created by public and other private investment could be captured so it goes onto the community balance sheet rather than as unearned income into private pockets? The answer to this question is hugely important because if it is possible, progress on affordability is conceivable.

The Community Land Trust (CLT) is one housing model providing such answers.

The Community Land Trust: A Proven Model

The CLT model is organized as a non-profit, multi-stakeholder organization committed to acquiring, stewarding and managing land in ways that keep the owner occupied or rental housing upon it affordable in perpetuity.

The CLT tenure does this by separating the ownership of the land from the ownership of the buildings on it. The land is retained forever in trust by the CLT for community benefit. In short, it effectively and permanently removes the land from the market. By contrast, buildings on the CLT’s land can be owned by a variety of entities – a single family household, a co-operative, a non-profit, even a small business.

CLT land is never sold to the inhabitants; it is leased. Written into the lease are clauses that restrict the owner occupant from pocketing the profit from an upswing in the market, unlike the normal private property owner. The lease has a resale formula that may share some of the equity upswing but the greatest portion of the unearned profit stays on the community balance sheet. The CLT exercises this power through a pre-emptive right to buy housing units when they are resold. The departing owner has the contractual obligation to sell their housing back to the CLT at a price set by the resale formula.

And it works. There are over 260 CLTs in the U.S. extending from rural villages to initiatives that cover entire cities or counties. The Champlain Housing Land Trust in Burlington, Vermont is one of the best known examples. Between 1984 and 2009 the CLT had built and otherwise acquired over 2500 units of owner occupied houses and rental units. Burlington is a high amenity community that started the CLT because of upward pressure on house prices. Astoundingly, their housing stock has increased in affordability by 20% over the last 20 years (Lewis and Conaty 2012).

Such results had already begun to attract municipalities who in the U.S. are important players in affordable housing. After the housing meltdown they became even more interested in the robustness of the CLT land stewardship model. Across the U.S. CLTs radically out performed sub-prime and conventional mortgages in terms of both delinquencies and foreclosures (Thaden 2010). In both categories CLT housing proved itself much more stable. Losses hardly registered whereas they were high in conventional mortgages and soared in sub-prime.

Stemming the tide of urban social inequity: Scaling up CLTs

The potential of CLTs for addressing social inequities in Canada’s housing landscape is substantial. First, CLTs lock in affordability. The rising cost of housing has put incredible strain on household finances and has made housing itself out of reach for some. These affordability problems are most acute among low-income groups such as lone-parents who experience enormous difficulty finding housing they can afford. While social housing exists in principal to address these affordability problems government subsidies have precipitously shrunk over the last 25 years resulting in inadequate supply (Gaetz et al. 2014).

Second, CLTs can help alleviate housing related indebtedness. The rising cost of housing is driving the accumulation of record levels of household debt (Walks 2013). Households in Canada’s large, metro regions are, generally speaking, the most indebted. Household indebtedness is greatest in the suburban fringes and in gentrifying inner city neighborhoods where young families, immigrants to Canada, single parents, and low-income households are disproportionately affected (Walks 2013).

Third, CLTs can help preserve neighborhood diversity. Rapid increases in house prices have deleterious consequences for social equity at the neighborhood level. The gentrification process tends to decrease levels of social mix and increase income inequality; in other words, neighborhoods that rapidly appreciated in terms of their land values often see reductions in their share of immigrants, visible minorities and low-income households, becoming ‘whiter and wealthier’ in the process (Walks and Maaranen 2011).

Alternatives to Canada’s traditional ‘ownership model’ are badly needed to address these fundamental problems, alternatives that transcend rigid dichotomies –privately owned vs. publically owned, market-driven vs. collectively controlled, owners vs. renters – that have structured tenure norms in Canada’s housing system. CLTs are one such alternative.

REFERENCES

Gaetz, S., Gulliver, T., and Richter, T. 2014. The State of Homelessness in Canada 2014. Homelessness Hub Press: Toronto, ON

Lewis, M. and Conaty, P. 2012. The Resilience Imperative: Cooperative Transitions to a Steady-State Economy. New Society Publishers: Gabriola Island, B.C.

Statistics Canada. 2013. Homeownership and Shelter Costs in Canada. Statistics Canada: Ottawa, ON.

Thaden, E. 2010. Outperforming the market: Making sense of the low rates of delinquencies and foreclosures in community land trusts. National Community Land Trust Network: Portland, OR.

Walks, A. 2013. Mapping the Debtscape: The Geography of Household Debt in Canadian Cities, Urban Geography, 34(2), 153-187

Walks, A. and Maaranen, R. 2008. Gentrification, Social Mix, and Social Polarization: Testing the Linkages in Large Canadian Cities. Urban Geography, 29(4), 293-326

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Jan 03 2015
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Housing Policy

Affordability, Supply and the Rental Market

Awhile back I was asked what policies cities should be pursuing to ensure an adequate supply of rental units. Here is what first came to mind.

Context is important. Five things stand out.

First, housing is a social determinant of health and wellbeing in society. Affordable housing is a contributor to better population health. A population that is adequately housed is healthier than a population that is inadequately housed or precariously housed. For instance, affordability is an important indicator of the risk of homelessness. Cities with affordability problems generally experience a higher incidence of homelessness. Homelessness is terrible for your health.

Second, when we talk about housing it is more constructive to refer to the housing system rather than the housing market. When we talk in terms of the housing system we acknowledge that both market and non-market mechanisms are used to allocate housing. In Canada, a vast majority of us obtain housing through the private market by buying housing but a significant number of us rent. Non-market housing tends to be the source of housing for low-income groups who cannot purchase or rent housing at market rates. The important thing to recognize is that this Canadian system is one kind of housing system. In other parts of the world, Europe in particular, there are much higher proportions of renters and a greater diversity of non-market forms of housing.

Third, housing affordability is shaped by wider economic and social trends. Population growth, household formation (how many singles versus families are seeking housing), and migration all affect the demand for housing. When demand rises quickly, too quickly for developers and home-builders, prices rise. This is exacerbated in regions and cities with high incomes. The cost of land, labor and construction materials can also cause prices to rise.

Fourth, housing affordability is affected by government regulation and policy. Governments at all three levels – Federal, Provincial and Municipal – play a role in the housing system. The Federal government influences lending rates and securitizes mortgages, the provincial government operates housing programs, and the municipal government oversees urban development and home-building.

Fifth, when it comes to analyzing housing affordability it is crucial to settle on a clear and measurable definition of ‘affordable housing.’ What kind of affordability measure is best suited? A common definition of affordable housing is housing that costs a household no more than 30% of their income. This is the definition used by Statistics Canada. It is also measurable (albeit recent changes to the census aren’t helping work in this area!).

But to your question…the private, rental market is a vital part of the housing system when it comes to affordable housing. Unfortunately, two trends have shrunk the supply of affordable rental units in the private rental market.  First, inadequate government policy in the area of rent control (or lack thereof) have made it too easy for rental property owners to raise rental rates during periods of high demand and low vacancy. Second, the high demand for housing coupled with high incomes and cheap, easy credit from banks has fueled the conversion of rental units into privately rented condos removing a significant proportion from the private rental market. This was particularly pronounced in Edmonton beginning in 2007.

In the meantime there is a significant population who need to rent in the private market to stay housed. What to do?

There are a range of policy options available but unfortunately no magic bullet solution. In practice, a combination of different approaches involving private and public stakeholders and all three levels of government is required.

One traditional approach has been to build social housing consisting of units that are subsidized at below market rates. But this form of housing brings with it a whole host of issues not least of which is stigmatization of tenants and, relatedly, their overconcentration within inner city neighborhoods (as they generally receive stiff resistance in wealthier suburban neighborhoods).

A more recent approach has been inclusionary zoning. In this approach a municipality mandates that a developer allocate a certain percentage of units in a development to be not only rental units but also made available at affordable rates. This generally requires not only the buy-in of developers but also governments and in some cases charitable organizations who must step-forward to subsidize these units so they can be offered at below-market rates. In most cases it is a matter of finding the right incentives. It is also a matter of carefully considering neighborhood location and context.

Third, there are some recent urban planning approaches that encourage creative forms of infill housing. Here I am thinking about ‘granny suites’ (secondary suites) above garages or separate dwellings at the back of lots. Some cities offer homeowners incentives (in some cases it has been cash) to develop these suites with the understanding that they would be rented at below market rates for a set period of time.

Finally, there is the more classic welfarist approach that involves giving low-income individuals and families a stipend (or voucher as they are called in the U.S.) to purchase rental housing in the private market. The challenge in places like Alberta is that there are examples of working individuals and families who are not low-income but nonetheless cannot afford rent in the average apartment (especially single parents with children who require multi-room dwellings). Another challenge is that when vacancy rates are near zero a housing voucher does not do a family much good.

Now, I’ve only outlined a few, there are many, many more. And I’ve really only captured the more conventional approaches. There are some very interesting and important models being developed in the cooperative sector (co-op housing) aimed at meeting the housing needs of a diverse range of people. I think approaches such as those being developed in the cooperative sector are really important to profile because in many regards it is there where ‘new ground’ is being broken.

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