Introduction
A housing sector that that is efficient in its performance can become an instrumental method of meeting the needs and requirements of the Canadian population. The Canada Mortgage and Housing Corporation supports the financing activities linked to the housing needs of approximately eighty percent of the Canadians. Furthermore, the Canadian economy is backed up by the activities that occur in the sphere of housing and mortgage (Dunning, 2012, p. 2).
As already mentioned, eighty percent of the Canadian population is able to find appropriate housing with the use of a private market without any involvement of the government. However, there is twenty percent of the population for which the marketplace is not a solution for a housing issue. For this twenty percent, the government works alongside with non-profit and community organizations in order to provide adequate housing solutions that are affordable. Annually the Canadian Government spends a little over two billion dollars on providing affordable housing through the help of the Canada Mortgage and Housing Corporation (CMHC, 2015, para. 1).
The help is offered through the introduction of initiatives and programs targeted at providing housing. Such programs include assistance in finding temporary shelter, assistance in finding housing for low-income families, and support in transitioning from a temporary to the full-time housing so that families are able to live an independent life.
Current State of the Affordable Housing Sector
Nowadays Canada is exhibiting distinct signs of the need for affordable housing units. Such housing units are predominantly supported and funded by a combination of sources that come both from the federal government as well as provinces and territories. There are many benefits of affordable housing; such benefits include prevention and minimization of homelessness, as well as being cost-effective.
However, in the lack of enough funding, the long-term plans aimed at putting an end to homelessness will not have any result. On the other hand, the funding plans introduced by the government never have a long-term effect. With the help of the support and advocacy from the public sector, the Canadians in need will be able to receive necessary housing and add changes in the already existing governmental plans. In Ontario alone, it has been estimated that each decade the demand for affordable housing is being raised for sixty to eighty thousand households (Sekharan, 2015, para. 7). The graph below illustrates the core housing need of the Canadian population by the age group:
Government Investments in Assisted Housing
Investment in Affordable Housing
The first program that relates to the government investments is the IAH (Investment in Affordable Housing) program through which the government is able to cooperate with Canadian territories to ensure improved conditions of living. Housing improvement is made with the help of offering access to sustainable housing that is affordable and fully suitable for long-term living. The IAH program is planning to invest approximately two billion dollars to the government during the course of eight years, ending the first wave of the funding in March 2019.
The territories that participate in the IAH program are required to provide necessary contribution and are responsible for designing and delivering the set goals. Furthermore, under the IAH initiative, there has been a 50% increase in the supply of affordable housing since 2011. IAH enables Canadian provinces to invest in affordable housing for the population so that all needs and requirements are met.
The government initiatives involve the construction of new buildings, renovation of the old, assistance in household ownership issues, allowance for temporary shelter, as well as providing housing for individuals that suffered from household violence. Since the beginning of 2011, approximately up to 220,000 households have received the assistance from the Investment in Affordable Housing program. The graph below shows the improvements that have resulted from government investment into the social housing sector under IAH:
Affordable Housing Initiative
Affordable Housing Initiative (AHI) was introduced by the Canadian government in 2001. Ending in 2011, the initiative provided housing assistance in the Canadian territories for approximately 1.3 billion dollars. The success of the AHI has made a significant impact on the way the federal government approaches the issue of affordable housing in Canada.
Affordable Housing Centre
Affordable Housing Centre operates in the sphere of public and non-profit organizations that are targeted at creating affordable housing for the Canadian population without involving any governmental help. Since its establishment, Affordable Housing Centre was able to assist the creation of under 70,000 of affordable units of housing. By means of providing knowledge as well as an array of financial tools that involve mortgage flexibilities, insurance, and the funding of proposal development.
First Nation Housing
Through the aid of Canada Mortgage and Housing Corporation and the Aboriginal Affairs and Northern Development Canada, the federal government was able to provide up to three hundred million dollars between 2013 and 2014 in order to fix the problem of housing affordability as well as address the housing needs of the population. The Canada Mortgage and Housing Corporation predominantly focuses its forces at keeping various aspects of housing under control. Aboriginal Affairs and Northern Development Canada, on the other hand, operates primary on the level of the community and gives funding for First Nations that uses it for development and servicing of affordable housing facilities.
The funding of Canada Mortgage and Housing Corporation provides for support of development and maintenance of half thousand new housing facilities, renovation services for approximately a thousand of already build homes as bell as up to twenty-seven thousand units of social housing, as well as the support of First Nations in their abilities to manage and building new affordable housing placed on reserve.
The First Nations Market Housing Fund was launched by the Government of Canada in 2007 and was estimated to involve up to three hundred million dollars in funding. The fund was established in order for First Nations to have a possibility to access private lending to own housing facilities placed on reserve.
Existing Social Housing
The investments put into the already existing housing units remain substantial on the part of the federal government. The social housing funding is provided through the aid of the Canada Mortgage and Housing Corporation and it build on a framework of a long-term cooperation. The first long-term cooperation agreement was established in the middle of the 1940’s.
When the term of the agreement ends, the funding from the federal government terminates. However, the agreement will result in property mortgages being paid off, and the providers of housing will have lower operation costs. If a housing group requires help in ending the term of the agreement, Canada Mortgage and Housing Corporation offers assistance in preparing such groups to the termination of the agreement (CMHC, 2015, para. 11).
Housing Federation of Canada
The Canadian Government has been a major player in the process of helping groups based in the community to establish new reasonably-priced housing for the Canadian population. The governments that served in recent decades have been able to maintain a tradition of putting funding into affordable housing facilities.
The Co-operative Housing Federation of Canada was also involved into the control and assistance in the affordable housing programs and initiatives. Since its establishment, the Federation has been involved in achieving better value from the funding of affordable housing as well as been able to encourage all involved parties to work in cooperation towards a set goal. The Co-operative Housing Federation of Canada (further CHF) has proposed a distinct framework of recommendations for ensuring that all funds received from the Federal government are spent wisely so that every Canadian in need is provided with housing. The recommendations are the following:
Making sure that the process of funding accountability is in free access to anyone. Furthermore, the funding transfers that go to the country’s territories should also be transparent. Despite the fact that the main bulk of the federal government is given to the Canadian territories, the government should gather its forces and target them at reducing the need for affordable housing. The housing situation will improve by means of creating co-operative homes that will be offered to families with moderate and low earning. Thus, the promotion of co-operative housing should become a priority for the government (Co-operative Housing Federation of Canada, 2009, p. 1).
Establishing a new rent-geared-to-income protection program. Canada holds approximately 650,000 units of social housing mostly created under the influence of the federal programs for housing. However, the agreements established in order to allow housing providers to ensure that the low-income families are able to afford the rent are being limited in each year. Thus, the ending of the funding programs will lead to the inability of housing providers to offer affordable rent proposals for low-income individuals, the elderly, and individuals with disabilities.
CHF Canada has a strong opinion that the population wants to ensure that their affordable housing investments are being protected. Furthermore, the population has an interest in sustaining the availability and the cost of the housing. Thus, CHF Canada has put forward a proposal that the federal government should start its work in the sector of the rent-geared-to-income social housing. This will ensure that the government will continue offering affordable rent for low-income individuals in need for housing.
Furthermore, the rent-geared-to-income program will be able to achieve a significant value for the money. In order to sustain the ability to offer reasonably-priced housing for the Canadians in need, the Federal government can use the social housing that already exists. The program’s funding should go hand-in-hand with the current level of programs targeted to housing assistance; no increases should be introduced. Thus, is the government stops the funding, the country will be at risk of losing affordable housing that already exists, no matter whether new programs will be introduced.
Canada Mortgage and Housing Corporation should become a primary lending vehicle for providing affordable loans for the renovation and repair of already existing housing. As already discussed, the Canadian stock of public housing consists of up to 650,000 units; however, these units already require some renovations. Despite the fact that the providers of social housing will be able to make use of one-time renovation funding, such funds will not be enough for meeting all renovation needs of the old housing units. Thus, the housing providers should borrow funds in order to sustain the already existing affordable housing funded by the government. Furthermore, refinancing funds will be put forward the required repairs, energy-saving technologies as well as renovations.
To conclude the section on the Housing Federation of Canada, the Government should ensure a fully transparent process of housing transfers, create innovative programs in order to protect the capacity of the rent-geared-to-income housing, and offer co-operative housing that will have the access to loans of the federal government targeted towards restoring and renovation of the already existing social housing (Co-operative Housing Federation of Canada, 2009, p. 3).
2015 Economic Action Plan
The 2015 Economic Action Plan is a program that supports the commitment of the Canadian government at making sure that the low-income and vulnerable citizens are provided with affordable units of housing. With the help of strictly directed investments, the Canadian government cooperates with territorial entities, First Nations, as well as non-profit organizations in order to maximize the quantity of affordable Canadian housing.
The 2015 Economic Action Plan is based on the planning to invest over two billion dollars for the provision of affordable housing annually over the course of the following four years. This amount also includes the one and a half billion each year in order to maintain already existing housing units. Furthermore, an additional amount of one hundred and seventy dollars will be invested into First Nations to ensure the renovation and construction of on-reserve housing as well as to properly manage the housing stock in cooperation with Aboriginal Affairs and Northern Development Canada and Canada Mortgage and Housing Corporation (Canada’s Economic Action Plan, n.d., para. 3).
As illustrated in the table above, the Canada Economic Action Plan established in 2013 involves the funding of two hundred and fifty-three million dollars each year to make sure that the Canadians in need will be provided with affordable units of housing. The plan will be implemented between 2014 and 2019. In addition, the plan will also provide funding for the renewal os the Homelessness Partnering Strategy that will also be operating until 2019. Through the use of the approach of Housing First, the government will be able to participate in assisting individuals without any homes to settle in houses rather that temporary shelters or streets.
Affordable Housing Pressure Points
Despite the fact that the government invests significant funds into building the system of reasonably priced social housing, the demand for housing still remains and issue and has a possibility to worsen. There are several points that cause pressure on the system of affordable housing. These pressure points are the following:
- Reduction of new investments into the sector.
- Lowering of new rental housing levels.
- Increased pressure on the households with the lower level of income in the sphere of economy.
- Housing assets sustainability.
The most significant pressure point that has an impact on the system of affordable housing is the increased influence on the low-income households. Furthermore, with the changes in the system of social support, those individuals living in extreme poverty are suffering from the inability to live in appropriate living conditions. Thus, the providers of housing should gather all forces and target them at delivering services related to changing the housing conditions for the individuals in need (Zon, 2015, p. 10).
Apart from being influenced by the reduced levels of government investments, low-income households are also suffering from the housing market conditions that make renting affordable housing inaccessible. Construction of new housing built for rental purposes has almost declined to level of the minimum, influenced predominantly by the tax increase.
Nevertheless, the market of housing is based on location, thus, the affordability levels vary within the country, basing on the supply of affordable housing and the situation on the employment market. Despite the fact that renting prices in larger cities like Toronto tend to be higher, there are many more opportunities for getting a sustainable earning that will be more than enough to live on.
Further Advice for the Government Housing Investments
As illustrated in the graph below, the housing affordability trend in Canada calls for immediate actions in order for the individuals in need to afford their housing.
Re-Investing into Affordable Housing
As previously mentioned, Canada has a stock of 650,000 social housing units, both cooperative and non-profit. However, due to lack of funding, the sustainability of their units is at a major risk. Since the replacement of lost housing assets will be much more expensive, the government should work towards re-investing into renovation and maintenance of already existing housing. This is especially relevant for the low-income households. Due to the significant estimated reduction of funding by 2016, re-investment is considered the most reasonable method in adding value to the sector of affordable housing.
On the other hand, re-investing does not mean following the same pattern used previously. With the use of newly acquired knowledge in the sphere of sustainable housing design, the housing providers will be able to maximize its capabilities and respond to the need of low-income individuals and families. In order to achieve some improvements in the area of maintenance costs and environmental performance, the capital finding can become an important asset.
Promotion of Additional Rental Housing Development
The levers of policies that relate the cost as well as the type of the housing development are jointly controlled by the governments of the federal, local, and provincial levels. The current state of the housing-related policies has caused a dramatic decline in the development of rental housing, which led to the pressure of affordability for low-income population groups. Furthermore, the available options of alternative housing rarely succeed in terms of sustainability.
Thus, the government should ensure that the created policies march the housing affordability objectives on every single level. The investments in the area of rental housing economics should be shaped in accordance with all varieties of taxes: property, income, and capital gains. The cost of the building should be based upon the development costs, codes of construction, and the rules of planning the use of the land. Lastly, the marketability of the finished housing project is in turn backed by the investments into the infrastructure, community resources as well as the services of transit (Zon, 2015, p. 20).
In addition to the process of construction itself, the government should also consider the land prices that are being controlled by the local governments. To make sure that the land is being used in the most effective way possible, creative initiatives can become a starting point for the future changes. Keeping the land issue under control, housing providers will ensure low-cost construction and raise additional funds for further investments.
Data Collection for Housing Support Integration
Availability of affordable units of housing is crucial in order to make the established governmental policies work. Nevertheless, in terms of practice, the affordable housing area is rarely connected to the policies.
For instance, the individuals for disabilities require additional equipment and technical aids in their homes, according to Sherri Torjman from the Caledon Institute. However, approximately eighty percent of such housing units can only be found on the private market, which means that the individuals with disabilities are paying much more than they can afford. This also undermines the policies that surround the individuals with special conditions. To fix the issue, an integrated approach that involves making connections between the market costs and what the population is able to pay for it should be put into action.
An excellent example of an integrated approach is the At Home/Chez Spo project. The funding for establishing the safety and health of the community can become leveraged in order to offer sustainable housing for the most vulnerable members of the society while the governments will be challenged in providing funding on their part. The most significant barrier in such funding is the way the government makes its decisions on spending.
Despite the fact that the incentives do not coincide, one sector funding can often influence the funding put into another sector. Apart from the factual evidence acquired from research, the At Home/Chez Spo project has also been able to show the importance of investing into the process of data collection and deep research. Thus, the housing decisions should be based on the outcomes they will have for the population. Appropriate collection of data is instrumental in understanding the outcome of the invested funds as well as the provision of guidance in their pattern of investments (Zon, 2015, p. 21).
Start Building New Units
Despite the decline in the actual development and construction of new housing facilities, it is advised for the Canadian government with the help of Canada Mortgage and Housing Corporation to do what it has done in the past – build new homes. This advice is shared by Davis Hulchanski of the University of Toronto, “All the way from World War II to 1984, there were federal subsidies for the private rental sector. Doing the same today won’t be cheap rental, but you get more being built” (as cited in Hyslop & Ball, 2015, para. 22). In order to make new housing affordable, it is suggested to start renting and funding top-up subsidiaries for the Canadians in need. Furthermore, building new housing units will also be directly linked to providing new jobs for the local population.
Conclusion
To conclude, not all members of the Canadian society can afford to get housing on the private housing market since it does not provide for the needs and capabilities of all individuals (CMHC, 2016, para. 2). For those groups of the population that cannot afford the prices of the private market, the Canadian government along with organizations like Canada Mortgage and Housing Corporation, Investment in Affordable Housing program, Affordable Housing Initiative, and others is able to provide reasonably-priced housing units.
It is suggested that the government continues the development of new initiatives and programs based on better research so that there are no disconnections between the state of the social housing market and the needs or demands of the Canadians in need for affordable housing.
References
Canada’s Economic Action Plan. (n.d.). Web.
CMHC. (2015). Federal Government Spending on Housing. Web.
CMHC. (2016). About Affordable Housing in Canada. Web.
Co-operative Housing Federation of Canada. (2009). Web.
Dunning, W. (2012). Employment Impacts of Housing and Mortgage Activity. Web.
Hyslop, K., & Ball, D. (2015). Can Canada’s Housing Agency Be Restored? Web.
Sekharan, V. (2015). Infographic: Federal Investment in Affordable Housing. Web.
Zon, N. (2015). Access to Affordable Housing. Web.