The Broadbent Blog


Building Health: Canada’s opportunity to improve housing affordability

Decent, safe, and affordable housing is an absolute foundation for healthy lives. Research has shown the critical links between housing and health. Without appropriate and secure housing, our health suffers, our mental health deteriorates, we are more stressed. Without affordable housing we may need to skip on food or medications in order to pay the rent. Every single person requires affordable housing in order to be healthy, and yet so many struggle to find decent housing in Canada, one of the richest countries in the world.

In order to have a thriving population, individuals, businesses, and government must address the challenges head on. In our continued blog series, the Wellesley Institute and Broadbent Institute present three ways the new Parliament could improve housing affordability

Improving everyday affordability for Canadians was repeatedly found to be one of the highest priorities for voters in the federal election. It is hardly surprising that housing affordability is top of mind for Canadians. Both rents and mortgages are consistently the single largest expense for households. Average middle-income families spend more on housing than they do on food, clothing, and recreation combined. On top of this, housing costs have been increasing much faster than household incomes, and the number of reasonably affordable homes has been dropping.  

In 2017, the Canadian government announced the National Housing Strategy (NHS) and pledged to re-establish federal leadership on affordable housing. But two years into the strategy, experts have critiqued the inadequate spending levels and the low number of affordable units being built. Now that the election has concluded with a Liberal minority government, the future of the National Housing Strategy will depend on the support of one of the other parties. With three of the five parties in Parliament having expressed support for the continuation of the NHS during the federal election, it’s time to explore the new opportunities to improve housing affordability across Canada.

Opportunity to Build

Building more affordable housing is the classic way to improve affordability for those most in need. Affordable rental units, non-profit, public and co-op social housing has been shown to be a long-term cost-effective way of improving affordability. In turn, this improves the well-being and health of low-income tenants. Tenants with permanently affordable rents can devote more of their limited incomes to essentials that promote health, such as healthy food and medication. Building social rental housing also benefits tenants not directly living in the housing by taking the pressure off of our overheated rental markets and helping to moderate market rents.

We have done something similar to this before. Up until the mid-1990s, 20,000 non-profit and co-op housing units were built each year in Canada, a time when Canada’s GDP and population were both lower than they are now. There is also precedent for minority governments to be a period of opportunity where significant investments get put into affordable housing. Two recent examples of this are the Martin-Layton housing trusts of 2005, and the Harper stimulus of 2009, both of which invested heavily in affordable housing. 

We can meet in the middle. During the election, the Liberals platform included 10,000 new affordable units a year for 10 years, while the NDP platform included 50,000 units a year over the same time frame. The Federation of Canadian Municipalities has recently called on the federal government to increase funding to build 26,400 social, affordable, and supportive homes over 8 years. Our new Parliament is an opportunity to come to an agreement on an ambitious new building program that parties agree should be a priority.

Opportunity for Housing Benefits

Housing benefits paid to families struggling with high housing costs are an important part of the solution to the affordability crisis as an interim measure to ease housing costs . An increasing number of people face housing costs that exceed their affordability threshold (shelter costs over 30 per cent of income). This forces cutbacks on other necessities such as healthy food and medications. Housing benefits can alleviate these shortages, be rolled out quickly and be tailored to provide the right level of support.

Increase benefits. The Liberals’ National Housing Strategy plans to harness the power of housing benefits with the Canada Housing Benefit. This benefit is set to begin rolling out in April 2020. However, it is unclear if benefit levels will be high enough to make a significant difference for families struggling in Canada’s city regions, where market rents have been increasing fast. The Housing Benefit will be dependent on provincial cost-matching, potentially leaving hundreds of thousands of eligible Canadians in need and unable to receive this benefit. 

Higher, faster, more direct. A well-designed and financed housing benefit that reaches those in need and fast, can be one of the key opportunities for improving housing affordability for Canadians. It will be important that the housing benefit is paid directly to tenants, operated through the tax system, and is large enough to assist those in need. 

Opportunity to Reframe our Housing System

Our housing system is currently structured to appeal to private investors, to favour homeowners over renters, and to view housing as an investment vehicle. Now is an opportunity to reframe what ‘housing’ means and bring it back to its foundation – a place for people to live, to grow up, to feel safe.

A rights-based approach to housing. The message that housing is a human right was brought to Toronto City Council in 2019 by Leilani Farha, the UN Special Rapporteur on the right to adequate housing. A few months later, it was passed in legislation by the federal government. Both Toronto City Council and the federal government have acknowledged housing as a human right, but a rights framework needs to go further than simply putting it into law. It requires mechanisms to ensure that this right can be actualized — particularly by those who need it the most. 

Implement a rights framework through policy. Farha’s recommendations include: creating pathways for people requiring advocacy; and legal and/or justice remedies in order to address deep-seated housing challenges. The newly created Federal Housing Advocate could integrate these elements, once implemented in 2020. Ultimately for a rights-based approach to be put into action, building more affordable housing is required.

Supply housing for the public good. Rather than a continuation of policies that benefit speculators and treat housing as a commodity, we need to focus on supplying housing directly for working and middle-class Canadians. Raising the capital gains tax as well as implementing a foreign buyers tax are two measures that remove the incentive for profit making from housing and re-center its original purpose. 

Building a healthy and thriving Canadian population requires addressing Canada’s housing affordability crisis. Housing stability, quality, safety, and affordability all affect health outcomes. Adequate financial investments and ambition are required to achieve this. This minority Parliament serves as an opportunity for the government to work with opposition parties and housing experts who support their commitment to delivering a meaningful national housing program — one that would lay the foundation for a healthy population and responsive housing market for decades to come.

 

Note: This blog post was edited from a previous version that misstated the call to action from The Federation of Canadian Municipalities, incorrectly citing “23,000 social and affordable homes over 10 years” to the corrected version of “26,400 social, affordable, and supportive homes over 8 years”.