Condos and crash beds: London's Community Housing Strategy

Council gets a crash course on affordable housing in London

This morning's London Free Press headlines boasted "We're in the condo big leagues". Later this week, Tricar will pour the foundation for its second Renaissance tower which will include a penthouse suite listed at $1M. A second smaller one will be more affordable, only $950,000.

"This will set the market in downtown London and it will set the record," according to Tricar Group president Joe Carapella.

That's one view of housing needs in this city.

It was a different story at the Community and Neighbourhoods Committee meeting last week. There, committee members received a presentation by Community Services General Manager on the state of housing and homelessness in the city of London. It is not a pretty picture.

Although London is considered a leader in raising and addressing the issues of homelessness and affordable housing, thanks to the dedication of staff and the tireless activism of former Councillor Susan Eagle, too many Londoners lack safe, affordable housing.

In 2009, nearly 40,000 households in the London area had to spend more than 30% of their gross income on accommodation. Nearly half of tenants are in this position, and one in five spends more than half of their income just to have a roof over their heads.

Over the last decade rents have increased more rapidly than incomes, especially for those at the lower end of the income scale. Although vacancy rates are climbing, these vacancies are mainly in new buildings with higher rents. The average one-bedroom apartment rent is currently $714, well beyond the means of the working poor and certainly unaffordable to those on Ontario Works or Ontario Disability who make up nearly six out of 10 in social housing, especially single persons whose maximum monthly shelter allowances are $364 and $464 respectively.

Although many Londoners experience difficulty in meeting mortgage payments and paying rent, 13% of London area households (22,625) have a core housing need, that is, they need to spend more than 30% of income for the most basic decent housing, and about 4,500 individuals and families were on the waiting list for social housing. They may have some time to wait, up to eight years, especially if they have no special circumstances such as being homeless or victims of domestic violence.

The greatest difficulties are faced by those who are homeless. Many of the homeless have mental health impairments and may suffer from addictions both of which are exacerbated by homelessness.

The traditional approach to dealing with homelessness has been the provision of shelter beds with a lesser emphasis on homelessness prevention. In London there are approximately 360 shelter beds at a cost of more than $6M per year. It costs about $1400 to maintain one person in a shelter bed for a month! It is estimated that to maintain a shelter approach in London with no exit strategy will cost upwards of $200M over the next 20 years.

But that is only a small portion of the overall cost of homelessness. When you add in the costs of emergency medical services and social services, policing costs, and costs to the justice system, it soon adds up to $55,000 or more per year to keep a person homeless, without even considering the costs of lost productivity. Much of that is a cost to the province, but the City too incurs significant costs in needed services and in quality of life forgone by all its residents.

A few years ago, the provincial government offered municipalities a pilot project to assist the homeless to move from shelters to permanent housing. In London, the Hostels to Homes project met with great success. Of the 440 participants, 98% made a successful transition. It required an investment in providing the appropriate supports for a vulnerable population, but the savings in cost prevention and human dignity would significantly outweigh that. Unfortunately, the government discontinued the funding last year.

London has, with the assistance of the federal and provincial governments, made impressive gains in providing affordable housing and in devising and implementing prevention programs. Over the past decade we have added nearly 1,200 new affordable housing units to the London housing stock. Our $2M per year investment has leveraged another $130M in federal, provincial and private funding. Our London CAReS initiative which provides services to the most vulnerable saves lives and dollars.

But the need is growing more rapidly than our ability to intervene, especially in a time of economic re-structuring and demographic shifts. We need to partner with other levels of government that are in sync with each other, that have an integrated strategy for affordable housing, and that provide a stable source of funding so that the municipality (which is in the best position to assess and address the needs) is able provide solutions to this growing problem.

Last fall, London City Council adopted a comprehensive strategy for addressing homelessness and housing, one that would focus attention on the core needs but also provide for affordability concerns at the level of the working poor and the more moderate income levels.

The solutions won’t be cheap. But the costs of doing nothing will cost us all far more.

The provincial government currently has in second reading its draft Housing Services Act, 2010 to replace the existing Social Housing Reform Act. There is much that is promising in this legislation but it is unclear whether it will be proclaimed before the next election in October. And housing advocates point out that there is no new funding in the provincial funding strategy.

Following the presentation, there were a number of questions from the committee members which suggested that the committee is supportive of the strategy. The mayor, in particular, as a former federal minister of housing, expressed his appreciation of the work of the administration and the previous Council. “It's more inexpensive to house people than the keep them in jails or hospitals,” he pointed out.

As someone who served on the Council Housing Leadership Committee for four years, I was pleased to hear his commendations. He gets it, I thought.

Unfortunately, he then went on to decry the actions of the federal government for reducing the amortization period for homebuyers from 35 to 30 years.“ I am really discouraged on that front,” he stated.

So maybe he doesn’t get it after all.

Click on London Community Housing Strategy for the full report adopted by Council. Note that the Council added an amendment to add 1200 new units rather than the 1000 units identified in the consultant's report.