An announcement by the feds for social housing may not be quite what it seems.
“City to get $12.8M for social housing” claimed the headline in the London Free Press Wednesday morning.
City councillors, if any are around during March break to see it, could be forgiven for thinking that the money would come in handy for the much needed work on an aging stock of social housing over the coming year, especially when budgets have been tightened. After all, the article states, “millions of dollars will be poured into repairs for more than 5,000 housing units” in London. That could also kick-start a lot of new jobs, thereby boosting the local economy.
However, before anyone starts drawing up blueprints or applying for construction jobs, a little reality check may be in order.
The money announced by the federal Minister of Human Resources and Skills Development, Diane Finley, is not new. In fact, most of it has been spent and the work completed during the past year. All the projects being funded were approved by council in July of 2009. Those slated for the 2009/10 funding have been completed as well as 44 of the 73 approved for 2010/11.
The funding is part of the Social Housing Renovation and Retrofit Program, a capital grant program under the Canada-Ontario Affordable Housing Program that funds the repair and regeneration of eligible social housing projects. To qualify under this program, projects must be subject to the Social Housing Reform Act 2000 (SHRA) or have an ongoing Operating Agreement in place.
The Operating Agreements between the non-profit social housing providers and the federal governments were put in place 20 or more years ago when the projects were being constructed and mortgages negotiated. Now that the mortgages are gradually being paid off, the federal government contends that the projects should be self-sustaining, that is, ongoing costs should be covered by tenant rents. However, charging market rents would mean that the units are no longer affordable to the vast majority of persons in need of housing.
Meanwhile, the stock of housing is in need of significant upgrades and repairs and under the SHRA 2000, the City of London is required to provide 5,939 rent-geared-to-income units. Unless there is continuing and reliable support from higher levels of government, it will be up to the ratepayers of London to cover the costs of doing so. Not a happy prospect for a mayor simultaneously committed to more affordable housing and a four year tax freeze.
What the government’s announcement did not say is that the federal contribution to existing social housing units has been declining. By next year, it will have decreased by nearly $400,000 from what was provided in 2007; unless there is a significant change, that shortfall will be over $8.7M by 2035. Federal funding to existing social housing programs will expire as local agreements expire.
This scenario is being played out across the country as municipalities struggle with ensuring the provision of affordable housing to a population where, as a result of changing economic conditions, more and more people are slipping from middle-class to low income status and are in need of affordable housing.
Last year, London delegates brought this issue to the attention of the Federation of Canadian Municipalities at its annual meeting in Toronto. The convention overwhelmingly endorsed our resolution as follows:
That the commitment and renewal of 2009 expenditures levels at the federal level be maintained in order to preserve and modernize social housing assets in order to serve future generations of households in need.
Next week we will hear the details of the proposed federal budget. Will there be a commitment to affordable housing and maintaining those infrastructure investments?
Or will it simply be another litany of self-congratulation in preparation for an election?