The current funding and delivery system for housing in Canada is simply not sustainable at its current levels and is in need of a new approach.
The Federal Budget and affordable housing investments
In 2017, the Canadian Federal Budget proposed to invest more than proposed to invest more than $11.2 billion over 11 years. If the funds were used exclusively to build affordable houses, it would provide between approximately 32,000-37,000 dwellings (based on an average construction cost of $300k-$350k per dwelling) – a somewhat simplistic equation of total funding divided by construction cost.
When this is compared to the more than 171,000 people that are on wait lists for social housing in Ontario alone (ONPHA waitlist Survey 2016), it does highlight the magnitude of the issue. And it also highlights the fact that capital grants alone won't get anywhere near addressing the totality of the affordability issue.
Governments on their own cannot afford to continue providing capital grants to solve this critical issue!
What will $11.2 billion in government funding actually buy?
The latest Federal Budget announced a list of initiatives to include:
In addition, the Government announced a new $5 billion National Housing Fund to address critical housing issues and better support vulnerable citizens, which will be administered by the CMHC.
This fund is supposed to encourage investment and collaboration, expand direct lending for new rental housing supply, provide capital grants, and continue to preserve the current social housing stock and technical and transformation fund for the social housing sector.
As always, the devil will be in the detail as to what this will lead to, but it does raise the question: what else can be done to assist our Governments in delivering more affordable housing?
Download the full article to learn more about the five investment ideas for Canada.