WI backgrounder: Feds finally reach housing framework deal with provinces / territories - facts and figures

Three years after the federal government promised a five-year extension of key national housing investments, a new short-term housing framework agreement has been announced with the provinces and territories. There’s no new money in today’s announcement, and the new agreement mirrors the flawed 2001 federal / provincial / territorial affordable housing framework agreement. But the good news is that despite significant cost-cutting measures in many departments, the federal government intends to honour its 2008 housing promise.A preliminary analysis of today’s announcement shows that:

AFFIRMING 2008 COMMITMENT: In 2008, the federal government announced a five-year extension of several housing and homelessness investments. Advocates had been worried that government-wide cost-cutting might claim some of the previously announced spending. Today’s announcement calls for $1.4 billion in combined federal and provincial / territorial / municipal and third party housing investments over a three-year period – or about $470 million annually.

NO NEW INVESTMENTS: The Wellesley Institute’s Precarious Housing 2010 report notes that federal housing and homelessness investments has been shrinking since 1989. The latest corporate plan from Canada Mortgage and Housing Corporation notes that overall federal housing expenses will drop sharply from $3 billion in 2010 to $1.75 billion in 2014 – a cut of $1.25 billion. Today’s announcement doesn’t add any new dollars that were not already announced. The dollars in today’s announcement are already included in the CMHC corporate plan that documents shrinking dollars. The sharp drop in federal housing spending is due to two major factors: The expiry of short-term funding commitments (including the 2009 federal stimulus dollars); and the “step-out” of federal housing commitments that was launched in 1996 and accelerates over the years.

FEWER AFFORDABLE HOMES: The CMHC corporate plan notes that the number of Canadian households assisted through federal housing investments will shrink from 626,300 in 2007 to 540,800 in 2015. That’s a drop of 85,500 households – or a 14% cut over nine years. Since the dollars in today’s announcement are already reflected in the CMHC corporate plan, the new framework agreement likely won’t affect the ongoing decline in federally-assisted households.

NO TARGETS, NO TIMELINES, NO STANDARDS: The new framework agreement sets out a series of general goals broadly similar to those in the 2001 housing framework. But there are no specific targets to determine accountability for success. The latest framework agreement, like the 2001 deal, includes a commitment to “accountability,” but there is no mechanism to ensure true accountability. For instance, under the 2001 deal, provinces and territories were required to prepare annual audited financial statements and annual performance reports that included specific details on the dollars spent, and the housing built. The communications protocol said that these statements were to be public, but not one statement was ever released under the 2001 agreement, despite repeated requests over the years. Today’s announcement does not mention any new mechanism to ensure transparency and accountability.

ESTIMATING NATIONAL HOUSING NEED: About 1.5 million households (13% of all households in Canada) were in “core housing need” in 2006, according to Canada Mortgage and Housing Corporation’s main indicator of housing need. The numbers have likely risen significantly since then due to the 2008 recession. There is no reliable national indicator of people who experience homelessness, but the number is likely in the hundreds of thousands. The funding in today’s announcement will help to fund repairs to perhaps 20,000 substandard homes; and perhaps 3,000 new affordable homes annually. Over the three years of today’s agreement, perhaps 9,000 new affordable homes will be built, and 60,000 rundown homes renovated. In total, the new and renovated units in today’s announcement will barely make a dent in the national numbers of Canadians who are precariously housed.

FURTHER LEGAL DEALS REQUIRED: The latest framework agreement, as in the 2001 deal, requires bilateral housing deals to be negotiated between the federal government and each of the ten provinces and three territories. It took four years to conclude the bilateral deals (the final bilateral deal, between the federal and Ontario governments, was not signed until 2005).

DEFINING AFFORDABILITY: In his 2009 review of the federal-Ontario affordable housing program, the Ontario Auditor General noted that the definition of ‘affordable’ was so loose that the actual rents charged in the new homes were much higher than the rents that low-income households on waiting lists could afford to pay. The bilateral housing deals signed under the 2001 agreement used private market rents as a benchmark for determining affordability, but private rents have been outpacing renter household incomes in recent years. To ensure that the neediest households can actually afford the new homes, a new measure of affordability will be required that is based on the real income of low-income households, rather than the market rents charged by private landlords.

CREATIVE ACCOUNTING: When federal dollars are transferred to the provinces and territories, it is supposed to create new housing, and not simply be used to replace provincial spending with no net gain in new homes. Housing advocates noted that creative accounting by some provinces may have led to a substitution of federal dollars for provincial spending in the 2001 framework agreement. For instance, in 2009, the Ontario Auditor General noted that the provincial government was unable to account for hundreds of millions in federal dollars that were supposed to be spent on affordable housing. This loophole in the 2001 agreement appears to remain wide open in the 2011 framework agreement.

HOUSING AND HEALTH: Housing is one of the most important fundamentals for good health. Research by the Wellesley Institute and others at the local, national and international level confirms the link between poor housing and poor health, as well as premature death. Research also suggests that good housing contributes to better health for people and communities.