Chris Hodgson, Ontario’s Minister of Municipal Affairs and Housing, came to Kitchener last Friday to give the details of a cost-shared housing program that was first announced more than a year ago. The federal government committed $245 million for Ontario’s portion of the program and, since then, has been negotiating the details of how the province would match that.

It turns out that they aren’t matching it at all. Over five years, Ontario will contribute approximately $20 million in new funding (about four per cent of the total cost of the cost-shared program). The balance of the province’s “matching funds” represents money previously spent on unrelated programs such as long-term care beds, or will actually be contributed by someone else — municipalities, charities, private developers and non-profit groups.

Like a poker player that comes to the table with no money butstill wants to set the rules of the game, Ontario has nevertheless been successful in steering the new housing program in a direction that matches their own free market ideology. Readers may recall that the Harris/Eves Tories were elected after promising to “get out of the housing business.” They accomplished this objective by first canceling 17,000 units of co-op and non-profit housing that were under development, then by cutting more than $300 million from housing subsidies, and finally by downloading to municipalities the responsibility for funding existing social housing.

The results of this policy direction have been predictable.Despite the suggestion that the private sector would rush in to fill the void left by killing non-profit housing programs (especially given that the province also eliminated rent control on all vacant units), fewer than 2,000 rental units per year have been built since 1995. The government’s ownestimates indicate that more than 18,000 new rental units will be needed each year just to meet the demands of a growing population. At the same time, a study recently released by the Ontario Non-Profit Housing Association found that, each year, Ontario loses an average of fifty per cent more private rental housing than is built. Ontario actually had fewer private rental units in 2001 than in 1991.

Meanwhile, rents are skyrocketing and the income of tenants is not. The median renter household income is virtually unchanged from fifteen years ago at just over $23,000. These 885,000 renter households have approximately $580 per month available to pay rent — about $300 less than the average rent for a two-bedroom apartment in Ontario. This means that more people are at risk of homelessness, more people are faced with a choice between paying the rent and having enough to eat, and more people are clogging waiting lists for existing social housing.

Simply put, Ontario needs more affordable housing now, but there is little chance that the units delivered under the new federal-provincial housing program will meet that need. Despite the fact that the initial framework agreement reached last year said that “this initiative needs to create affordable housing for low to moderate income households,” the program announced last Friday will be based on “average market rents,” not affordable rents. Furthermore, there is no guarantee that units will stay affordable, even if they start out affordable. The government is promoting the idea that these more expensive rental units will create a “trickle down” effect that will free up cheaper units. There is little evidence that this theory has ever worked, or that it will work now.

Steering most of the public subsidies into private units also contributes to the fact that the units will be too expensive for low and moderate-income renter households. Co-ops and non-profit groups are eligible for up to a quarter of the units to be developed, but there are many financial and logistical barriers to their participation. This preference for the private sector is based on ideology, not on experience. A 1997 CMHC study (conducted by EKOS Research) found that the cost to taxpayers of subsidizing co-op and non-profit housing was far less than the cost of subsidizing private developers and landlords. After twenty-five years, social housing projects cost taxpayers $800,000 less than comparable private rental projects.

Still, it is significant that the province has felt enough political heat due to the results of its misguided housing policies that it would even want to pretend to be doing something about the problem. “Seven years after Ontario decided to get out of the housing business by cancelling 17,000 affordable units and cutting hundreds of millions in funding, the province has finally realized its policies helped trigger a province-wide affordable housing crisis,” commented Tina Stevens, President of the Ontario Council of the Co-operative Housing Federation of Canada. “Beyond that, there’s little good news in this announcement.”

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Scott Piatkowski

Scott Piatkowski is a former columnist for rabble.ca. He wrote a weekly column for 13 years that appeared in the Waterloo Chronicle, the Woolwich Observer and ECHO Weekly. He has also written for Straight...