The high cost of affordability

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Affordable housing is crucial to the economic and social vitality of every municipality. Without it, people cannot afford to live here, which means they will look for jobs in places they can afford. Young people, especially, will move to places they can afford better.

Collingwood is especially vulnerable to housing issues.* Given that the growth trend in our area is in low-paying (minimum wage), and part-time employment, finding affordable housing has become increasingly difficult for many people. Simcoe County itself estimates that a “single individual on Ontario Works would need to spend 108% of his/her monthly income to afford to live in the County.”

And as the Simcoe County housing strategy continues:

The Southern Georgian Bay area, while home to a thriving tourism industry, is also experiencing an aging population, high market rental rates, and a higher incidence of low income in private households.

Skyrocketing real estate costs contribute to the devaluation of a community. They push up taxes, living costs, rent, and utility bills. It takes a mature, wise and compassionate council to find ways to counter rising taxes and keep their community affordable. **

As the Ministry of Municipal Affairs and Housing notes on its website,

Decent housing is more than shelter; it provides stability, security and dignity. It plays a key role in reducing poverty and building strong, inclusive communities.

But housing is a complex, challenging issue for municipalities and municipal politicians. Solutions are often very expensive; more than a small community can afford.

Councils have no direct control over real estate values (a problem compounded by the out-of-control Municipal Property Assessment Corp – MPAC – which raises property values across the province by computer formula, from its ivory tower offices, without conversations with local officials).

Municipalities also lack the legal muscle to demand private-sector development of lower-cost housing and much-needed rental properties like apartments (few young people can afford to buy homes, especially in a community that offers predominantly low wage job opportunities, so a supply of affordable rentals is critical).

On top of that, jurisdiction for affordable housing usually lies with a higher-tier government. In Collingwood’s case, it falls under the authority of Simcoe County. There are already 4,113 social housing units in Simcoe County, including approximately 3,035 rent-geared-to-income units. The County provides rent subsidies to 28 housing providers for 2,878 non-profit units, 60% rent-geared-to-income and 40% market rent. The county has already invested $3.4 million in maintaining its housing assets.

Before we go further, let’s dismiss some emotional – and inaccurate – impressions. Affordable housing doesn’t mean subsidized housing (although subsidized housing is also affordable). It represents a range of housing types. As the Federation of Canadian Municipalities (FCM) defines it, it’s an economic condition:

Affordable housing generally means a housing unit that can be owned or rented by a household with shelter costs that are less than 30 per cent of its gross income.

Last Tuesday, Simcoe County Council heard a presentation on the county’s long-term plan for affordable housing. Given its importance, it’s unfortunate neither of our own council reps were there to hear it.

I, however, had the fortune of being there for what proved an eye opener.
Simcoe County’s first part of its 10-year plan for creating affordable housing will consume $8.6 million. The full plan will create 2,685 units across the county. Some of those will be built by the county as subsidized or supported housing, others will be created in existing buildings through long-term rent subsidies. But the goal is roughly 270 units a year.

That’s ambitious. Unfortunately, the first three-year cycle is already behind and there is an expected shortfall of 395 units.

Twenty-seven hundred units might seem like a lot, but Simcoe County’s Social Housing Department also published the “Centralized Waitlist Report for 2014” that listed all the applications for only rent-geared-to-income housing in the county. That report showed 2,921 requests, up 4.3% over 2013. Of that, there are 504 requests for Collingwood alone (applicants can be on wait lists for more than one municipality).

Keep in mind that this is just one slice of the affordable housing demand: there are other services that work outside the country bureaucracy. Plus they don’t cover families or seniors struggling to afford existing housing while wages remain stagnant (except, of course, for politicians and municipal staff) and taxes and utility bills continue to climb.

The Georgian Bay Housing Resource, for example, listed almost 1,200 individuals on their wait list (including 422 children) by the end of 2013, 632 of whom were in Collingwood. (it also says there were 121 homeless people in Collingwood at the end of 2013!). The site doesn’t have any figures for 2014.

So you can see that local affordable housing will benefit from the county’s program, but will likely still have a local shortfall. Assuming what gets proposed doesn’t walk into the NIMBY wall that has plagued such housing initiatives int he past.

Collingwood has about 17% of the total applicants on the county list – but we’ll be extremely fortunate to get 1% of the proposed units, because the biggest need is in the two larger urban centres: Barrie and Orillia will get priority.

And don’t count on FCM money for affordable housing projects***. According to FCM’s own report on funding such projects,

Since 2005, the bulk of grants have been awarded to smaller communities with populations between 50,000 and 200,000.

Collingwood has less than half the minimum population that FCM even looks at.

Plus, the Canadian Mortgage and Housing Corporation (CMHC), which had provided funding and mortgage support for new home buyers, and funded affordable housing starts across the nation for decades, was closed down by the Harper government. That removed the major federal funding partner from the affordable housing market. Perhaps our new government can restore it, but unless it does, more Canadian families will be pushed out of their affordable housing and forced to find new accommodations, if any exist by then:

…more than half a million affordable housing units sheltering low-income and marginalized Canadians will be cut loose by 2040.

But back to the county. By its own description, a standard unit is 500-600 sq.ft; a bachelor or one-bedroom apartment. County rent subsidies range between $250 and $700 a month.

A check on this housing site shows only seven local one-bedroom apartments, renting for between $600 and $1,100 a month. Only the lowest one states that utilities are additional, but I suspect some others may be similar. Only two bachelor apartments are listed (about $800 each). The total of all housing listed is about 20 units.

County council heard a plan to build 40 more units, probably in Barrie. Depending on whether the county builds them or the project to goes to RFP, the cost will be $8.6 million or $4.8 million. Or put another way $215,000 or $120,000 per unit.

Frankly I was stunned by that cost: it works out to $430 or $358 per sq. ft for county-built units (that includes the cost of acquiring the land). I’m not in construction, but it seems remarkably high for building a small apartment. Shouldn’t there be some efficiencies of scale when building that many?

According to this construction estimator, a 500-sq. ft. bungalow should cost about $55,000 to build, or about $110 a sq. ft. Why would a county project be three or four times that? That certainly deserves close investigation and I suggest county councillors advocate for some less expensive alternatives. Maybe we need to bring in some private-sector developers to explain housing construction costs.

A Canadian builder is offering an energy-efficient alternative (kit) for much less. Their “detached park model offers 850 sq.ft. of living space plus an attached garage” – and costs $85,000 plus shipping. Surely that’s a more efficient alternative.

Affordable housing will cost us money, yes, but there not alternatives that make more fiscal sense. Should we really spend what seems like excessive amounts on small developments when we can achieve more for less?

But we must address the problem, and quickly. If people can’t afford to live here, they won’t be able to work here, won’t raise children here, won’t spend their wages here. As City Lab notes, building affordable housing is a moral choice.

In the 11 years I served on council, after much effort – even with the county’s willing participation – we only managed to get one small apartment building with rents geared to income in several units completed in town. Yet we clearly need more. How can we convince the private sector to partner with us, or even to build more affordable rental units on its own?

I haven’t got any answers, nor have I any current solutions for dealing with housing problems. I’m not on council any more, and lack access to the information and resources. But it’s a problem we clearly have to tackle. We need vocal advocates and champions at the table to work on it, to search for solutions and opportunities.

Sadly, we have none.

~~~~~
* Collingwood’s recent committee-based wishlist (CBSP) has just one item in it about affordable housing, which indicates how low a priority it is to this council: “to review opportunities through the planning and development process to facilitate the construction of housing types that are reasonably priced and provide a range of tenure options.” It also calls for “continued participation with Simcoe County… to implement the 10 year Affordable Housing and Homelessness Prevention Strategy.” (The original text also lacks proper hyphenation and has inappropriate capitalization. Perhaps consultants are not hired for their grammatical skills, either.)

As if the town had any choice in participating, since it cannot, at present, leave the county. In other words, the recommendation is to do nothing, and leave the real work up to someone else.

** In its first few months in office, Collingwood Council unnecessarily (because we had a huge surplus from 2014!) raised property taxes 2.5% – without even reading the whole budget or being allowed by staff to question it. They it raised water rates by 5% for no reason other than staff demanded they do so. And to rub salt into the wound, council gave themselves and staff a pay hike. This tax and utility increase, of course, targets the most vulnerable in our community. A council that had ANY concern about affordable housing, or any concern about those on fixed incomes or low wage earners, would not have raised taxes or utility rates – especially given they knew a hydro hike was coming November 1!

*** Despite council spending $40,000-plus of your tax dollars to get “Senator” Jeffrey on the FCM board so she can jet around the country, it won’t do anything for affordable housing here. It would have been better to put the money into a reserve fund for housing support.

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