The Affordable Housing Myth

Let me start with a few basic, uncomfortable truths about housing. It’s a myth that municipal politicians can, without a coordinated and regional approach that includes private developers and upper-tier levels as well as stakeholders and advocates, solve anything related to housing. And even then, it requires the involvement of provincial and sometimes the federal governments (as well as possible funding from them).

Affordable housing is one of the biggest and most challenging issues for municipalities across Canada. A lot of councils (or at least politicians) have jumped onto the bandwagon and waved their hands. After a few pretentious promises, they engage in egregious chest-thumping, navel-gazing, and virtue-signalling, usually accompanied by consultants’ presentations and PowerPoint slides.

But aside from some rare exceptions (like this one in New Brunswick and this one in Kelowna, BC)*, few have accomplished much more than grandstanding. Why? Because nothing a municipality can do will affect wages or pay scales, provincial planning legislation or requirements, affect the number of people moving to Canada and looking for housing, nothing will change rental rates, bank and mortgage interest rates, or lower inflation. And all of those affect housing availability, pricing, demand, and affordability.**

First, no single municipality by itself can or ever has solved the problem of providing enough affordable housing to meet the demand, nor can it. In large part, it’s because individual municipalities have little or no authority over any of the contributing factors that drive housing and its prices. It’s also because few municipalities have the money required to become the developers of housing rather than turning to the private sector. As the two examples (New Brunswick and Kelowna) linked above show, there are possible solutions but they require a collective approach and some serious outside funding.

Unless the municipality itself becomes the builder/developer itself, a municipality simply can’t set the prices for housing or rents. But the recent report to council by NBLC recommends against the town doing just that. And Council nodded. The CAO report noted:

As such, NBLC’s [sic] has recommended that the Town of Collingwood should not become developers or housing operators through the creation of a housing corporation, land trust, or housing cooperative, or becoming landlords because NBLC indicates that is it more efficient and effective for other community partners to deliver these actions, with Town support from the provision of lands, accelerated approvals processes, streamlined land use planning tools, incentives, and assisting with funding applications. This approach eliminates one major consideration that was suggested by stakeholders and gives the Town a clear path forward with focused policy, process and regulatory changes, financial approaches, coordination and advocacy initiatives.

I can’t find anything to indicate any of our head-nodding council challenged this, although many other municipalities in Canada have successfully taken the path to becoming developers and housing operators. And since the recommendations also include selling town-owned lands that might be used for such housing, it’s unclear how “Town support from the provision of lands” will work without any lands to provide.

Staff supported the recommendation to sell our publicly-owned land on Poplar Sideroad as well as on Birch and Ontario Streets instead of using them for something that might benefit others. How very Saunderson-ish of them.

There is no authority to force private, for-profit developers to sell their housing at specific prices. Most municipalities (outside of Toronto, perhaps) don’t even have the authority to tell developers to build specific types of residential structures (like apartment buildings). Even when apartments are built, municipalities cannot dictate the rental prices to the private sector. How can the town guarantee land sold to a private developer will be in the “affordable” category? Even if it is, what’s to stop buyers from flipping it shortly after purchase for a higher price?

And let’s not forget the NIMBY factor. In the mid-2000s, Collingwood Council proposed building a modest, two-storey multi-unit apartment development with rents geared to income in the east end. It was stopped by the outcry of a group of neighbours who protested they didn’t want “those people” living near them. Enough councillors caved in to that pressure and voted against the plan that it died. Imagine the fuss if apartment blocks were proposed adjacent to our existing suburbs.

Second, no small municipality like Collingwood can afford to do more than make a symbolic gesture toward a solution. No matter how many consultants council hires, no matter how many graphs and charts they present, these won’t fix problems like affordability, homelessness or dwindling rental stock. The problems won’t go away by making PowerPoint presentations. And it certainly won’t be helped by approving a 24-storey millionaire-playground waterfront development like this council approved for the terminals. Nothing says affordability like $3 million-plus condos.

In Collingwood, the responsibility for social (aka low-income) housing rests with Simcoe County. Collingwood can and has worked with the county’s existing programs and plans to develop social and rent-geared-to-income housing, but we need more. However, Collingwood’s 1950s-ish pro-vehicle/anti-public-transit planning policies encourage sprawl that only sees more single-family homes with higher housing prices and vehicle-dependent subdivisions. NIMBY fights against social housing in or near these suburbs would tie up such development for years.

And the consultant’s report basically says to ignore low-income earners like the many people working here in retail, hospitality, and restaurants. Page 37:

As per the Town’s direction, the AHMP focuses on the housing needs of moderate-income households (i.e., those in the 4th to 6th income deciles). It is understood that low-income housing is the responsibility of Simcoe County as Service Manager…

In other words: fuck the poor. (I wonder if any member of our council or administrative staff has ever spoken to a homeless person here about their circumstances, has ever visited one of the tent cities and spoken to the residents. I doubt it… ). Let me give you one example of the sort of word salad in the report (from page 83) that makes it tough to follow:

The above definitions will allow the Town to incent a wide variety of outcomes, including affordable ownership non-profit groups such as Habitat for Humanity, Options for Homes, Trillium Housing, and others. While 140% of AMR is the current benchmark affordable to groups in the 6th income decile in Collingwood, including a higher benchmark in the overarching MCFB will allow the Town to incentivize market-rate rental as well as mixed-income projects, if desired.

Got that? Neither, I suspect, did most of our council when confronted with a 360-page agenda to read in a short time (more than 200 pages of which were the consultant’s report, plus more from staff and the task force). Such a large and dense document might challenge anyone’s attention span. Where are Strunk and White when you need them?

AMR is “Average Market Rent” and MCFB is a “Municipal Capital Facility By-Law.” This latter is described as,

…almost identical to a Community Improvement Plan (CIP) but has additional flexibility and is easier to implement. Many communities have been using a MCFB over a CIP for this reason, and there are no identified challenges of using a MCFB over a CIP. A MCFB allows both the Town and the County to offer a range of incentives to the private and non-profit development community in exchange for affordable housing.

One wonders how many councillors’ heads were spinning when reading that.

Third: simply throwing money at the problem isn’t a solution, it’s too often just a drain on resources while the problems continue. How many people has our council lifted out of shelters and into their own homes or apartments with the money they’ve already spent? How many homeless people has it helped find affordable accommodations? Has it saved even one renter from being evicted here? Has it given a single family an affordable home? Or does it just go to studies, consultants, reports, and conferences?***

The recommendation in the most recent housing report came with a hefty price tag to taxpayers of $3 million per year. I suppose had previous councils not supported Saunderson’s Vindictive Judicial Inquiry and wasted more than $10 million of our tax dollars on his personal vendetta, we might have had the money to fund all those recommendations for at least three years. Doing everything recommended would mean at least an 8% hike in property taxes. And it would still do nothing for low-income earners.

The recommendations include spending $10,000 to “Fast Track Key Zoning By-Law Amendments.” One has to wonder why reducing red tape would cost us more. But then, the similar red-tape reduction action “Work Towards a Decision Faster (Shorten Approvals Timelines)” aka asking staff to work more efficiently will cost taxpayers $40,000.

And “shift[ing] the Public Discourse Around Growth, Density, and Affordable Housing Through a Public Education Campaign” (in other words having an actual communications policy) will cost taxpayers $25,000. One wonders what our tax dollars already spent for communications are doing if we need to spend a lot more for an anti-NIMBY campaign.

Spend, spend, spend.

But the biggest cost to taxpayers in these recommendations is to “Expand Rapid ADU Program to Include More Options” for a hefty $212,572.40. In other words, to rid us of the red tape and glacial processes that currently delay approvals for Accessory Dwelling Units (ADU) will cost taxpayers more than $200,000. If it only took money to make town hall more efficient, this would be good for everyone, but how does it work? Are they paying people to work faster? Pay more to get staff to do their jobs on time? Who gets that money is unclear, but it certainly doesn’t go to solving homelessness.

Why couldn’t the CAO simply say to staff “make it so” and end the red tape without such a cost? Isn’t that the CAO’s job? Underneath this recommendation is the suggestion that our town staff are inefficient and slow. Not a very flattering

Any council spending should be accompanied by measurables so taxpayers can see what they are getting for their money. For example: how many people has this money lifted out of homelessness? How many people has it given an affordable home or apartment? How many people has it helped pay their rent or mortgage? How many people has it housed? We have people living in tent cities and sleeping rough downtown. Has the money council allocated helped any of them find housing? Has it built homes? Apartments? Shelters?

If no, where did it go? Spending money without concrete measurables to assess its success is just throwing it away.

(Simcoe County’s data portal indicates our emergency shelter has a capacity of just ten people but the County of Simcoe recently announced a funding increase; whether that means more beds here was not disclosed).

Homelessness also means poverty. The town could easily use that money to create a part-time, temporary work program so homeless people or those facing accommodation problems could get some money to help alleviate their poverty. After all, the town pays well ($50,000 for a part-time assistant to council!).

But, according to the town’s affordable housing master plan, as reported in CwoodToday, there’s nothing planned to deal with homelessness:

The town’s affordable housing master plan will focus on the housing needs of moderate-income households, which is defined in Collingwood as between $36,000 and $51,000 for renters and $70,000 and $98,000 for homeowners.

That story was published back in August. By November (see page 38 of the agenda package), that income group had risen to roughly $74,000-$110,000 for ownership and $48,000-$68,000 for renters. Even for a $110,000 income family, the affordable home price is $367,000, and for renters bringing in $68,000 a year, affordable monthly rent is $1,700. Try to find either houses or apartments at those prices here. The report bluntly says it (emphasis added):

There are next to no options in the market for moderate income households in both ownership and rental tenures… Many households, and particularly first-be time home buyers, would [be] challenged to buy a new or resale home in the Collingwood market today.

Challenged to find something non-existent in our local market. That’s more like fantasy than a challenge.

Fourth: building more detached, single-family dwellings that the average working person (as noted above) can’t afford isn’t a solution: it merely exacerbates the problem, especially when the homes are in car-dependent suburbs.

Not everyone wants, let alone can afford, their own home. Many more rental units are needed; apartment complexes with rent-geared-to-income, not just a handful of add-on units in backyards or basements. They need to be close to dependable, regular public transit (yes, I know: our council is trying to kill our public transit service when it is needed most).

According to real estate websites, the median list price for a home here is $767,000 (the median selling price is currently $749,000 but that changes with market forces and can rise above the listing price). However, detached homes are selling for much more (emphasis added):

Detached houses for sale in Collingwood make up 44% of listings and sell for a median price of $992,000. Collingwood condos are 44% of the real estate currently for sale and sell for a median price of $620,000. The remaining 12% are townhouses, which sell for a median price of $700,000.

This means people need a significant downpayment to own a home here, and then get saddled with a large mortgage for the rest. Properties valued at less than $500,000 require at least a 5% down payment ($25,000). Properties valued between $500,000 and $1 million require a 10% down payment for the remaining portion of the house price higher than $500K (so a $1 million home requires $75,000). Properties valued over $1 million require a 20% down payment. And a lot of detached homes in Collingwood are listed above $1 million. On top of that, buyers need to buy mortgage loan insurance, which ranges from 0.6% to 4.5% of the mortgage total.

Assuming a detached home selling for $1 million with a 20% down payment and 6.14% mortgage interest, the monthly payment would be $6,393. Plus a land-transfer tax of $12,475 for first-time buyers, or $16,475 for those with previous house purchases. And for that, you’d need $219,175 to close the deal; then face those monthly payments. How many people have that cash on hand? People working in local service, hospitality, and retail work can’t afford it. Even if the house is selling for $750,000, they need $66,664 cash to close the deal and face monthly payments of $5,438. Plus add in vehicle costs, utilities, internet, food, etc.

Someone making minimum wage in Ontario (working 35 hours/week, $16.55/hr) would make about $30,121 a year, but bring home $2,088.39 a month, less than half required for median home ownership here. Median rental price for a one-bedroom apartment here is $1,820. A two-bedroom apartment is (median) more than $2,000.

The CAO’s report on the consultant’s report (a report about the report, but isn’t redundancy what we pay tax dollars for?) notes that a family making $73,999 – $109,341 can afford a purchase price of $248,173 – $366,704. Which is basically an empty lot. And a family earning $47,712 – $68,034 can afford a monthly rent of $1,193 –
$1,701. Which means living in another town. Excuse me if I look upon the CAO’s contribution as mostly diaphanous piffle.

Fifth: Since 2019, the cost of construction has skyrocketed 50-70% per sq. ft. (see page 52 here; yes it’s in antiquated imperial measurements, but that’s town hall for you!). But no matter what lies Pierre PoiLIEvre tells you (and he tells so many!), the high cost of homes is not due to Trudeau or the federal government, but rather to a combination of forces: rising supply costs, construction workers’ wages, inflation, hefty municipal fees and charges, land (lot) costs, servicing (infrastructure) costs, rising utility and fuel costs, corporate greed, the pandemic, and market demand.

Adding more houses also means adding more police and fire services; building more infrastructure (roads, water, electricity, phone, internet); increased snowplowing for roads and sidewalks; more demands for public transit (a service this pro-private-vehicle council is eagerly trying to kill); more demands for local healthcare and hospital access; more demands on local schools, parks, library, and recreation facilities; these are additional costs to the municipality and local facilities. Which means your property taxes rise to pay for them. That affects affordability, too.

Plus the additional vehicles our pro-driver council and planning staff love to see on our roads mean more traffic, more noise, more pollution, more wear and tear on our infrastructure, but less safety, and lower quality of living.

Six: short-term rentals like those offered by companies like Airbnb take properties out of the housing market and drive up demand (and rents) on the remaining few. They are part of the problem and should be restricted to only the owner’s primary residence (i.e. the owner has to live in the building while it is being rented).

Seven: the previous council under Mayor Brian Saunderson considerably exacerbated our local housing problem by abruptly and without any consultation with the public, developers, builders or other stakeholders, passing a sky-is-falling Interim Control Bylaw (ICBL) that killed all construction in Collingwood last term. Well, except for the town building a water-consuming splash pad on top of a dump site when house construction was stopped, but that’s another issue. Council created a “water supply crisis” through its own inabilities and refusal to heed staff reports. But saying Saunderson’s mayorship was an unmitigated shitshow for Collingwood is like saying water is wet. And we’re still  feeling the results today.

This doesn’t mean I think the town shouldn’t do anything, but rather should do what can actually affect people’s lives, actually make a difference, actually provide housing. Something practical instead of just paying more consultants. Our tax dollars should go to something that can be shown to make a measurable difference.  Until then, I don’t think councillors should crow about their spending as if it were an actual success.****

Collingwood deserves better.

Some of my previous posts on housing:

• Ten points on affordable housing
• Council Fails Our Affordable Housing Residents
• The high cost of affordability
• The Worst Plan for the Terminals

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* Tiny homes like those being developed or explored in progressive municipalities all across North America, have proven to offer at least partial solutions to housing issues in many communities. However, and not surprisingly, they aren’t even on Collingwood’s radar. No one on council appears to be an advocate for them, either. But the town could use those properties it wants to sell and build a community of tiny homes on them.

** There are some things a municipality can change that can help affordability, however. These include lowering property tax rates for certain kinds of housing, like tiny homes, social housing, and apartment buildings, reducing utility rates for electricity and water for these buildings (the former is not possible in Collingwood because Brian Saunderson and his cabal secretly privatized our electricity utility to a for-profit corporation), reducing or eliminating development fees, inspection fees, permit fees for certain types of housing. In Collingwood, development fees for a detached home are just shy of $41,000, plus another $7,500 if you plan to build pretty much anywhere west of High Street. Add on top of that the cost of the lot ($265,000 and up), building permit fees (still calculated in the antiquated imperial measurements here, despite Canada using the metric system since 1975). None of these reductions in costs were included in the recommendations of the town’s Affordable Housing Task Force report in Nov. 2021 nor were they included in the staff report recommendations for housing made to Council on Oct. 30, 2023.

*** Why TF did the town send a town councillor and two members of our executive staff to Ghana this year? And how has that benefitted local taxpayers? Don’t get me started on the sense of entitlement at the public trough… But I digress. PRC director Dean Collver made a presentation to council about homelessness in June, but I can’t find anything to indicate council has done anything to alleviate the problem. Maybe they just waved their hands.

**** According to a story in CwoodToday, a Third Street house was left to the town, Home Horizon and Habitat for Humanity South Georgian Bay, intended to be used to help homelessness here. However, it was sold, will be demolished, and the money from the sale is tied up in court. While the CAO told Cwood today that any money it gets “the town intends to add it to the affordable housing reserve” there is no indication how or even if it will be used to help homelessness as the owner’s will requested (minus, of course, the legal expenses). Or is that part just being ignored? Methinks it will probably be spent on another consultant’s report. Whoopee: more PowerPoint slides! I would have hoped the town would be less greedy, more considerate, and donated its share to these two organizations to help them create a new housing project, and paid the legal expenses for everyone, too. Silly me.