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'Slower than a snail's pace' — critic slams federal housing funding
31/12/20
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Dec 30, 2020
The feds tout their commitment to housing investment in B.C., but detailed figures reveal the vast majority of funding — 97.5 per cent — is loans, not grants
While the federal Liberals have touted their government’s “ambitious,” “historic” investments in housing, the NDP critic says new figures reveal how far short the plan is falling, particularly in B.C.
Both sides use different numbers to make their case about whether or not B.C. is getting a fair shake under the National Housing Strategy (NHS), which launched in 2017.
NDP housing critic Jenny Kwan, the MP for Vancouver East, points to recently obtained data showing that of the $1.7 billion in finalized funding from one federal affordable housing program, $1.5 billion — 86 per cent — went to Ontario, with B.C. receiving less than three per cent, a fraction disproportionate to either the province’s population or severity of its housing crisis.
On the other hand, a federal Housing Ministry representative counters that Kwan is only focusing on a single NHS program. If one looks at all the strategy’s programs, B.C. has actually received almost one-quarter of all NHS funding commitments to date across the country, despite the province accounting for 13.5 per cent of Canada’s population.
But when Postmedia News asked the ministry for a breakdown of the $2.43 billion so far committed to B.C., the details aligned with what those on the ground in the province’s affordable housing sector have been saying: most NHS dollars have come as loans — with most going to private, for-profit companies — dwarfing the amount of grant money flowing to non-profits trying to build social housing.
Kwan, frustrated with the publicly available information from the federal Liberals about NHS funding, has been accessing more detailed figures through formal inquiries with the government.
An earlier inquiry by Kwan, as The Vancouver Sun first reported in September, revealed that of the first $1.47 billion in finalized funding from the National Housing Co-Investment Fund (NHCF) only about 0.5 per cent went to B.C. Those revelations in September drew harsh comments, with Vancouver Mayor Kennedy Stewart calling the feds’ housing strategy “a total failure for us in British Columbia.”
The earlier data only covered up until January 2020, so Kwan filed another request as soon as parliament resumed in September seeking updated figures. After the government filled the request, her office shared that data with The Vancouver Sun, and The Sun sent additional requests this month to the ministry for further details.
The new data showed that as of August, B.C. had received less than three per cent of the funds secured so far through finalized agreements through the National Housing Co-Investment Fund.
“It is not nearly enough to address our homelessness and housing crisis,” said Kwan, whose riding includes the homeless encampment in Strathcona Park. “It’s worse than a snail’s pace.
“Some days, I just want to weep, because I look at the crisis in our community … and the lack of action from the federal government. I just don’t feel like they sense the urgency of the situation.”
As one would expect, the feds disagree with the critic’s assessment.
“We recognize how real the need is for safe and affordable housing in British Columbia, and how this is a priority for communities and families across the province,” said Jessica Eritou, a spokeswoman for federal Housing Minister Ahmed Hussen, in an emailed statement. “That’s why we committed nearly a quarter of all available funding so far through our National Housing Strategy to the Province of B.C.”
When asked for a breakdown, the ministry replied that of the $2.43 billion in NHS funds coming to B.C., $2.17 billion — about 88 per cent — was through the Rental Construction Financing Initiative, which provides low-interest loans to encourage rental housing production.
The RCFI has been welcomed by many in B.C., including in local governments, non-profit housing, and in real estate development, who say it promotes construction of badly needed apartment buildings after decades of very little rental housing production contributed to the critically low rental vacancy rates.
But, as a Parliamentary Budget Officer report noted last year, RCFI-financed projects have “more relaxed affordability criteria” compared with those funded by other NHS programs, and the rents “may not be affordable for tenants.”
So, for more deeply affordable homes for lower-income people — a kind of housing desperately needed in many B.C. communities — the National Housing Strategy has the National Housing Co-Investment Fund and the Affordable Housing Innovation Fund. The first program has seen $181 million committed to projects in B.C. ($180 million of which is loans), while the latter accounts for another $73 million to B.C. ($8 million in loans.)
That means that out of that big $2.43 billion total of NHS funds committed to B.C. so far, about $2.37 billion — 97.5 per cent — is loans. Only about $66 million — 2.5 per cent — is contributions.
For the most part, those loans don’t go to non-profits building social housing to house our most vulnerable community members. The data analyzed by Kwan’s office showed that of all the finalized RCFI agreements, 80 per cent went to private or for-profit companies, while 17 per cent went to non-profits, and another 2.5 per cent to municipalities.
Low-interest government loans going to for-profit developers is not necessarily a bad thing if it gets badly needed rental housing built, said B.C. Non-Profit Housing Association CEO Jill Atkey.
But we should be clear about what that RCFI money will, and will not, do.
“For the most part, it’s market rental housing, and I’m not going to be one to dispute the fact that we need that housing. So it’s not a criticism at all,” Atkey said.
But it’s the other programs — the NHCF and AHIF — that are meant to produce that sorely needed affordable housing, and those are the funds flowing much more slowly in B.C. And what relatively little funding has trickled west to B.C. through those programs has been mostly loans, not grants.
Those kinds of direct contributions through grants are the only way the government can expect to produce new housing that’s truly affordable for much of the population, Atkey said, pointing out that’s exactly what the Canadian government successfully did for decades before stopping in the 1990s.
“The low-cost financing is important. But if we want to achieve deeper levels of affordability, there needs to be a significant equity contribution” from the government, Atkey said. “And that’s what we’re not seeing in the National Housing Strategy overall.”
More recently, with homeless numbers spiking in Canada’s big cities amid the COVID-19 pandemic, the federal government announced a new part of the NHS, called the Rapid Housing Initiative, a $1 billion program to address urgent needs of vulnerable populations. But that’s another piece, for another day.
[Top photo: Mid-December scenes from Strathcona Park in Vancouver. The city's homeless crisis has become a political funding controversy between the provincial and federal governments. PHOTO BY NICK PROCAYLO /Postmedia News Files]
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