The wait time for affordable housing in Mississauga is embarrassing. Can all three levels of government, working together, solve it? No, they can’t. Not according to this writer’s opinion. Words by Phil Green
It takes 15 years to get one. When it’s your turn you are told to ‘take it or leave it’. If you are fussy you get nothing and go back to the beginning of the line-up. No shopping. No picking or choosing. It is so important you have one that there are agencies at all levels of government striving to make sure that it is affordable. What is it? Housing.
Of the three basic necessities of life; food, clothing and shelter; it is only the provision of shelter to the poor that is government owned and operated, and that produces such an intolerable outcome. There are no government-owned grocery stores or clothing stores. Would anybody be surprised if there were waiting lists for food and clothing if the stores that sold them were run by the government?
In Mississauga, Peel Living is the public agency that owns and rents about 7,000 social housing units across the region. Their website says “Applicants currently on the waiting list can expect to wait an average of 10 – 15 years” for a social housing unit. The agency should be called Peel Waiting. Now medical waiting lists seem swift in comparison.
Typically the terms “affordable housing” and “social housing” mean government-owned housing. These disingenuous terms are hard to object to, as if the only alternatives were unaffordable or anti-social housing. According to Janet Menard, Commissioner of Human Services at the Region of Peel, the department that runs Peel Living, the “Region of Peel continues to be active in advocating to senior levels of government for more affordable housing program funding.” But to wipe out a 15 year waiting list, we would have to put an ever increasing segment of society in government housing.
There are better ways to help the needy find housing. The first is housing vouchers, also called allowances. They help low-income families offset the cost of renting private apartments. They are like food stamps for apartments.
Menard concedes that vouchers could cost less to administer. The Center on Budget and Policy Priorities, a Washington DC think-tank, found in Baltimore a decline in welfare and an increase in employment amongst low- income families that were given vouchers to move out of government housing and into private rental apartments. Vouchers not only make private rental housing more affordable, they make it possible to live close to jobs and families. Currently if someone is finally offered a unit from Peel Living, but refuse it because it is located too far from their work, they lose it.
Rather than intolerably long waiting lists and public ownership of thousands of rental units, Peel Living, with some federal and provincial help, should provide vouchers directly to people in need of affordable housing. These vouchers would apply to any apartment in the Region. The vouchers would pay the property tax portion of the rent, or, in some cases, more.
Peel Living is already doing something similar on a small scale. Under its Rent Supplement Program, it manages subsidy agreements with private landlords. Already there are close to 1,500 rental units financed this way. Next year it will introduce a similar program called “Short Term Rent Support” with help from the province. We could replace these with vouchers and expand both programs. Brad Butt, President of the Greater Toronto Apartment Association, says that housing allowances “are the most efficient and effective way of providing affordable housing immediately.”
The second thing we should do is introduce a flat property tax. Currently tenants of apartments pay higher property taxes than owners of their own dwellings. It is a perversion of the notion of progressive taxation in which the poor pay more than the rich. And it makes rental accommodation more expensive. Renters do not see the property tax they pay in their monthly rent, so it is easy for politicians to get away with taxing them so highly.
Margaret Herd is Vice President of Residential Property Management at Park Property Management, which owns 67 rental buildings in Ontario and three in Mississauga. According to Herd, property taxes make up about 12% of a typical tenant’s rental bill in Mississauga. For an apartment with a monthly rental of $800, that’s about $1,200 per year in property tax. If apartments were taxed at the same rate as single family homes the tax on that apartment would drop to $800 per year. That extra $400 would help make housing more affordable, and would pay for groceries or winter boots for the kids. (It’s worse in some cities. In Stratford tenants pay 21% of their rent in tax, or about $2,000/year on an apartment that rents for $800.)
Butt says there “is no question that the high property tax rate on rental apartments in Peel contributes to affordability problems. Tenants should not pay a higher tax rate than homeowners because their average household income is much lower.” In 2010 the Region of Peel agreed with the need to lower taxes, but wants to reform the tax treatment of rental housing at the federal level, in particular the Capital Cost Allowance, deductions of soft costs, and “designation of rental housing as a Passive Investment, in order to encourage rental housing investment by the private sector.”
Peel Living also pays property taxes. About 40% of Peel Living’s revenue comes from government grants. About $10 million of this money, Peel Living’s second largest cash expenditure, goes to pay municipal taxes. Social housing is thus, in part, a mechanism for transferring money from the federal and provincial governments to city treasuries.
The third thing we should do is sell off Peel Living’s 7,000 housing units, keeping only enough for emergency short term shelter for the most vulnerable. Peel Living currently has $371 million in property holdings, recorded at original cost. Depending on when the buildings were purchased imagine how much more they would be worth today. The proceeds of their sale could be used to finance the voucher program. This would gradually increase both the demand and supply for privately-owned owned and managed apartments, apartments that would by then be “affordable” and readily available.
Moving to make more affordable housing available immediately, the Provincial government has proposed the expansion of allowable accommodations in current homes. Working its way through the legislature is the recently introduced Strong Communities Through Affordable Housing Act which will require municipalities to allow for secondary suites where desired in both new and existing communities. By re-purposing existing structures, overbuilt for the existing users, it provides the least expensive, most efficient solution. For many seniors, this option could be a necessary income supplement to fixed pensions. Finally, the social mixing of incomes can make for a strong community. However, there is no doubt that this will draw questions and concerns from some existing residents because eventually, a neighbour opposed to a basement apartment being part of a nearby home won’t be able to go beyond the municipality to appeal it.