Increased homelessness, rapidly rising rents and extreme shortages of purpose-built rental housing are creating a crisis for many Canadians, especially young people, seniors, Indigenous peoples, single parent households, newcomers, students, people on low incomes and those who are homeless.
In 2020, Ottawa’s City Council declared a housing and homelessness emergency and in November 2023, again warned of a homelessness crisis just before the onset of winter. In September 2023, the Canada Mortgage and Housing Corporation estimated the country needs to build 5.8 million housing units by the end of 2030 – 3.5 million more than the current pace of new home construction.
The federal government’s economic statement last fall also recognized the urgency of actions on housing with Chapter One outlining proposals to accelerate construction of new rental housing and calling on provinces, territories, and municipalities to do everything possible to build more homes faster.
Solutions have been proposed. In August 2023, a group of housing experts from the private and non-profit sectors, including investors, developers, owners, and policy experts met together to develop solutions to restore rental housing affordability. Their report, The National Housing Accord: A Multi-Sector Approach to Ending Canada’s Rental Housing Crisis (https://www.nationalhousingaccord.ca) contains 10 recommendations to close the gap on affordable housing.
The Diocese’s Housing and Homelessness Working Group has endorsed the National Housing Accord. We spoke with Graeme Hussey, Cahdco’s executive director who has worked on several affordable housing initiatives of the Diocese, to pinpoint how some of these recommendations would help meet affordable housing objectives.
Fund deeply affordable housing
Recommendation One of the Accord includes the need to “fund deeply affordable housing, co-operative housing and supportive housing, along with seniors housing and student residences and double the relative share of non-market community housing”. The Diocese has benefited from federal capital funding for several of its housing projects and currently has an upcoming development, Ellwood House, that could immediately benefit from additional federal funding.
Ellwood House is an existing non-profit housing organization affiliated with the Church of St. Thomas the Apostle, proposing to build a three and a half storey extension to the current building, located on Braeside Avenue on the site of the former St. Thomas rectory.
The plan proposes 38 one-bedroom units, six barrier-free and the rest fully visitable. Ellwood House is on the priority list for City of Ottawa investment but will need capital funding of $12.5 million from federal, provincial or municipal governments for the project to be viable.
Eliminate GST/HST on rental housing
Recommendation Three of the Accord is for the federal government to reform CMHC fees and the federal tax system “including changes to capital cost provisions and eliminating the GST/HST on purpose-built rental housing.”
The federal government introduced legislation in September 2023 to increase the GST rental rebate on new purpose-built rental housing from the current 36% to 100% with no phase-out thresholds and no limits on the amount of the rebate. Ontario announced in November it was removing the full provincial portion of the Harmonized Sales Tax on new rental housing developments as well.
While these changes come too late for many of the Diocese’s affordable housing developments, they would have made a dent in making our projects more affordable. For example, Hollyer House, affiliated with Christ Church Bells Corners is a new four-storey, 35-unit mixed use apartment building in Ottawa’s west end. It features a mix of units and rental affordability options with a focus on supportive housing for women and families. It will open its doors in early 2024 and continues to face a gap in funding. Hollyer House would have benefited by a saving of $525,000 if the GST/HST changes had been in place last year.
Low-cost, long-term fixed-rate financing
Recommendation Four of the Accord calls for the government to provide “low-cost, long-term fixed-rate financing for constructing purpose-built rental housing, as well as financing to upgrade existing purpose-built rentals to make them more accessible, climate-friendly and energy efficient”.
Cornerstone’s emergency shelter for women is in urgent need of redesign to move towards a greater focus on supportive housing and to meet accessibility and energy efficiency objectives. Should Cornerstone seek conventional financing for a redesign or upgrade, the organization would be looking at an interest rate of 7%, most likely with a 5-year term and a 25-year amortization. With CMHC financing, interest rates could drop to as low as 4%, with a 10-year fixed term and a 50-year amortization period. For a mortgage cost of $20 million, such as supportive housing for Cornerstone, this would mean a reduction in yearly operating costs of $775,000, or 45% less, making the project a much more viable prospect.
Property acquisition for residential conversions
The Accord’s Recommendation Eight proposes the creation of property acquisition programs to support non-profit housing providers in converting existing facilities to new rental housing. “These programs could include capital grants, provision of pre-approved debt financing, funds that provide secondary debt and equity financing or other innovative levers”.
Cornerstone’s project at 44 Eccles Street is a prime example of the type of project that could benefit from the proposed property acquisition program. The building is an existing 4-storey office and former school which will be retrofitted into studio apartments. The 46 new affordable residential units will include 30% of the units dedicated to Indigenous Peoples.
Photo: Leigh Anne Williams
Cornerstone has received funding for the project from the Federal Government’s Rapid Housing Initiative and additional funding will be provided by the Provincial Government and the City. One coordinated Property Acquisition Program would allow non-profits such as Cornerstone to acquire existing market housing and preserve affordability over time. Currently, CMHC programs promote new construction rather than acquisition and non-profits need to buy the building before they can access support from CMHC.
A multi-sector approach
Canada’s housing crisis cannot be solved only by the private sector, by the non-profit sector, by any one level of government, or by the generosity of faith communities and civil society. A coordinated, comprehensive approach drawing on the assets of each sector is the most promising way ahead. The Diocese would benefit from a multi-sector approach and could continue to make a meaningful difference in the lives of many.
Qu’est-ce que le bonheur?