Real Estate

'Bold' housing strategy still untested: Duensing

By Mia Clarke, Associate Editor

The federal government’s National Housing Strategy may be ambitious, but it remains to be seen whether it will be successful, Toronto real estate lawyer Matthias Duensing writes in The Lawyer’s Daily.

Duensing, principal of Duensing Law, says the plan is “more aggressive and proactive” than previous attempts by other governments and that “may bode well for this bold plan."

In November 2017, the federal government announced the National Housing Strategy and pledged $40 billion to be shared between the federal, provincial and territorial governments over a 10-year period.

Duensing tells the online legal publication that the strategy “targets the national housing needs of the most vulnerable sectors” and aims to:

  • Create or repair approximately 7,000 shelter spaces for survivors of domestic violence.
  • Create 60,000 new affordable housing units for families in need, including 12,000 units for seniors and 2,400 for persons with disabilities.
  • Make repairs to 240,000 existing units.
  • Eliminate chronic homelessness by 50 per cent.
  • Remove 530,000 households from needing affordable housing.

Duensing says the plan also “includes the provision of low-interest loans to housing developers on the condition that the developers agree to offer 30 per cent of the units as affordable housing units, 20 per cent of the units be created to meet accessibility standards, and that the building meets specific greenhouse gas emissions and energy consumption standards.”

The government also promised a $4 billion investment in a new Canada Housing Benefit — to be shared between the federal, provincial and territorial governments. The goal is to provide 300,000 families with an annual rent subsidy of $2,500 from 2020 to 2028 — beginning after the next election, Duensing points out.

He says according to the 2016 census, 1.7 million families spend more than a third of their income on housing that doesn’t meet their needs. He also says one in five Ontarians in rental housing spend half of their income on rent, according to the Daily Bread Food Bank.

“Criticisms of the strategy include the lack of a plan to address entry into the housing market for the middle class, especially in large urban areas," Duensing writes. It also doesn't directly address soaring rental market pressures created by short-term rental units offered through online platforms, he adds.

“Interestingly, the National Housing Strategy announcement intersected closely with the introduction of new mortgage rules announced by the Office of the Superintendent of Financial Institutions Canada (OSFI) in October 2017, which will require a new minimum qualifying rate, or ‘stress test,’ of the five-year benchmark rate of the Bank of Canada or the contractual mortgage rate, plus two per cent, for uninsured mortgages, including for uninsured mortgages with a down payment over the previous 20 per cent threshold.”

He says it remains to be seen whether the housing strategy considered how changing mortgage rules may affect families’ reliance on affordable housing.

“Further, while the strategy has ambitious goals, whether a national, cost-sharing plan can be effectively implemented is questionable,” Duensing says in his article.

“Previous federal governments have attempted to create co-ordinated strategies that engage provincial and municipal governments in housing policy. However, the lack of provincial and municipal ‘buy-in’ has been a key impediment to policy success,” he writes.

“In large part, this has been due to the federal government’s reluctance to create a policy framework that includes a guarantee of long-term funding arrangements, and which also provides provincial and municipal governments with a high degree of policy autonomy — in other words, federal funding with ‘no strings attached.’”

Duensing says many are skeptical because of previous failed initiatives.

While the Chretien government’s Caucus Task Force on Urban Issues, and the Martin government’s New Deal for Cities both spoke to the need for increased federal intervention and spending on housing policy, they ultimately accomplished very little,” he says.

“Rather, the lack of progress underscored the sentiment that the federal government could not be relied upon to be a credible partner. This perspective was reinforced by the Harper government’s position that the provision of public housing was not a core federal concern.

“The Trudeau government has however been more aggressive and proactive in including multiple stakeholders, which may bode well for this bold plan.”

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