Comments on Bill C-304
General Support for a National Housing Strategy
CFAA believes that a healthy rental housing market contributes greatly to Canada’s national wellbeing and economic prosperity. CFAA believes that the policies we advocate will benefit landlords, tenants, and taxpayers. We believe that landlords, tenants and taxpayers have a common interest in free rental markets, in fair taxation of residential rental property, in high industry standards for customer service, and in housing assistance that supports tenants’ rights to choose their housing and
to move when and if they please.
CFAA is in favour of the creation of a national housing strategy. Getting all interested parties around the table to develop a National Housing Strategy that helps to establish means to provide adequate housing to all Canadians would be a fine endeavour, but CFAA would hope that those discussions would include how to make rental housing more affordable through tax policy changes, and more attractive through removing long standing biases which favour home-ownership over rental housing.
A national housing strategy must fit well as part of a broader poverty reduction strategy. In particular,the national housing strategy should include a universal entitlement to a portable housing allowance.
CFAA supports providing financial assistance for those who are otherwise unable to afford rental housing, so that they can choose the appropriate housing for themselves whether that be in the private rental market, in the co-operative housing environment, or in a not-for-profit building.
Problems with Bill C-304
CFAA is not in favour of a prescriptive Housing Strategy. We support making federal housing funding more flexible. For instance, we believe that Provinces ought to be permitted to use federal affordable
housing money for portable housing allowance programs to address affordability issues. CFAA believes that portable housing allowances best allow dignity and choice to low income tenants, and
should be an option available for policy makers across Canada, or better yet should be a federal provincial program everywhere across Canada.
Bill C-304 appears to intend to place a particular vision for a housing strategy that may not be optimal for all communities throughout the country. For instance, paragraph (a) of subsection 3(3) requires
that the housing strategy ensure the availability of housing that is not-for-profit in the case of those who cannot otherwise afford it. Whether the housing provider is for-profit or not-for-profit should not
necessarily have any effect of the housing consumer. The Bill appears to assume that non-profit housing is a superior model to provide housing for low-income households; we disagree and point out
that portable housing allowances are often a far superior tool to assist those with low incomes.
As a further example, paragraph (f) of subsection 3(3) of the Bill mandates that the strategy ensures the availability of housing that includes, among others, mixed income not-for-profit housing cooperatives.
While mixed income not-for-profit housing co-operatives may be an important component in some communities, passing a federal Bill requiring the national housing strategy to ensure their presence in all communities is not optimal.
CFAA supports the provision of operating funding for housing for special needs that are not met by the private sector (e.g. supportive housing for the disabled, the homeless and seniors with special needs,
or social service supports in ordinary housing for those who need them), and focusing government funding for building new housing for special needs. CFAA believes that serving the needs of those
with mental or physical disabilities is the right thing to do morally, and also for the betterment of public policy around rental housing. But CFAA is not in favour of imposing priorities throughout the country
as set out in subsection 3(4) of the Bill. That subsection mandates that the national housing policy 3 shall ensure priority be given to
(a) those who have not had secure housing over an extended period;
(b) those with special housing requirement because of family status or size or because of a mental or physical disability; and
(c) those who have been denied housing as a result of discrimination. But the
Bill appears to preclude Provinces and communities from choosing to give priority to refugee claimants, or women fleeing domestic abuse, or the chronically ill, or others.
Finally, CFAA questions the appropriateness of defining ‘affordable housing’ as “housing that is available at a cost that does not compromise an individual’s ability to meet other basic needs,
including food, clothing and access to education.” The definition ought to consider the ability of a “household”, rather than an “individual”, to meet their basic needs.
CFAA recommends that more accurate and appropriate measures of housing affordability be developed. In particular, promoting
a) a revision of the 30% standard for affordability to recognize that one and two person households can generally afford to pay somewhat more than 30% of income for housing1; and
b) measures which look at housing affordability across the whole population, not merely rental households, since reduced relative rents lead to increased household formation, and increased
incomes lead people to buy homes, or to rent apartmentsby themselves instead of sharing, and those affordability improvements are not reflected in a measure which looks only at the average rent-to income
ratio of rental households.
Recommendations for a viable housing strategy
CFAA recognizes that governments’ view of “housing” is broader than shelter. It includes services and supports to enable Canadians to live in their communities. A viable housing strategy must recognize
the respective roles of housing providers and social service agencies in meeting the needs of lowincome or disadvantaged Canadians. When people choose to become landlords they do not agree
also to become an arm of the social service agencies. The obligations to address peoples’ needs are properly on government or on voluntary charities; they do not rest on private landlords either because
we are providing housing or for any other reason.
For many years in Canada, public policies at all levels of government have promoted homeownership. Those policies include explicit incentives for homeownership and several benefits under the income
tax system which accrue to many homeowners. However, most low-income Canadians are not homeowners, and the larger part of the income tax benefits of homeownership do not accrue to low income
households even if they are homeowners.
By contrast, between 1970 and 1990 the tax treatment of rental housing was made steadily worse. The current tax position means that Canada’s housing markets are not providing the housing opportunities in the rental sector needed by households with low and moderate incomes that they could be.
In addition, a viable and effective housing strategy ought to include the follow provisions:
1. The national housing strategy should include a universal entitlement to a portable housing allowance for households that cannot otherwise afford rental housing.
a. Such a nation-wide portable housing allowance could be delivered by the provinces in co-ordination similarly to the co-ordination among medicare plans, or it could be delivered by the federal government.
b. It is important that the housing allowance itself be fully portable within provinces and between provinces. Only in that way will the housing program promote labour mobility and improve the economic situation of beneficiaries.
c. A portable housing allowance program respects the dignity of recipients by allowing them choice and avoiding stigmas and discriminatory waiting lists.
In that regard CFAA
1 As a hypothetical example, a single person with an income of $1,000 per month paying $300 for rent has $700 left for other expenditures. A family of four with an income of $1,000 per month paying $300 for rent has only $175 per person left for other expenditures. The family is obviously much worse off than the single person, but the current across-the-board 30% housing affordability standard does not reflect that in
CFAA stands with the Centre for Equality Rights in Accommodation (CERA) and other housing advocates in promoting a nation-wide portable housing allowance system as a key part of a national housing strategy.
d. Portable housing allowance programs support the private rental market and tend to attract private capital, rather than undercutting the private rental market and crowding out private investment.
e. Among economically advanced nations there is nearly universal acceptance of housing allowance programs including Australia, Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Ireland, Netherlands, New Zealand, Norway, Sweden, Switzerland, United Kingdom and United States.
f. A particular portable housing allowance which CFAA supports is the Housing Benefit proposed by a group consisting of the Ontario Non-Profit Housing Association, the Daily Bread Food Bank, two of CFAA’s member associations and the Atkins and Metcalf Foundations. Because of the moral hazard, appropriate trade offs need to be made in order to avoid welfare traps and to maintain cost-effectiveness. The Housing
Benefit proposal addresses those concerns, as do other well designed housing allowance programs.
2. The strategy must recognize that drawing private capital into the rental market is a very positive attribute of public policy, and that what is needed in order to do that is a rebalancing of the tax system so that the tax treatment of tenants and rental housing is improved to come closer to the favourable tax treatment provided to owner-occupiers.
3. The strategy should focus new construction subsidies on special needs housing to address accessibility needs, since such needs are a growing issue and it is very expensive to retrofit existing housing to universal accessible standards.
4. The strategy should recognize that existing social housing will address the greatest needs if much of it is gradually converted to supportive housing or special needs housing, since substantial supports can often best be delivered in a supportive housing environment, while the private market is less well suited to the broad delivery of various supports.
CFAA promotes a cost-effective national housing strategy to be adopted which respects the rights, expectations and interests of:
Private rental housing providers;
People with temporary affordability problems;
People with permanent affordability problems; and
People with special needs and support needs.
Canadian Federation of Apartments Associations
1600 Carling Ave., Suite 640
Ottawa, Ontario K1Z 1G3
Tel: 613-235-0101 Fax: 613-238-0101
The Canadian Federation of Apartment Associations (“CFAA”) is the national voice of Canada’s
private residential rental sector, advocating the interests of the industry to the Government of Canada.
We represent the owners and managers of close to one million residential rental suites in Canada,
through 17 landlord associations across the country.