4. HOUSING
NEEDS IN OTTAWA LE BESOIN DU
LOGEMENT SOCIAL EN OTTAWA |
That Council receive this report and approve
that it be forwarded to the Minister of Municipal Affairs and Housing as the
City of Ottawa’s request for funding for the next 3 years to address housing
needs in Ottawa.
Recommandation du comité
Que le
Conseil municipal prenne connaissance du présent rapport et de permettre qu’il
soit acheminé au ministre des Affaires municipales et du Logement dans le cadre
d’une demande de financement de la Ville d’Ottawa pour les trois prochaines
années visant à répondre aux besoins en matière de logement.
DOCUMENTATION
1.
Deputy City Manager report dated 7 June 2007 (ACS2007-CPS-HOU-0009).
2. Extract of Draft Minute, 21 June 2007
Community
and Protective Services Committee
Comité des services communautaires et de
protection
and Council / et au Conseil
07
June 2007 / le 07 juinJun
2007
Submitted
by/Soumis par: Steve Kanellakos, Deputy City Manager/Directeur
municipal adjoint,
Community and Protective Services/Services communautaires et de
protection
Contact Person/Personne ressource :
Russell Mawby,
Director, Housing/Logement
(613) 580-2424
x44162, Russell.Mawby@ottawa.ca
SUBJECT:
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|
|
|
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OBJET :
|
That
the Community and Protective Services Committee recommend that Council receive
this report and approve that it be forwarded to the Minister of Municipal
Affairs and Housing as the City of Ottawa’s request for funding for the next 3
years to address housing needs in Ottawa.
Que le Comité des Services communautaires et de
protection recommande au Conseil municipal de prendre connaissance du présent
rapport et de permettre qu’il soit acheminé au ministre des Affaires
municipales et du Logement dans le cadre d’une demande de financement de la Ville
d’Ottawa pour les trois prochaines années visant à répondre aux besoins en
matière de logement.
EXECUTIVE SUMMARY
At its
meeting of March 1, 2007, the Community and Protective Services Committee
approved a motion directing staff to prepare a report identifying City’s needs
with respect to: new social housing
units; supportive housing units; Aboriginal housing, and; capital funds for the
renovation and repair of Ottawa Community Housing Corporation’s housing stock.
This
report assesses the current gaps in meeting the need for permanent affordable
housing and estimates the need for federal and provincial funding to fill those
gaps over the next 3 years.
A
significant number of people cannot afford market prices for housing, and
Ottawa is losing affordable rental housing at a significant rate – over 2,000
units since 1995. Investments in social housing provide a dedicated and lasting
resource to the community.
There are
over 10,000 households on the waiting list for social housing. About 20% of the list is housed each
year. The average wait time is 5 – 8
years, with seniors and singles being housed more quickly. The majority of households on the waiting
list for social housing have annual household incomes of less than $20,000.
New
Affordable Rental Housing Units
The City
established a target of adding 500 low-income units per year in 2004. As of 2007 the City has received funding for
586 units from the Canada/Ontario Affordable Housing Program (AHP). Thus, the
City is currently 1,414 units short of its target of 2,000 units after 4
years. A capital investment of $90,000
per unit is required to enable low-income affordability. To meet the current shortfall of 1,414 units,
the City needs $127.26 million.
To meet the 1,500 unit target over the next three years requires another
$135
million.
Supportive Housing
Support services help people stay in their communities and in their homes. Supportive housing is affordable housing with dedicated on-site supports and is a necessary part of the housing solution.
At the end
of 2006, there were 2,630 people on the Ottawa Supportive Housing Network’s
waiting lists for supportive housing. Tenants
of supportive housing tend to have very low incomes, so a capital investment of
$120,000 per unit is required to enable rents-geared-to-income. To meet the target of 2,000 units, the City
needs $240 million over the next three
years. Housing providers also need
on-going operating funding to provide the necessary support services to their
residents.
Aboriginal
Housing
Aboriginals are among the lowest income residents of Ottawa, accounting for an estimated 20% of the homeless. In Ottawa, 28.5% of Aboriginal renter households pay more than 30% of their household income for housing. There are 2 urban/native housing providers in Ottawa, with a total of 225 units. Their current waiting lists have 227 households. Gignul Non-Profit Housing Corporation estimates it has the capacity to manage an additional 30 to 40 units of new housing.
Tenants of aboriginal housing tend to have very low incomes, so a capital investment of $120,000 per unit is required to enable low-income affordability. To meet the target of 200 units, the City needs $24 million.
Maintenance of existing social
housing
All housing
requires on-going capital repair and replacement to remain physically viable.
Social housing providers have insufficient capital reserves, and limited
ability to generate additional revenues or financing to meet normal maintenance
and repair and replacements. A recent
study of local social housing providers shows 43% will deplete their reserve
funds by 2010, and additional 34% will deplete their reserve funds by
2015.
There are
18,931 existing social housing units under City oversight. The gap in capital funding for maintenance
and repairs is estimated at $712 per unit per year for the next 30 years, or
$14 M per year resulting in a 3 year requirement of $42 million.
Conclusion
Accordingly, over the next three years, to meet established targets, Ottawa requires an additional 5,114 units of low-income affordable housing, including supportive housing and aboriginal housing. Based on sufficient capital investment to ensure low-income affordability, meeting this need over the next three years requires $526.3 million as well as an annual investment of $63 million per year in ongoing funding beyond the three year horizon. Ensuring the long-term physical viability of the existing stock of 18,931 units of social housing requires $14 million each year over the next 30 years, which equals $42 million over the next three years. The existing and ongoing investment requirement is attached as Document 1.
The level of funding required reflects the fact that Federal and Provincial funding for housing has been severely curtailed since 1995. Canada’s well-regarded social housing development programs were ended in 1995. At times, over 1,000 units per year were being developed in Ottawa. Since 1995, a total of 640 new affordable units have been developed, an average of just over 50 units per year.
Funding for existing social housing was also not adequate to support the long-term management of the housing stock when it was transferred to municipal control in 2002. The capital shortfalls are of concern across the Province, and Service Managers are working together to identify these needs so that municipal councils, with the Association of Municipalities of Ontario, can secure the necessary funding to ensure that the public investments in housing are maintained for future generations.
RÉSUMÉ
Au cours d’une réunion du Comité des Services
communautaires et de protection qui a eu lieu le 1er mars 2007,
les membres du Comité ont approuvé une motion demandant au personnel de
préparer un rapport sur les besoins de la Ville en ce qui concerne : les
nouvelles unités de logements sociaux, les unités de logement en milieu de
soutien, les logements pour Autochtones, et les fonds pour dépenses en capital
pour la rénovation et la réparation du parc de logements de la Société de
logements communautaires d’Ottawa.
Le présent rapport présente les lacunes
actuelles, qui empêchent la Ville de répondre aux besoins de logements
permanents à prix abordable, et une estimation des besoins de financement
fédéral et provincial qui permettraient de combler ces écarts au cours des
prochaines années.
Un nombre important de personnes ne peuvent se
permettre les logements au prix actuel du marché, et Ottawa perd des logements
locatifs abordables à un taux accéléré : plus de 2 000 unités depuis
1995. Les investissements dans les logements sociaux représentent une ressource
durable et conçue pour la collectivité.
Plus de 10 000 ménages sont sur une liste
d’attente pour un logement social. Environ 20 % des ménages figurant sur
cette liste reçoivent de ces logements chaque année. Le temps d’attente moyen
est de cinq à huit ans. Un logement est attribué aux personnes âgées et aux
célibataires plus rapidement. La majorité des ménages figurant sur la liste
d’attente de logements sociaux ont un revenu de ménage annuel de moins de
20 000 $.
Nouvelles
unités de logement locatif abordable
En 2004, la Ville s’était fixée comme objectif
d’ajouter 500 unités de logement à prix modique par année. En 2007, la
Ville a reçu du financement pour 586 unités dans le cadre du Programme
Canada-Ontario de logement abordable (PLA). La Ville est actuellement en
déficit de 1 414 unités par rapport à son objectif de 2 000 unités
après quatre ans. Un investissement de capitaux de 90 000 $ par unité
est nécessaire pour assurer l’abordabilité des logements à prix modique. Pour
être en mesure de combler l’écart actuel de 1 414 unités, la Ville a
besoin de 127,26 millions de dollars et pour atteindre l’objectif de 1 500 unités au
cours des trois prochaines années, la Ville aura besoin de 135 millions de dollars supplémentaires.
Logement en milieu de soutien
Les Services de soutien aident les
citoyens à demeurer dans leur collectivité et leur foyer. Les logements en
milieu de soutien sont des logements à prix abordable auxquels s’ajoute un
service de soutien sur place. Ce service est un élément essentiel de la
solution au logement.
À la fin de 2006, les noms de 2 630 personnes
figuraient sur la liste d’attente du Réseau de logement en milieu de soutien à
Ottawa, en vue d’obtenir un logement en milieu de soutien. Les locataires des
logements en milieu de soutien ont généralement des revenus très faibles, ce
qui justifie l’investissement en capital de 120 000 $ par unité nécessaire pour assurer un
loyer proportionné au revenu. Pour être en mesure d’atteindre la cible de
2 000 unités, la Ville a besoin de 240 millions de dollars au cours des trois prochaines années. Les fournisseurs de
logements ont également besoin de capitaux d’exploitation permanents afin
d’offrir les services de soutien nécessaires à ces résidents.
Logement
pour Autochtones
Les Autochtones font partie des
résidents à faible revenu d’Ottawa, et ils comptent pour environ 20 % du
nombre de sans-abri. À Ottawa, 28,5 % des ménages locataires autochtones
paient plus de 30 % de leur revenu pour un logement. Il y a deux
fournisseurs de logements urbains pour Autochtones à Ottawa, pour un total de
225 unités. La liste d’attente actuelle compte 227 ménages. La
Coopérative de logement à but non lucratif Gignul estime être en mesure de
gérer de 30 à 40 unités de logements supplémentaires.
Les locataires des logements pour
Autochtones ont généralement des revenus très faibles, ce qui justifie un
besoin d’investissement en capital de 120 000 $ par unité pour en
garantir l’abordabilité. Pour être en mesure d’atteindre l’objectif de 200 unités, la Ville a besoin de 24 millions
de dollars.
Entretien des logements sociaux
actuels
Les logements ont toujours besoin de réparation et de
remplacement d’immobilisation pour demeurer physiquement viables. La réserve
d’immobilisation des fournisseurs de logements sociaux n’est pas suffisante et
leurs capacités de générer des revenus supplémentaires ou de financer ces
réparations et ces remplacements d’entretien normal sont limitées. Une étude
récente effectuée auprès des fournisseurs de logements sociaux révèle que
43 % de ceux‑ci auront épuisé leur fonds de réserve d’ici 2010 et
34 % d’ici 2015.
Il y a actuellement 18 931 unités de logements
sociaux sous la supervision de la Ville. L’écart dans les fonds pour les
dépenses de capital pour l’entretien et la réparation est estimé à 712 $
par unité par année pour les 30 prochaines années, c’est‑à‑dire
14 millions de dollars par année provenant de besoins échelonnés sur trois
ans de 42 millions de dollars.
Conclusion
En conséquence, au cours des trois
prochaines années et pour être en mesure d’atteindre les objectifs ciblés, la
Ville aura besoin de 5 114 unités supplémentaires de logements à prix
abordable, y compris les logements en milieu de soutien et des logements pour
Autochtones. Pour ce qui est de l’investissement en capital nécessaire pour
assurer l’abordabilité, le respect de ces besoins au cours des trois prochaines
années représente un investissement global de 526,3 millions de dollars et
un investissement annuel de 63 millions de dollars de financement
récurrent au‑delà des trois horizons. Pour être en mesure d’assurer la
viabilité physique à long terme du parc actuel de 18 931 unités de
logements sociaux, la Ville a besoin de 14 millions de dollars par année
au cours des 30 prochaines années, ce qui équivaut à 42 millions de
dollars pour les trois prochaines années. Les besoins d’investissements actuels
et permanents sont précisés à l’annexe 1.
Le niveau de financement requis
tient compte du fait que le financement fédéral et provincial en matière de
logement a été significativement réduit depuis 1995. Les programmes
d’aménagement de logements sociaux du Canada ont pris fin en 1995. À l’époque,
plus de 1 000 unités étaient construites chaque année à Ottawa. Depuis
1995, on a construit un total de 640 nouvelles unités abordables, une
moyenne de tout juste 50 unités par année.
Le financement des logements sociaux actuels
est également insuffisant pour être en mesure d’appuyer la gestion à long terme
du parc de logements lorsque ce dernier a été transféré sous le contrôle de la
Ville en 2002. Les insuffisances de fonds d’immobilisations sont une
préoccupation importante dans toute la province, et les gestionnaires de
service tentent actuellement de déterminer ensemble ces besoins pour que les
conseils municipaux, en collaboration avec l’Association des municipalités de
l’Ontario, puissent assurer le financement nécessaire pour veiller à que les
investissements publics dans le logement soient maintenus pour les générations
futures.
On 1 March 2007, the Community and Protective Services Committee approved the following Motion, which was considered as an additional item to the agenda that day:
That the Deputy City Manager’s office prepare a report to come back
to the Community and Protective Services Committee identifying the City’s needs
with respect to;
-
new social housing units
-
supportive housing units
-
capital funds for the renovation and repair of OCH
downloaded former provincial housing stock.
-
Aboriginal housing
And be it further resolved that the provincial government flow this money through to municipalities as soon as possible and not hold back federal housing funding as has happened in the past and that there not be a compulsory municipal co-funding component.
The following report assesses the current gaps in the housing system and estimates the current need for federal and provincial funding to fill those gaps. The immediate focus is to advise the Provincial government of the amounts and types of funding wanted in Ottawa under the Canada/Ontario Affordable Housing Program (AHP). A more comprehensive overview of housing needs and strategies for Ottawa will be brought forward later in the year via the City Housing Strategy. Any new funding programs will also be brought to Council for approval.
Current Situation
Governments subsidize the cost of housing because a significant number of people in our communities cannot afford market prices for housing. Currently, approximately 35% of renter households, or some 42,000 Ottawa households, pay in excess of 30% of their income on housing and therefore face affordability problems. The costs of not having enough affordable housing are significant, including lost productivity and higher costs for homeless services (e.g., emergency shelters, day programs), health care and crime prevention.
Rent subsidies cover the gap between what it costs to provide a housing unit and what a low income tenant can afford to pay for that housing unit, based on a general rule that no more than 30% of gross household income should go to rent. Thus social housing is also known as rent-geared-to-income housing, or RGI. While there are rent supplement programs that help subsidize the cost of market housing, social housing provides a dedicated and lasting resource to the community, and in the long run is expected to be more cost effective, because the housing should remain available to meet low-income needs after the subsidy programs expire.
The province transferred responsibility for funding social housing subsidies to cities in 1998, and the City assumed responsibility for the administration of social housing legislation – the Social Housing Reform Act (SHRA or “the Act”) - in 2000. The annual net cost to the City of Ottawa for housing subsidies is about $64 million, including social housing and rent supplements to private landlords.
Access to social housing is
controlled by the Act, and generally requires that households apply to the
Centralized Waiting List (CWL). In
Ottawa, the CWL is managed on behalf of the City by the Social Housing Registry
(The Registry). At the end of December
2006, there were 10,055 active applicant households on the CWL, up slightly
from 9,922 at the end of 2005. The number of
new applications was up slightly to 5,160 in 2006 from 4,720 in 2005.
The average wait time for a household on the waiting list continues to be 5 - 8 years, longer if waiting for a 4 or 5 bedroom unit. Singles and seniors are usually housed more quickly, and some applicants are eligible for priority access because of specific circumstances that require faster access to housing: homelessness, urgent safety concerns, life-threatening medical conditions, and fleeing domestic violence.
The vast majority of households on the waiting list for social housing continue to have annual household income of less than $20,000, with approximately 79% of the households on the waiting list in 2006. The composition of the waiting list (i.e. percentage of singles, families, seniors) remains relatively stable:
|
|
2005 |
2006 |
|
households with children |
4,301 (43.3%) |
4,054 (40.3%) |
|
single adult households |
3,628 (36.6%) |
3,974 (39.5%) |
|
seniors households |
1,297 (13.7%) |
1,382 (13.8%) |
|
2 or more adult households |
696 (7.0%) |
645 (6.4%) |
|
Totals |
9,922 |
10,055 |
The number of
households housed from the CWL in 2006 increased slightly to 2,165, compared to
2,112 households in 2,005 and 2,005 households in 2004. Because senior governments are no longer
funding additional rent-geared-to-income social housing, the number of units is
static, and in order for a new applicant to be housed, an existing tenant must
vacate their unit.
Staff estimates that the cost of subsidizing social housing will continue to climb at rates above inflation. In the 2007, the budget for operating subsidies was increased by $8.1 million or 9.1% over 2006. There are two reasons for these increases. First, the costs of operating housing – utilities, taxes, insurance, administration - continue to climb at rates significantly higher than average inflation. For example, the provincially mandated cost increases for 2007 in some housing programs was over 10% for utilities and almost 24% for fuels. Secondly, the incomes of most social housing tenants remain stagnant, which in effect means a net decline in purchasing power year over year. For example, minimum wage earners’ buying power has fallen by about 10% since 1995, and families living on Ontario Works (OW) or Ontarians with Disabilities Support Program (ODSP) payments have had only a 2% increase over that time, after a 22% cut in 1995. Operating subsidies cover the gap between what tenants can afford to pay and what it costs to provide the unit, so the net effect of increasing costs and stagnant tenant rental payments is increased subsidies.
Existing social housing was
funded under a variety of Federeal
and Provincial programs that included both subsidized mortgages and monthly
operating subsidies. These programs
ended in 1994. In 2003, a new Federal/Provincial program was announced that
provides up front capital funding to subsidize the development of new
housing. While not
rent-geared-to-income, affordable housing is housing that is rented at rents
significantly lower than comparable market rents. This affordability is achieved by providing one-time capital
grants to developers, waived fees, and land, which reduces the cost to provide
the units to tenants.
In 2004, the City established a target of 500 new units of low-income affordable housing per year. The target was based on balancing the estimated demand for low-cost housing with a reasonable assessment of the community’s capacity to deliver and manage low-cost rental housing. Meeting the target is fundamentally dependent on funding from federal and provincial governments. The following table shows the number of permanent, affordable units funded (i.e. Canada/Ontario Affordable Housing Program and/or National Homelessness Initiative).
Affordable Units Funded vs. City Target
|
Year |
Target |
Funded |
Gap |
|
2004 |
500 |
271 |
(229) |
|
2005 |
500 |
139 |
(361) |
|
2006 |
500 |
0 |
(500) |
|
2007 |
500 |
176* |
(324) |
|
Total 2004-07 |
2000 |
586 |
(1,414) |
|
Percentage |
|
30% |
70% |
* expected
The average development cost for the 586 new units built in Ottawa under the AHP has been about $144,000 per unit. The average public investment has been about $90,000 per unit, from all three levels of government. The funding breakdown has been approximately $60,000 per unit average from the federal and provincial governments and $30,000 per unit average from the City.
Each of these projects has been developed by a not-for-profit organization or has signed agreements that otherwise ensure these units remain affordable in perpetuity without the need for further public subsidy. Taking an average of 30 years, the average public cost per unit per year is about $3,000, compared to an average of $6,400 per year for traditional private rent supplements. All figures are in constant 2006 dollars.
Based on sufficient funding from senior levels of government without the need for a municipal capital contribution, the cost to fund the current 1,414 units gap via the AHP is approximately $127 million, plus an additional $45 million per year to meet the annual target of 500 units. This equates to a subsidy of about $3,000 (in 2006 dollars) per year for 30 years, bearing in mind that this housing stock will remain affordable over a much longer period of time.
Since the Canada/Ontario Affordable Housing Program began in 2004, the focus has been on developing new affordable housing. It has been pointed out that acquiring existing private sector housing and converting it to permanent affordable housing may be a more cost-effective way of meeting low-income housing needs in Ottawa. Acquisition and rehabilitation is not necessarily less expensive than building new, depending on the state and location of a given property. A related point is that the purpose of this kind of approach is not necessarily to salvage buildings in need of significant repair, but to help preserve the existence of good quality low-cost housing.
Ottawa has seen a significant net
loss of purpose-built rental housing.
In 2006, there were 68,178 rental housing units in Ottawa, down from
70,251 in 1995, representing a loss of 2,073 units. These units were lost to the market for a number of reasons,
including demolition and conversion to condominium. It is important to note that existing rental housing may also
become less affordable because when owners invest in the necessary capital
repairs and upgrades, they may have to raise rents in order to pay for those
investments, which may make the housing unaffordable to low-income
households. These investments are
important to maintain the viability of the existing housing stock, but the loss
of affordability is significant.
New purpose-built development will remain important and necessary, but increased effort to acquire and reposition existing housing to ensure permanent affordability is a tool that requires more attention, and perhaps deliberate funding.
As discussed above, affordable
housing is necessary for many people in Ottawa, but housing alone is often not
enough. The support services that help
people stay in their communities and in their homes are a necessary part of the
solution. Housing with supports includes transitional
housing, supportive, and supported housing.
Staff are developing a business case for supportive housing based on a “housing first” model for dealing with chronic homelessness. The business case will look at the current costs of municipal services provided to the homeless population in Ottawa versus costs associated with properly funded supportive housing options. A progress report on “housing first” strategies is expected back to the Community and Protective Services Committee by fall 2007.
The focus of this report is on the physical availability of housing, which in this case means dedicated, often purpose-built housing with on-site support services available to residents to enable them to live independently in the community. Supports range from on-site counseling for client tenants, to case workers providing regular health, mental health and counseling services.
Supportive housing includes housing for individuals with health difficulties or disabilities such as physical disabilities, mental illnesses, addictions, developmental disabilities, and HIV/AIDS. Other groups also need specialized housing, including women fleeing domestic violence, Aboriginal persons, Inuit, people leaving corrections facilities, seniors, and youth.
The Ottawa Supportive Housing Network is a coalition of agencies reflective of the diversity of needs for supports to housing. At the end of 2006, there were 2,630 people on the Ottawa Supportive Housing Network’s waiting lists for supportive housing. Agencies use a common application form, but applicants may apply to more than one agency depending on their needs and preferences.
The City also administers cost-shared (80% province; 20% City) funding for 26 Domiciliary Hostels, which provide supportive housing for approximately 850 special needs clients across the City.
All three levels of government and dozens of local agencies play a role in providing supports to housing. Two provincial ministries are responsible for providing most of the funding for supports to housing in Ottawa: the Ministry of Health and Long Term Care and the Ministry of Community and Social Services. Funding and coordination at senior government levels has been inadequate and unstable and as such, there are gaps in local services. Extensive consultation with community stakeholders confirmed that the need for supports to housing in Ottawa is critical and is not currently being met.
While the Supportive Housing
Network waiting list does include applicants who have registered with more than
one agency, it is also assumed that others who may need dedicated supportive
housing may not have registered. For
example, in existing social housing communities, there appears to be growing
numbers of residents who may need additional supports in order to live
independently in the community, including the option of moving to dedicated
supportive housing. The City is
currently working with community stakeholders to identify the need for support
services for the increasing number of residents requiring support to live
independently in the community. We also
know that there is a growing concern about the housing needs for people with
developmental disabilities that may not currently qualify for Ministry of
Health program funding, but who clearly need some form of supported independent
living opportunities.
Therefore, our current projection is that, per the Supportive Housing Network waiting list, the Provincial government needs to provide funding to house at least 2,000 people or households, including both capital funding to build or acquire dedicated housing units, as well as ongoing funding to provide the necessary support services. Current estimates show that the average annual subsidy required to provide with supports housing is about $13,000 to $18,000 per year, or about $35 to $50 per day. This compares to about $5,000 to $8,000 per year ($13 to $22 per day) for rent subsidized housing without dedicated supports. The cost to house people in emergency shelters, hospitals or other care facilities ranges from $100 to $3,000 per day.
Because tenants of supportive
housing usually have very low-incomes, capital funding of up to $120,000 per
unit is generally required to ensure that rents are affordable (ie, they are
paying no more than 30% of their income towards rent). Based on the previous estimated need for
about 2,000 units, this would require funding of up to $240 million. This equates to a subsidy of about $4,000
per year for 30 years, bearing in mind that this housing stock will remain
affordable over a much longer period of time.
There are 2 aboriginal housing
providers in Ottawa who maintain their own waiting lists. Gignul Non-Profit
Housing Corporation has a total of 162 housing units and 215 households on
their waiting list. Inuit Non-Profit Housing Corporation has a total of 63
units housing units and 12 households on their waiting list.
Based on information provided by Gignul Non-Profit Housing Corporation, in excess of 200 units of affordable housing are needed to satisfy the housing demand of Aboriginal families and individuals in the City of Ottawa.
Gignul Non-Profit Housing Corporation estimates they have the capacity to manage an additional 30 to 40 units of new housing, occurring in two phases. Phase 1 consists of a 15-unit apartment complex. This project is planned but requires funding to get off the ground. Phase 2 consists of an additional 15 to 25-unit mix of affordable rental and home ownership.
Aboriginals living in Ottawa are among the lowest income residents, accounting for an estimated 20% of the homeless. Therefore, capital funding of up to $120,000 per unit is generally required to ensure that rents are affordable. Based on the previous estimated need for about 200 units, this would require funding of up to $24 million. This equates to a subsidy of about $4,000 per year for 30 years, bearing in mind that this housing stock will remain affordable over a much longer period of time.
There are 56 social housing providers in Ottawa who manage a total of 289 projects. The estimated replacement value of this housing stock is $2.8 billion.
Whether private for-profit or low-income social housing, the average annual operating cost to provide a rental housing unit in Ottawa in 2005 was roughly $10,500, including general capital repairs. There is only minimal difference between the cost to provide a non-profit social housing unit and the average cost of a for-profit unit in the market. The main difference is that social housing providers are required to house people with low incomes, and that subsidies are provided to cover the gap between what those low-income tenants can afford to pay (based on a maximum of 30% of household income towards rent) and what it costs to provide the unit. In social housing, the rent and subsidy revenues that landlords have to work with are not sufficient to cover all their costs. Social housing landlords are also restricted in how they can raise revenues to meet their costs. For example, unit rents, subsidies and allowable capital reserves are determined by provincial legislation for most social housing.
Like all physical assets, social housing properties require regular repair and maintenance, as well as more significant replacement or upgrade of elements of the building structure - doors and windows, roofs, parking structures and driveways, elevators and mechanical and electrical system.
Social housing providers are generally required to maintain defined capital replacement reserve funds to pay for these kinds of repairs. The exception is the Public Housing program, which is not currently allowed to maintain capital reserves, and instead receives an annual payment for capital repairs. Public Housing is the 8,618 units of social housing formerly owned by the provincial Ontario Housing Corporation, now owned by Ottawa Community Housing as a result of the downloading of social housing in 2002. The annual capital subsidy payment has been fixed at $6.625 million per year, although in 2007 staff recommended a $1.5 million increase to the public housing capital subsidy, and that this budget be indexed to at least keep pace with inflation.
Current Annual Reserve Fund Balance (year 2005) per unit:
|
Funding Program |
Average |
Range |
|
Public |
*$769 |
|
|
Provincial |
$578 |
$262- $748 per unit per year |
|
NHA95 |
$568 |
$101 – $1,058 per unit per year |
|
NHA26/27 |
$605 |
$43 – $1,578 per unit per year |
*The Public Housing portfolio does not have a reserve fund. The average
per unit contribution is based on an annual capital allocation of $6,625,500
divided by 8,618 Public Housing units.
In 2007, the on-going capital allocation was increased by $1.5 million,
an average of $177 per unit, for a total annual capital contribution of $946
per unit per year.
As noted above, social housing providers have legislated restrictions on how they manage their finances compared to private sector rental or condominium housing. There has long been concern that the replacement reserves for social housing are not adequate to meet current and future needs. Estimates from the provincially mandated but arm’s length Social Housing Services Corporation suggest that on average, there is a shortfall of about $600 - $700 per unit per year for social housing across Ontario.
In 2004, the City implemented a Capital Planning Grant Program (CPGP) to assist local social housing providers to undertake Building Condition Assessments (BCAs) to assess the current physical condition of their buildings as well as the capacity of their replacement reserves to meet capital needs over the next 30 years.
A Building Condition Assessment is a standard tool used throughout the housing industry to estimate the cost in present day terms to replace or repair building systems elements, and when those repairs or replacements are likely to occur. A Reserve Fund Study builds on the information provided in a BCA, and converts the present cost of future repairs to projected actual costs over 30 years, based on an assumed rate of inflation. This enables the building owners to plan both their contributions to capital reserves and the scheduling of required work.
The City has or will receive BCAs from 34 (62%) local social housing providers. Ottawa Community Housing (OCH) is in the middle of completing their BCA analysis. When OCH information is included, the City will have information on about 92% of the social housing stock. In the meantime, the findings from the BCAs already received are being extrapolated to inform issues across the entire stock of social housing in Ottawa.
In general, the current level of contributions to capital reserve funds is not adequate to meet or sustain the capital needs of the social housing portfolio. This is not unique to Ottawa, and is consistent with findings across the province.
Based on the BCA study results received so far:
Financial Forecast
Projected Capital Spending – 30 Year study period
2005 to 2034
|
||||
|
Funding Program |
Number of Units |
Total Projected Spending over 30 year period |
Projected Spending per unit over 30 year period |
Projected Average Spending per unit per year over 30 year
period |
|
Public |
8,618 |
$354,716,880 |
$41,160 |
$1,372 |
|
Provincial |
6,761 |
$282,648,300 |
$41,806 |
$1,394 |
|
NHA95 |
2,080 |
$93,319,014 |
$44,865 |
$1,496 |
|
NHA26/27 |
1,472 |
$49,959,705 |
$33,940 |
$1,131 |
|
Total (2005 Dollars): |
18,931 |
$780,643,899 |
$41,236 |
$1,375 |
The above tables illustrate that over the course of 30 years, capital spending on social housing should be in the range of $780,000,000, or an average of $1,375 per unit per year. The actual 2005 average annual contribution to capital reserves was about $663 per unit, leaving a current average gap of about $712 per unit per year.
These figures are reasonably consistent with the expected capital spending for any residential property in Ottawa. The difference is that social housing landlords have limited means of generating revenues to meet those costs, and in general, must rely on public subsidies.
This gap could be dealt with by increasing the annual subsidy per unit to enable providers to adequately fund their reserves and pay for capital repairs. This would increase the gross subsidy cost by about $14 million per year, from the current $80 million per year (estimate includes both City and Federal transfers) to $94 million per year (estimate includes inflation from 2005).
It could also be dealt with via one-time lump-sum capital payments to providers to ensure their current reserves are able to remain viable over the 30-year time frame of capital repairs. This approach would require a one-time payment of $297 million (2005 dollars), and assumes that the current cost-factored increases to capital reserves will continue over those 30 years.
Alternatively, some of the housing stock could be sold to generate capital to maintain the remaining stock, but under current legislation, the City is responsible for maintaining a defined amount – 18,931 units – of social housing, and would have to find ways to replace that stock, at an average estimated replacement cost of about $150,000 per unit. This in essence is what Toronto Community Housing is doing with their Regent Park redevelopment – selling some of the land to private developers and using the proceeds to rebuild the social housing, and improve the surrounding community.
The choice of approach depends in large part on if and how senior levels of government are willing and able to respond to these needs, in the housing stock that they initially funded.
A related issue is how much of this funding deficit is related to poor program design or under-funding when this housing was owned or funded directly by Provincial and Federal governments. Poor program design refers to the funding formulas, and in some cases, funding caps that housing providers have to operate with, which, for example, limit their ability to adequately fund their capital reserves, or in the case of Public Housing, even have capital reserves. Staff have been working with other Service Managers, the Social Housing Services Corporation and the Association of Municipalities of Ontario (AMO) Task Force on Housing and Homelessness to develop strategies to take to the provincial and federal governments to change the social housing legislation and/or program designs to improve housing providers ability to manage their housing stock.
The legacy of funding from previous governments is a much more complicated issue, with no clear answers as to who owes what. For the most part, efforts are focused on identifying future needs, and lobbying other levels of government for additional funding, whether one-time or annual increases, to meet those needs.
What is clear is that neither municipal governments nor local housing providers have the capacity to solve these problems alone, but if capital needs are not addressed, we will lose a significant public asset and the core of our stock of affordable housing.
In the meantime, in the 2007 budget process Council approved the staff recommendation to establish a Revolving Loan Fund for Capital Repairs to address urgent capital maintenance needs in social housing. A one-time contribution of $4.9 million was allocated to get the fund established, and the Long Range Financial Plan recommends an additional $2 million per year for the next 10 years. The Fund will address urgent capital repair needs that exceed the ability of housing providers to fund from their existing capital reserves as part of a longer-term capital maintenance program. Loans would be secured on title, and repayment would begin when providers are able to do so within their financial capacity or when existing mortgages are retired. Repaid loans will be used to provide new loans to other providers, subject to available funding. Social housing providers will apply for funding based on submission of a simplified business case to establish need and priority for funding. The Housing branch will be creating a standard template for providers to use as a guide for their submission request. The fund is expected to be available by mid-year 2007.
While this report was being prepared, the Province introduced some changes to the Canada/Ontario Affordable Housing Program, and also released its 2007 budget, which included an additional $392 million in federal funding for housing.
These new funds were provided from the federal Affordable Housing Trust and Off-Reserve Aboriginal Housing Trust. The Province proposes to launch three new housing initiatives to assist low-income families in Ontario starting in January 2008:
The City of Ottawa received $7.12 million under the first of these programs, and on May 23, 2007, Council directed staff to allocate these funds as soon as possible to meet local housing needs. Based on consultation with the community, these funds will be balanced between adding to the low-income stock and addressing necessary urgent repairs to social housing via the Revolving Loan fund detailed above. Details of other programs and allocations to Ottawa remain unclear at this time, and information and recommendations will be brought to council once available.
Based on the above discussion, and notwithstanding the recent budget announcement, the following request should be made of the Provincial Government for future funding from the Canada/Ontario Affordable Housing Program over the next 3 years:
- Funding for 1,500 new units of low-income affordable housing add to the social housing stock, plus an additional 1,414 units to bring the City up to the 500 units per year target established in 2004. Funding should be based on an average contribution of $90,000 per unit to achieve a mix of low-income and moderate income affordability. The option to apply this funding to the acquisition and rehabilitation of existing housing should be allowed.
- Funding for 2,000 units of dedicated supportive housing should be provided, based on an average total contribution of $120,000 per unit to achieve low-income affordability. Sufficient funding to provide the necessary support services is also necessary, requiring collaboration between the Ministries of Housing, Community and Social Services and Health and Long Term Care.
- Funding for 200 units of housing targeted to aboriginals should be provided, based on an average total contribution of $120,000 per unit to achieve low-income affordability. The option to apply this funding to the acquisition and rehabilitation of existing housing should be allowed.
Up front capital funding reduces the cost to provide housing, by reducing the required mortgage and thus monthly debt servicing costs. The average per unit capital funding recommended above can be reduced if the Province provides dedicated rent supplement funding to allow lower-income households to afford the cost to provide this housing.
In addition, on-going funding for capital maintenance of existing social housing should be provided based on an average of $720 per unit per year, or about $14 million per year total, indexed for inflation, for the next 30 years. A summary of the required investment is attached as Document 1.
The level of funding required reflects the fact that Federal and Provincial funding for housing has been severely curtailed since 1995. Canada’s well-regarded social housing development programs were ended in 1995. At times, over 1,000 units per year were being developed in Ottawa. Since then, a total of 640 new units have been developed, an average of just over 50 units per year.
Funding for existing social housing was also not adequate to support the long-term management of the housing stock when it was transferred to municipal control in 2000. The capital shortfalls are of concern across the Province, and Service Managers are working together to identify these needs so that municipal councils, with the Association of Municipalities of Ontario, can secure the necessary funding to ensure that the public investments have been made in housing are maintained for future generations.
On March 30, 2007, the Association of Municipalities of Ontario approved a set of principles for housing in Ontario (attached as Document 2). These principles speak to the need for more comprehensive approaches to dealing with housing issues, including adequacy of funding not just for new development, but also to maintain the existing housing stock (social and market) as well as the necessary supports to enable people to live independently in the community. Staff strongly support these principles, and recommend that they be communicated to the Province as part of this report.
Information in this report was compiled from existing documentation, including previous City reports; the Alliance to End Homelessness Annual Report Card; information from the Supportive Housing Network, the Social Housing Registry, the Aboriginal Working Group and others. Drafts of the report were circulated with key community stakeholders as part of a consultation on directions and priorities for existing and future provincial funding for housing.
This report is directed at advising the Province of Ontario of the scope of funding and support needed in Ottawa to address housing needs. As such, there are no direct financial implications arising from that aspect of this report, and as per the directing motion, analysis was done on the presumption that no additional City funding would be required.
A report will be brought to Council if any additional funding or authorities are required in order to participate in any housing program.
Document 1: Housing Need – Summary of Required Investment
Document 2: AMO Principles for Housing in Ontario, March 30, 2007.
City Clerk: a copy of this report and attachments will be forwarded to the Minister of Municipal Affairs and Housing.
Legal: develop and approve loan agreements and supporting mortgage documents under the Revolving Loan Fund for Capital Repairs for social housing.
Housing Branch: Implement Revolving Loan Fund for Capital Repairs to social housing; Report on Building Condition Assessments and strategies to address the long-term capital needs of social housing; Report to Council as further details of the Canada/Ontario Affordable Housing Program become known.
DOCUMENT 1
|
Housing Need – Summary of Required Investment |
|||||
|
|
Number of units |
$
per unit |
Funding over next
3 years |
Units
per year, on-going (i.e.,
after 3 years) (indexed) |
|
Adding to the stock of
affordable housing
|
Target
|
Annual Total
|
|||
|
New affordable housing units |
1,500 |
$
90,000 |
500 |
$
45,000,000 |
|
|
Backlog of new affordable housing
units |
1,414 |
$
90,000 |
$
127,260,000 |
N/A |
N/A |
|
Supportive Housing |
2,000 |
$
120,000 |
$
240,000,000 |
100 |
$
12,000,000 |
|
Aboriginal Housing |
200 |
$
120,000 |
$
24,000,000 |
50 |
$
6,000,000 |
|
Total |
5,114 |
|
$
526,260,000 |
650 |
$
63,000,000 |
Fixing the existing social
housing stock
|
|||||
|
|
18,931 |
$
740/year |
$
42,000,000 |
18,931 |
$
14,000,000 |
TOTAL |
$
568,260,000 |
|
$
77,000,000 |
||
|
*All amounts in 2006 dollars |
|||||
DOCUMENT 2
Housing
stability and affordability is a primary factor in determining the economic,
social and physical health and well-being of Ontario's families and Ontario's
communities. Housing is more than just shelter,
it is the
interrelated system of services, supports, funding and policies that enable
Ontario's citizens to live in their community.[1]
Through
the intervention of the private, non-profit and government sectors the people
of Ontario enjoy the benefit of a large stock of residential ownership and
rental housing. Many would claim that
the province and country has some of the best housing conditions in the
world. Despite the excellent track
record of housing the people of Ontario, roughly 15% of housing needs of the
residents are not being adequately met.
While action by all housing stakeholders is essential, there is a key
role to be played by all orders of government to address the needs of
vulnerable families and individuals who cannot successfully compete in
Ontario’s housing market place.
Housing
in Ontario must be based on the following principles:
These
principles support a comprehensive long-term housing strategy that includes
policies and programs across the spectrum of public policy:
With
these principles, the right actions will happen:
§
Commitment
from all orders of government to develop and implement a comprehensive national
housing strategy. This will create and sustain healthy communities, social
integration, economic competitiveness and provide the opportunity for all
Ontarians to fulfill their dreams, expectations and live a full life.
HOUSING NEEDS IN OTTAWA
LE BESOIN DU LOGEMENT SOCIAL EN
OTTAWA
ACS2007-CPS-HOU-0009 CITY WIDE / À L'ÉCHELLE DE LA VILLE
John Dickie, Chair, Eastern Ontario
Landlord Organization (EOLO) spoke in opposition to the report and indicated how expensive it is to
address housing affordability issues through the construction of new social
housing. He suggested that the City can
best assist people on low-income with the cost of their housing by providing
portable housing allowances, which are cost effective and time efficient. The EOLO urged the Committee and Council to
examine housing allowances, implement pilot housing allowance programs and
promote the use of housing allowances to the government of Ontario. A copy of his submission is held on file.
Councillor Holmes requested that
staff prepare a brief summary of the report that councillors can hand out with
community papers and for their tenants.
Russell Mawby, Director of Housing agreed to this request.
That the Community and Protective Services Committee recommend that Council receive this report and approve that it be forwarded to the Minister of Municipal Affairs and Housing as the City of Ottawa’s request for funding for the next 3 years to address housing needs in Ottawa.
CARRIED, with R. Chiarelli dissenting
|
|
|
|
[1] On December 16th,
2006, the Federal Finance Committee put forth a recommendation that, in part,
read: "The Committee believes that
appropriate housing is also an important contributor to the productivity of a
nation´s residents and to the competitiveness of a country, since residents and
employees must be well-rested if they are to be productive in society, and
children and students must be appropriately housed if they are to concentrate
in school as well as to grow and thrive….Moreover, we feel that housing must be
affordable."