Canada's housing markets have been hot news all year, with existing homes setting sales records across the country, and the new home market also doing well. For the two-thirds of Canadians who own their homes, life is good -- low interest rates are keeping mortgage payments down, while house prices rise and increase the equity in their homes.
But those who don't have a home have also been making headlines. In Vancouver, a group of homeless people took over a vacant building and refused to leave. In Toronto, where a "tent city" of more than 100 homeless people had been established for a couple of years, the landlord finally moved in security forces and police to evict them. The landowner -- The Home Depot -- was criticised by some and praised by others for moving the squatters off its land.
The growing number of homeless people across the country are the most visible reminders that for many Canadians, keeping a roof over their head is a major struggle. Michael Shapcott, a research associate at the Centre for Urban and Community Studies at the University of Toronto and a long-time housing activist, says, "By any measure, the rental housing crisis has grown to desperate proportions. Supply is dwindling, rents are increasing. Median incomes (which, in real dollars, are only half of owners') fell by three per cent from $21,554 in 1984 to $20,947 in 1999. Renters' median net worth dropped by 48 per cent to $2,060 in 1999 from $3,985 in 1984. That barely covers two months rent in Toronto."
Shapcott submitted a paper to this week's TD Forum on Canada's Standard of Living , a gathering of business leaders and academics in Ottawa that banded together with the goal of providing practical solutions to how Canada can exceed the U.S. standard of living within 15 years. In his paper, Shapcott says, "Adequate, affordable housing is fundamental to the standard of living of Canadians generally...but there is a sharp divide between owners and renters in Canada."
He says that while home ownership enjoys government grants and tax measures such as capital gains exemptions, the federal government cut $1.8 billion in housing spending from 1984 to 1993, when it stopped all funding for new affordable housing. All the provinces except for Quebec have cut spending for social housing programs.
Hardly any new affordable housing is currently being built in Canada because there's no incentive for the private sector to build it. Shapcott says there's an increase in the number of existing affordable units that are being demolished or converted to expensive condominiums. The result is that vacancy rates for affordable housing remain critically low, and rents continue to rise.
"As the squeeze grows, more renters are forced into food banks," says Shapcott. "During 2001, almost 61,000 households faced eviction in Ontario, more than 80 per cent of them because they couldn't afford to pay the rent."
He says "growing homelessness is seen in overcrowded shelters from Vancouver to St. John's...There are more than 1,200 homeless people in Edmonton, and more than 100 people who are turned away from shelters there every night because there is no room." Shapcott also says that although official statistics of homeless deaths are not maintained anywhere in the country, the Toronto Disaster Relief Committee's list of known deaths of homeless people has 32 men, women and children in 2000 alone.
Shapcott is calling on the federal government to adopt a plan called the One Percent Solution, which was conceived by his colleague at the University of Toronto, David Hulchanski. It calls for all governments to double their housing spending and add an additional one per cent. That would mean that the federal government would have to come up with about $2 billion in new housing spending annually, which would return to the housing budget to the levels of the early 1990s.
The One Percent Solution envisions spending about half the money to create 10,000 new housing units every year. The units would be targeted to the low- and moderate-income families who need housing the most. Shapcott notes that building the units would also have the economic benefits of creating new jobs and producing tax revenues for all levels of government.
The proposed solution would also provide about $500 million a year for rent supplements, for both private and non-profit housing providers, based on a contract with the landlord to ensure the property is well-maintained and remains affordable over time.
The remaining funds would be divided up to provide support programs for those who require special services; a continuation of an existing federal government program that provides funds to upgrade properties and maintain them to livable standards; and an emergency relief fund for people who are already homeless.
"The key elements of the solution are apparent. The key actors are willing to participate. All that remains is to harness the resources and get the work done," says Shapcott.
While the federal government is currently studying several aspects of these and other proposals, no financial commitments have been forthcoming. The next federal budget is expected to be unveiled in February.