BC’s new rent supplements

The BC government has introduced a new program to address the crisis in housing affordability: rent supplements. Over the past five years, the BC government has stopped building affordable housing for low income people. There has been new federal money for this purpose but the government has used that money to build “assisted living” spaces for seniors (properly part of the health care system), which are a cheaper substitute for long-term care facilities.

Rather than get back in the social housing game, the new plan is to give financial support directly to low-income families. On the plus side, they have made it so that a landlord would not know whether one is getting the subsidy of not, thereby reducing the incentive to raise rents up to the new subsidized level. As columnist Paul Willcocks points out below, this could help a number of families. But ultmately it falls short of a real strategy. And I am concerned that the BC government likes these targeted programs where the poor have to fill out onerous amounts of paperwork to qualify (such is the case for the government’s child care subsidies).

The total amount of this program is $40 million per year, about 1% of next year’s projected budget surplus. So clearly more could be done given the pressing housing affordability problem. This is at root a market failure and requires public investment to expand the stock of low income housing, as developers are mostly interested in building high-end condos. It would be nice if the feds came back into the game, too, rather than seeing a tax cut as the solution to all problems.

Here’s Willcocks:

Not a housing strategy, but a small step

It’s a fine idea to bring in a rent-subsidy program for about 15,000 poor families in B.C., but it doesn’t qualify as the cornerstone of a housing policy.

Forest Minister Rich Coleman, who is also responsible for housing, unveiled what he called a housing strategy this week.

The general direction seemed fine, but there wasn’t a lot of meat – or in this case money – on the bones of the plan, dubbed Housing Matters BC.

The most significant news was the $40-million available in rent subsidies for up to 15,000 of the province’s poorest families.

People with children who are trying to live on less than $20,000 a year can apply for the subsidy. If they’re successful, they will get a cheque every month to help them pay the rent.

That’s obviously needed help. There is a 15,000-family waiting list for affordable housing in the province. In the meantime, families are struggling desperately to pay the rent and put food on the table, clothes on their kids and hope in their lives.

But the program is only a small start. The subsidy will be based mainly on the family’s income and and number of children. Across most of the province, a family of four getting by on $18,000 a year would get a rent subsidy of $76.50 a month.

Coleman said the theory is that the program will help families keep their housing costs to 30 per cent of their income, a widely used benchmark for acceptable levels.

There’s a catch. The government assumes that a family of four anywhere outside Greater Vancouver should be able to find housing for $705 a month. (Vancouver residents are allowed rents of up to $875 and a correspondingly higher subsidy.)

But in many communities acceptable rental accommodation for a family in that price range has become hard to find.

Coleman observed, rightly, that without the subsidies families are suffering and children’s futures are at risk. Soaring rents have left families with so little money that children are malnourished and their education suffers, he said.

Which makes it both inexplicable and outrageous that the subsidy program is closed to people on welfare. The same family of four on welfare is allowed a maximum of $590 a month for housing. Anything more has to come from their already inadequate support. The notion that those children’s suffering is less significant or that they are less worthy of help is appalling.

The subsidy program signalled a big shift from past policies. The government had focused on building – either directly or in partnership with non-profits – affordable housing units to increase the supply.

Coleman, a former developer, isn’t keen on that approach. It takes too long to get affordable housing built, especially given NIMBYism and municipal zoning problems, and costs too much. More people can be helped more quickly with subsidies.

Which is partly true. The problems come when rental housing simply isn’t available, a reality in many communities as developers choose condo projects over rental units.

The announcement included other measures – modest amounts of new money for shelters and seniors’ housing and a small outreach program to support the homeless.

The theory behind all this makes sense. There is no one magic solution to homelessness and housing affordability. Subsidies will help some families. Government-supported housing is also needed to ensure there is an adequate supply of affordable rental units. Homeless people need shelters and places to live where they get the support needed to keep them from sliding back to the streets.

All the elements have to be in place. Outreach programs fail when there is no housing available for people ready to get off the streets.

The housing crisis in B.C., is real, and not just for the homeless or the extremely poor. More than 60,000 families are spending more than half their income on rent.

The government took a very small step toward dealing with a very large problem.

Footnote: There is more to come. Coleman wants tax breaks for developers willing to build rental units and municipal policies that don’t slow development and push up costs. He’s also keen on seeing existing affordable housing projects cash in on the value of their land holdings and use the proceeds to construct higher density projects.