Affordability was top of mind for Canadians anticipating housing funds outlined in the federal budget, but many question the next steps in implementing the promised investments.
While the investment in the Affordable Housing Initiative doubled, Co-operative Housing Federation of BC president Patty Shaw said she will be remaining “cautiously optimistic” until there is a strategic plan that can direct how funds will be allocated.
“It's the most positive news we've heard for co-op housing in a very long time,” she said of the $2.3 billion the government proposed nationally over the next two years.
As a single mother with two children who has been using the co-op housing system for the past 25 years, Shaw said the fact the opportunities are offered on a "time-limited basis," is a red flag, saying time might be a luxury those outside the middle class might not be able to afford.
“We're not even talking about bringing people to the middle class [with social housing], we're talking about bringing them off the streets,” Shaw said. “I guess my immediate question is, what is the delivery model going to be? How are they going to deliver these subsidies?”
While the government forecasts over 10,000 rental units could result from the $85.7 million support in construction of affordable rental housing, real estate lawyer and founder of Small Law Corp. Neil Mangan said the same questions of implementation arise.
Mangan suggested that the ambiguous nature of the new funds might be due to the lack of information around why housing prices are disproportionately higher in B.C. than in other provinces, pointing to Budget 2016’s plan outside the affordable housing section to invest $500,000 in Statistic Canada to develop methods for gathering data on foreign homebuyer purchases.
“It's interesting that we have shockingly little information about housing participants, like who they are and what they're doing with the market,” Mangan said, saying the decision for research to be focused on foreign homebuyers, as opposed to general purchases, is problematic.
With the Affordable Housing Initiative expected to benefit more than 100,000 Canadian households, Mangan said the outcome of the data on foreign homebuyers will likely prove to be “boring," having little impact on the Canadian housing economy and being an urban-center-specific issue.
“There is a 7-10% hypothetical vacancy rate in downtown Vancouver,” he said. “To say that foreign homebuyers are the reason for this trend is a bit of a cop-out and can have racist, or at least xenophobic, undertones.
“And to assume that there is no impact is impossible, but how do we really know [foreign home buyers] are having an appreciable difference? There's just no data.”
However, with foreign home-buying regulations being a provincial and municipal issue, Budget 2016’s allocation of $19 million of increased annual spending to crack down on tax evasion and aggressive tax avoidance affects accountability in the housing industry in multiple ways.
“The real estate industry has long been a target for poor tax reporting practices, so anything to step up enforcement is a positive thing,” Mangan said, adding that strengthening the Financial Transaction and Reports Analysis Centre of Canada (FINTRAC) could be an good next step.
“Cracking down on the money laundering that we have seen well-established banks actively facilitate is very needed.”
Also addressed was the $200.7 million over the next two years for affordable housing for seniors, $554 million in improvement of First Nations housing and an additional $111.8 million to tackle homelessness through the Homelessness Partnering Strategy.
To see particular investments in these three areas is an aspect associate director of Raincity Housing Sean Spear said he finds positive. Raincity Housing, which provides shelter for those in the Lower Mainland, also works with housing residents who require possible support in the intersection of mental health and addiction.
“We're finding that the populations in our housing and services are aging, and appropriate housing for seniors is going to be crucial,” Spear said.
“It's been really, really hard to get investment in that and to have more tailored support in mental health and addiction specifically for seniors, because that does not exist.”
Following Budget 2016, Canadians will be looking on a provincial and municipal level for implementation of funds into various strategies and organizations which have the potential to influence future tax changes, an area Mangan noticed failed to be included.
“What I'd like to see that isn't addressed is how can we make changes to our general tax policies to real estate?” Mangan said. “Foreign homebuyers and capital is arguably a small impact on the market, and these strategic plans to address homelessness and social housing contain a lot of laudable measures, but they are triage measures.
“But what are we doing collectively that may contribute to the housing and affordability issue?”
However, Vancouver Mayor Gregor Robertson, who said he had been anticipating investments in affordable housing, called the investments “solid” on his Twitter account.
