2021 Provincial Budget on Affordable Housing

The provincial budget, announced on February 25, 2020, included some significant impacts on affordable housing in Calgary.  The Government of Alberta (GoA) is a core funder for CHC, providing both operating and capital funding for maintenance of existing affordable housing, as well as funding the rent supplement program. Although the reductions were not as great as some anticipated, some areas did receive funding reductions. Notwithstanding the well-understood challenges of the current economic environment, inadequate long-term funding erodes Calgary Housing Company’s (CHC’s) ability to operate affordable housing for the 9,000+ households that call CHC-managed properties home.

Last fall, the GoA unanimously accepted all 19 recommendations of The Affordable Housing Review Panel report. These recommendations demonstrate that bold action and investment are needed to transform the delivery of affordable housing and support vulnerable Albertans and meet the growing need for affordable housing forecast to exceed 100,000 households in Calgary by 2026. The current budget does not indicate a commitment to such a bold approach.

We understand this budget is interim until a new provincial strategic plan for housing is developed later this year. No households are anticipated to be impacted at this time, however, CHC will continue to monitor the budget and any impacts to households throughout the year.

The following is an overview of the announced budget, Calgary Housing Company allocations, and the anticipated impact on Calgarians in need of affordable housing.

Reinstatement of Rent Supplement Program Funding:

• • In Budget 2019, the GoA announced a reduction in funding of $16M over 2 years, Province wide. As a result CHC’s rent supplement program was closed to new intake.
  • Budget 2021 includes an announcement of a $16M reinstatement to the Province-wide Rental Assistance (rent supplement) program budget.
  • Budget 2021 does not specifically indicate a dollar allocation for CHC, but states that funding has been restored back to Budget 2019 levels. We look forward to further discussions with the GoA to understand CHC’s specific allocation and the new program design.

Secure Funding for City Owned Housing (Community Housing Portfolio):

• • In 2020, The City of Calgary, and the GoA reached a four-year $34M operating and capital funding agreement to enable the continued provision of affordable housing for over 1,000 households. These homes are managed by Calgary Housing Company.
  • The certainty of funding provided by the new agreement supports a sustainable future and allows CHC to maintain the existing supply of housing and continue to provide homes to low and moderate income Calgarians in need.

Flat-Lined operating Budget for Provincially Owned Social Housing:

• • CHC is receiving a flat lined operating budget of $11.99M for provincially owned social housing, despite the moderate 5% increase province-wide in operating funding.
  • Social housing is the deepest subsidy affordable housing serving tenants most in need of housing support. The average monthly rent is $380.
  • While we recognize the current economic environment, continued flat line budgets erode our ability to operate.
  • No households are anticipated to be impacted at this time.

Reduced Capital Maintenance and Renewal Funding for Provincially Owned Social Housing:

• • For the provincially owned social housing portfolio, CHC will receive $0 for repair and lifecycle maintenance and about 50% of our request for unit turnover funding.
  • Although no households are anticipated to be impacted at this time, this funding is insufficient over the long term to support lifecycle projects and suite renovations to ensure that homes meet the Alberta Minimum Housing and Health Standards, and homes remain open and available for Albertans.
  • CHC has been requesting significant increases in capital funding to address decades of underfunding for properties mostly built in the 1970s and 80s. We will continue to advocate for this funding.
  • The Province does have a fund in place if required for any emergency repairs in 2021, to be considered on a case-by-case basis.

No New Funding for Affordable Housing Development:

• • Budget 2021 contains no new capital funding for affordable housing development beyond what has already been committed while the need for more affordable housing remains great.

Background

Rent Supplement Funding

• The Rent Supplement program provides a supplement based on same criteria as the Social Housing program.
• Recipients are able to locate a rental opportunity that meets their needs in the private rental market and rent supplement funding offsets a portion of their rent costs. The value of the benefit is directly comparable to other housing programs.
• A key value of the program is enabling Calgarians with needs not met by CHC’s housing inventory to find appropriate housing – accessible units, desired location, more bedrooms, etc.
• Today, the average monthly subsidy in the private landlord rent supplement program is $725 and in the direct to tenant rent supplement program, it is $572 indicating a significant demand for deep subsidies.

Operating Funding

• Operating funding covers day-to-day costs such as administration, utilities, insurance, cleaning and security.
• This funding enables CHC to maintain and operate nearly 4,000 homes for low and moderate income Calgarians, for which the Province has funding responsibility.

Capital Maintenance Funding

• Capital maintenance funding pays for maintenance work when units are vacated to ensure they meet minimum housing standards, as well as lifecycle replacements, such as a new roof or furnace.
• Capital maintenance funding is for the same 4,000 homes for which the Province has funding responsibility.

Funding for New Housing Supply

• Across Canada, non-market housing represents 6.0% of housing stock on average. In Calgary, 3.5% of housing is non-market. In Calgary alone, 2,000 new units per year are required to keep pace with growing demand for affordable homes.
• The City of Calgary has a plan to develop 1,000 more homes over 10 years, however this plan requires Federal, Provincial and City investment.
• Through The City’s Corporate Affordable Housing Strategy, the City is also supporting non-profit and private sector developers to increase the supply of affordable housing.
• In order for Alberta to leverage current and future Federal capital via the Rapid Housing Initiative (RHI), new investment will be required to ensure the new homes for people who are experiencing homelessness and critical vulnerabilities have the rent and social supports required to remain stably housed.
• The City’s COVID-19 Community Affordable Housing Advocacy Plan seeks to create 600 new homes for Calgarians exiting homelessness through a combination of new units, rent supplements into private rental and support funding to ensure people receive the services necessary to remain housed.

The Future of Calgary Housing

The new Community Housing (city owned) portfolio operating and capital funding agreement signed last July guarantees certainty of funding for over 1,000 affordable homes. This certainty supports a sustainable future and will allow CHC to maintain the existing supply of City owned social housing through a social mixed-rent model and continue to provide homes to low and moderate income Calgarians in need.  These types of agreements will help CHC to become well positioned to continue transitioning from a social housing regulator to a mixed income social enterprise with less reliance over time on government funding to achieve its vision and mission, while continue to serve those in affordable housing need.

CHC will continue to look for opportunities to provide input into the implementation of The Affordable Housing Review Panel report recommendations, and reinforce the need for bold investments to provide the essential social infrastructure of affordable housing in Alberta.