The post Review of Affordable Housing Funding in Alberta Budget 2022 appeared first on Calgary 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.

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Province Accepts Recommendations – New Strategy to be Released in Spring 2021

Significant changes may be on the horizon for the organization, operation, and funding of affordable housing in Alberta. The potential for these changes is contained in 19 recommendations of a report released and endorsed by the government of Alberta on December 11.

There are 19 recommendations for Alberta’s affordable housing system contained in the final report of the Alberta Affordable Housing Review Panel which was released Dec. 11.

Download the panel report

The report identifies a number of principles on which the recommendations are based. These include: bold action, fairness, equity and inclusiveness, one size does not fit all, and efficiency, sustainability and financial responsibility.

“The panel’s recommendations focused on shifting the province’s role from owner and controller to that of partner and funder, changing programs to support Albertans, not buildings; drawing on local and private sector expertise to provide more housing options; and updating regulations to encourage innovation and reduce administrative red tape.” said the government in its announcement.

The recommendations can be summarized as:

• Develop a provincial strategic plan for housing.
• Create a plan to manage and transfer provincially owned-land and buildings.
• Build the capacity of housing providers.
• Provide a rent subsidy for Albertans who need temporary support but are not eligible for existing programs.
• Support innovative approaches to housing, such as mixed-income, mixed-use.
• Simplify processes for applicants, tenants and housing operators.

In releasing the report, the province accepted all 19 recommendations and indicated “work is already underway on a strategy to outline a shared vision for affordable housing and to map out when and how the government will act on the panel’s advice”. A strategy is to be released in Spring 2021.

“Affordable housing is critical to create inclusive communities and is part of Alberta’s Recovery Plan to guide economic prosperity. Advice from the Affordable Housing Review Panel will help the government renew the provincial affordable housing system – which has not changed structurally for more than two decades – so it can better serve Albertans in need and make the best use of taxpayer dollars,” said Josephine Pon, Minister of Seniors and Housing.

In response to the report and the recommendations, Calgary Housing Company reiterated the critical importance of affordable housing for thousands of Calgary families and individuals and the importance of finding ways to increase the amount of affordable housing in the community.

“We thank the Panel for their work and applaud the Government of Alberta for prioritizing affordable housing,” said CHC President Sarah Woodgate, “We look forward to continuing to work closely with the province to ensure we can collectively meet the needs of Calgarians to live with dignity in a home they can afford.”

Earlier this year, CHC and The City made formal submissions to the panel.

CHC’s submission had four key recommendations:

1. That the province invest in maintaining existing affordable housing
2. Support for new mixed-rent housing models through operating agreements that provide adequate operating funding, predictable capital funding for new housing, and exemption from property tax for non-profit housing providers
3. Funding for rent supplements
4. A review of social housing regulations to reduce red tape and make the system more responsive to citizen needs

The City of Calgary submission had three primary recommendations:

1. Uphold Provincial obligations for affordable housing through investment in the sector
   1. Capital funding for new building and transfer of viable assets at below-market values
   2. Property tax exemptions for non-profit housing providers and income tax modernization
   3. Partnering with municipal and Federal governments to streamline funding program applications
2. Create a citizen-centric housing system
3. Help facilitate private sector involvement

Read about the CHC and City submissions and view supporting documents here: CHC Story on Panel Submissions

Both submissions also endorsed the COVID-19 Community Affordable Housing Advocacy Plan that calls for $590M in funding over the next three years to create more than 5,000 new affordable homes in Calgary. That plan, developed by a committee representing more than 40 Calgary organizations including private, public and non-profit sector participants, includes a call for $240M in funding for 22 shovel-ready projects that would provide over 1,800 new homes as well as another $275M over three years to trigger $350M in federal funding that would result in an additional 3,300 affordable homes.

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On Monday, Sept. 21, the Federal government through Canada Mortgage and Housing Corporation announced $1B for Affordable Housing across Canada in the Rapid Housing Initiative (RHI), the latest program under the National Housing Strategy.

Details of the Federal announcement are yet to be released, but highlights of the new CMHC program include:

• $1 billion for the construction of modular housing, the acquisition of land, and the conversion of existing buildings to affordable housing to enable the rapid creation of up to 3,000 new affordable housing units across the country while helping to stimulate the economy;
• An additional $236.7 million through Reaching Home: Canada’s Homelessness Strategy to help extend and expand the emergency response to the COVID-19 outbreak. (In addition to the $157.5 million announced in April 2020.)

This program aligns well with the COVID-19 Community Affordable Housing Advocacy Strategy. That plan was recently endorsed by members of Calgary City Council at the Intergovernmental Affairs Committee.

“Mayor Nenshi and his office team have been drivers of this plan and championed advocacy with Federal and Provincial officials,” says Calgary Housing’s Manager of Affordable Housing, Bruce Irvine, “we are grateful for this leadership on behalf of low income Calgarians and those experiencing vulnerabilities including homelessness.”

Calgary Housing Company is continuing to work with community and government partners to advance the case for more investment in affordable housing.

View the Public Announcement on the CMHC Website.

Media Coverage:

• Globe and Mail
• National Post
• CTV News
• Global News

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