Strategy on housing and homelessness conflicted, confusing

Friday, August 31st, 2007

Harvey Enchin

Home for the homeless — under the south end of the Granville Street Bridge. Bureaucrats’ strategy fails to emphasize that homelessness is a public health matter, affordable housing an economic one. Photograph by : Peter Battistoni, Vancouver Sun

Metro Vancouver (a.k.a. the Greater Vancouver Regional District) has invited public comment on its draft regional affordable housing strategy, a dozen pages of bureaucratic bafflegab that purports to address the problems of homelessness and affordable housing.

It sets out three key goals: Increase the supply and diversity of modest-cost housing; eliminate homelessness across the region, and meet the needs of low-income renters.

These may sound like related issues to policy-makers, who seem able to lump anything and everything under the “sustainability” umbrella, but two of the goals (No. 1 and No. 3) are the same while two (No. 1 and No. 2) are quite distinct and require different approaches. Their inclusion in a single document confuses the causes and possible remedies the so-called strategy proposes.

What the strategy fails to emphasize is that homelessness is a public health matter, affordable housing an economic one. Yet the solution offered to cure the ills of both is wringing more tax dollars out of federal and provincial governments.

More than three-quarters of the homeless population has some sort of health problem, primarily mental illness and drug addiction. These people need treatment centres and supportive-living arrangements, not cheap accommodation. Projects such as Kindred Place — an 87-unit, $17.7-million supportive housing development under construction in downtown Vancouver — is an example of the collaborative initiatives that are needed to adequately address homelessness.

This is a joint effort by the provincial and federal governments, the City of Vancouver and Vancouver Coastal Health and represents the kind of partnership of housing and health providers that will enable those coming out of detox to leave behind their addictions, develop independent living skills and become part of mainstream society.

Vancouver bears a disproportionate share of the burden of homelessness, which is clearly a regional problem. The strategy would do well to encourage other Lower Mainland municipalities to carry more of the load by supporting projects such as the Riverview re-development — that would create a treatment and residential facility for the mentally-ill and addicts — in Coquitlam.

The strategy acknowledges the need to overcome NIMBY (not in my backyard) opposition by some local politicians, and it recommends increased funding for 5,000 supportive and transitional housing units, not just in Vancouver, but across the region over the next 10 years.

Affordable housing is another matter entirely. Affordable is defined as housing that has a carrying cost or rent that does not exceed 30 per cent of household income. By this measure, the qualifying income to purchase the average single-family home in Greater Vancouver in 2005 was $121,921, more than double the median income. The average townhouse requires income of $80,748 and the average two-bedroom condominium $66,916. According to the RBC affordability index, 70 per cent of household income is needed to service basic home ownership costs in Vancouver. Renters would have to have an income of $40,160 to rent the average two-bedroom apartment.

So the cost of housing — and of living — is far more dear in Vancouver than in most other Canadian cities. But people aren’t forced to live here; they can move. Not only is housing in Metro Vancouver expensive, governments exacerbate the situation with taxes, fees, regulations and restrictive land use policies.

But rather than pressing to reduce or eliminate these barriers, the strategy seeks to impose additional development costs and surcharges on various regional levies to raise $50 million a year to spend on social housing.

The principal reason moderate-cost rental units are not built is that, unlike condos, they don’t provide an acceptable return on investment. Piling on additional costs would seem counterproductive.

A proposal from the strategy that might gain traction, however, is a requirement that 15 per cent of units in a new residential or mixed-use development of 20 units or more be affordable units for rent or ownership. A similar plan in Chicago, where 10 per cent of units in certain projects of 10 units or more is expected to create 1,000 homes a year, was passed overwhelmingly by the Windy City‘s council. Developers can opt out of the requirement by paying $100,000 US per unit into a fund that would be used to create more affordable housing.

The Australian government is mulling a plan that would give investors in low-cost housing projects significant tax benefits. Development incentives like these, not increased costs, will spur construction of affordable housing.

In sum, public money spent on housing should be prioritized to get the mentally ill, addicted and infirm off the streets and into treatment and supportive accommodation.

With the exception of families facing problems of disability or chronic illness, using tax dollars to build homes for those who choose to live in Metro Vancouver but cannot afford to do so is public policy gone awry. Many salaried workers earn too much to qualify for government subsidies but are unable to afford a Vancouver lifestyle. They live elsewhere and either commute or find employment closer to their homes.

Rather than make poverty more appealing, governments should use public resources to raise people’s incomes through investment in education and skills training and provide sufficient support for those who need it to get it.

Governments seeking a magic pill to make housing more affordable might consider confiscating less of an individual’s hard-earned income.

The marginal personal tax rate in B.C. on the first $34,397 of income is 5.7 per cent. The federal rate is 15.5 per cent. That someone trying to scrape by on less than $35,000 a year could pay more than $7,000 in income tax is absurd.

Allowing people to keep more of what they earn will do more to solve the affordability problem than a smattering of social housing units.

© The Vancouver Sun 2007


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