Developers turn back on need for affordable units

Wednesday, March 31st, 2010

Housing struggles

Financial Post

The need for affordable housing in Canada is being ignored by developers and largely left to governments, those least able to do the job effectively, according to a Conference Board of Canada study released Tuesday.

The report, titled Building From the Ground Up: Enhancing Affordable Housing in Canada, says 20 per cent of Canadian households struggle to afford their homes because of lack of supply of affordable housing provided by the private market, to the detriment of national productivity and competitiveness.

The study urges developers, governments and civil society organizations to work together and highlights models for financing, building and operating affordable homes.

“The quality and cost of housing are major factors in the health of Canadians. However, about one-fifth of Canadian households do not have the resources to afford both good-quality homes and other health-enhancing expenditures, such as nutritious food or access to recreational activities,” said Diana MacKay, director of education and health at the Conference Board of Canada.

Although most developers tend to focus on building homes for high-income earners, the report says the private sector is by nature efficient and innovative, making it best suited to develop affordable housing.

Governments, however, should only be involved in “establishing building parameters and engineering deals to encourage the development of more affordable units, without directly taking part in the execution of projects,” the report said.

Meanwhile, non-profit developers and operators are efficient operators of affordable housing because they have low costs, a passion for their work, and “on-the-ground” perspective.

The Conference Board’s conclusions are based on an extensive data analysis and review of literature, as well as 65 interviews with experts and practitioners and 11 case studies of innovative practices.

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