By Sean Speer, Nov. 24, 2017, Special to Postmedia Network
The Trudeau government’s much-anticipated National Housing Strategy was finally released. What should people make of it?
We know what the Prime Minister thinks. He boldly called it a “once-in-generation” plan. But even accounting for the usual political hyperbole this seems like a bit of an overreach. The truth is the federal strategy makes some progress in key areas but is ultimately incomplete.
Canada’s housing continuum ranges from affordable housing to housing affordability. The former is about subsidized housing which is roughly 6 percent of the market. The latter refers to the affordability of market-based housing which covers the rest.
Both are important. But they’re different, require different thinking, and involve different policies. A comprehensive national housing strategy should logically cover both.
Here’s where Wednesday’s announcement is incomplete: It spoke extensively to affordable housing. But it’s largely silent on the market-based share. The result is an unfinished national housing strategy.
Of the affordable housing measures, the most promising is a new Canada Housing Benefit. The benefit will function like a voucher that’s tied to individuals and families rather than bricks and mortar. Recipients will thus be empowered to make housing choices based on employment, education, or other individualized considerations. Approximately 350,000 households are expected to ultimately benefit.
This is a big idea that should have broad-based support. It’s cheaper than government-run construction and operation of social housing. It can provide a boost to those who only need minimal financial support to cover their housing needs. And, most importantly, it can enable more mixed-income living rather than the housing segregation that tends to be associated with government-run housing. There are some outstanding questions, but the Canada Housing Benefit has a potential to be a major, new policy innovation.
Where the strategy is notably lacking is with regards to housing affordability in the market-based share of the housing market. It’s an odd omission for several reasons. Housing affordability has recently hit its worst levels in a quarter century. Market-based housing affects more than 90 percent of the market. And the federal government touches on it in various ways – from mortgage insurance to financial regulations to the tax system.
A principal reason though is that federal housing and homeownership policies have evolved over the years with little rhyme or reason. It’s not uncommon for housing-related policies to work at cross-purposes. One example: we’ve seen successive cases of mortgage rule tightening at the same time that the federal government has expanded tax incentives for first-time home buyers.
The national housing strategy thus represented an opportunity to bring greater coherence to federal policy. The government could have set out clear objectives around affordable and responsible homeownership, and taken action to ensure that its policies were properly aligned.
We recently set out recommendations in this regard – including a new matching fund initiative to help people save for larger downpayments and ultimately accumulate more housing equity. Yet instead the government inexplicably took a pass.
This isn’t about creating a false choice between affordable housing and housing affordability. It’s not to begrudge what the government did announce. There’s some real good here. But it’s to recognize that both are important and that a comprehensive housing strategy – certainly a “once-in-a-generation” one – must address the full housing continuum.
Sean Speer is a Munk senior fellow at the Macdonald-Laurier Institute.