Build Canada Homes Submission

Recommendation: The Social Housing and Human Rights Coalition recommends amending Bill C-20 to include “accessible social housing”, in recognition that social housing is an essential component of national housing policy.

Build Canada Homes Act and social housing

The Build Canada Homes Act establishes Build Canada Homes as a Crown corporation, with “the purpose to promote, support and develop the supply of affordable housing in Canada and to promote innovative and efficient building techniques in the housing construction sector in Canada.”

The Social Housing & Human Rights (SHHR) coalition is concerned that the BCH Act does not explicitly include accessible social housing as a critical component of the Crown’s mandate. The Organization for Economic Cooperation and Development (OECD) describes social housing as “an important dimension of social welfare policy and affordable housing provision”.  The OECD notes that social housing is in decline in most countries, contributing to the crisis in housing affordability.  By noting social housing in the Build Canada Homes Act, the government of Canada will acknowledge the importance of social housing as part of a comprehensive approach to addressing housing need in Canada.

Background information: The SHHR coalition is a group of organizations and individuals concerned about the lack of deeply affordable rental housing for low-income individuals and families. In November 2023, the SHHR campaign officially launched focusing on the expansion of social housing – that is public, non-profit, and co-op owned housing for low-income renters where rents are set at less than 30% of household income, or social assistance housing allowances, in perpetuity.

In April 2023, over 100 researchers and advocates from across Canada attended the SHHR conference in Winnipeg. Our synthesis of the vast research on housing precarity found consensus that the ongoing decades-long approach of relying on the private sector to solve all housing issues has not worked. Conference participants identified many strategies that must be implemented simultaneously to address housing needs, including rental assistance, rent regulations, and wrap-around supports.

There was overwhelming agreement on the need to prioritize government action to expand and maintain the social housing supply, recognizing that this was one critical area of affordable housing for which there was no focused national campaign, and while many OECD countries are expanding the supply of social housing, Canada is moving in the opposite direction. The OECD average is 11% of housing supply, compared with less than 4% of housing supply in Canada. Conference participants collaborated in the development of a measurable call to action. SHHR continues to call on the federal government to invest in social housing as an essential component of its response to the growing housing crisis.

The coalition has determined that at a minimum, the government of Canada must set the explicit goal to:

1. Create a minimum of 50,000 net new rent-geared-to-income accessible social housing units each year for 10 years, starting now. These units should be targeted for those experiencing core housing need and homelessness and have rents permanently set at no more than 30% of household income or social assistance housing allowances.

2. Invest in the acquisition, construction, operation, and maintenance of new and existing public, non-profit, and cooperative-owned housing that meets the unique and varied requirements of people experiencing core housing need and homelessness.

Defining social housing in relation to affordable housing

The SHHR campaign defines social housing as housing that exists outside of the market. It cannot be used for speculation or to generate wealth. It can be owned by public, non-profit or co-op housing providers. It cannot be owned by private housing providers. Agreements between governments and housing providers limit how the property can be used, and provide subsidies tied to the unit to ensure rents are geared to household income or set at social assistance housing allowances for those who are eligible. Unlike non-market housing more generally, social housing is guaranteed to be affordable to the renter household, and is specifically targeted at low-income renters and people experiencing homelessness.

The Canada Mortgage and Housing Corporation (CMHC) considers housing to be affordable if it costs less than 30% of a household’s total income before taxes. In most provinces and territories, social housing rents are set at less than 30% of household income or at social assistance housing allowances. In Quebec, the threshold is less than 25% of household income and this must be maintained. Social housing is different from affordable housing, which can include both non-market and for-profit housing with varying rent definitions across governments and housing programs. These definitions don’t often align with CMHC’s definition and produce rents that are typically more affordable than market housing but still too high to be affordable to the lowest-income households. BCH has developed another definition, defining affordability through 5 regionally determined income bands. BCH requires proponents to demonstrate how they will create housing within these bands, but there are no targets specific to housing development for those in the lowest income bands which would most closely align with social housing criteria.

Expanding the social housing supply requires capital investments so new housing can be built and existing properties can be acquired/repurposed. New and existing social housing also requires ongoing subsidies to support the costs of operating while charging rents geared to income. Operating costs may include community-led, culturally appropriate services for tenants. Finally, social housing requires ongoing capital investments to maintain its quality. Canada is losing social housing units because of expiring operating agreements and inadequate investments in the maintenance of existing properties, among other factors. The existing supply must be maintained to ensure that new units lead to an increase in the overall stock of social housing. The federal government must work with other levels of government to develop social housing programs that cover all these costs. Capital programs will not produce social housing if they fail to include ongoing operating subsidies.

Federal investments in Social Housing

Canada has a strong history in building and sustaining social housing. The most significant and comprehensive investments were made between 1950 and 1985. Since then, the federal government has invested very little in social housing, focusing instead on market and affordable housing programs for middle and high-income households. Bill C-20 risks continuing this failed trajectory because it does not specifically note a commitment to social housing.

Although the 2017 National Housing Strategy (NHS) represented a historic federal investment in housing that was intended to address needs across the affordability spectrum. It was designed to produce very little social housing and has therefore produced few units accessible and affordable to low-income households and people experiencing homelessness.^[1] For example, the Rapid Housing Initiative (RHI) was the only NHS program designed to produce social housing. It is the only program that targets non-market housing providers exclusively and that sets affordability criteria based on the household’s income. The most recent NHS progress report shows that only 10% of funding allocated through the Strategy’s four largest programs has gone through the RHI, which has produced only 4% of the 226,086 units created. The Apartment Construction Loan Program is the largest NHS program. The bulk of its funding supports for-profit housing providers. Research has shown that this program has had a very limited impact on people experiencing core housing need and homelessness. In fact, one report found only 3% of homes financed through this program met the needs of low-income households.^[2] Unfortunately, Canada’s current housing investments continue to overwhelmingly support market strategies that fail to address the human right to housing. Canada’s NHS will not achieve its goals to end chronic homelessness by 2030 and remove 530,000 families from core housing need without investing in social housing.

Previous Housing Minister, Sean Fraser, publicly recognized that the federal withdrawal of social housing funding has contributed to the current housing crisis.

Moving Forward with Build Canada Homes.

Establishing the Build Canada Homes Corporation provides an opportunity for the government of Canada to demonstrate its commitment to developing housing that is accessible and affordable for low-income renter households. To do so, the BCH Act must explicitly name social housing to signal to other levels of government and developers that social housing is a government priority.

Experts, advocates, and people with lived experience around housing insecurity and homelessness agree that the federal government, in collaboration with governments across the country, must address this crisis by prioritizing the expansion and maintenance of social housing.

In May 2023, SHHR participants reached consensus on the call to action outlined earlier in this submission. The SHHR coalition calls on the government of Canada to include accessible “social housing” in the Build Canada Homes Act to demonstrate its understanding that, as described by the OECD, “social housing” must be part of Canada’s future social housing policy.^[3]

In doing so, it will serve to facilitate future housing development to meet the goal of adding a minimum of 50,000 social housing units annually for 10 years. The federal government has projected the need to expand the overall supply by building 5.8 million homes over the next decade (580,000 per year). Since 33.5% of households are renters, 194,300 of this supply should be rental. Approximately one quarter of renters are in core housing need, so a minimum of 48,575 (rounded to 50,000) should be at rent-geared-to-income rates affordable to low-income renters. This more than triples the target in the NHS to build 160,000 affordable homes and redirects the focus from modest affordability to deeply affordable at 30% of household income. This amount is relatively consistent with calls to double the number of social housing units to more closely align with the OECD average.

The expansion and preservation of social housing across Canada will require federal leadership in collaboration with other levels of government. The proposed amendment to Bill C-20 can set a foundation for progress. Although provincial and municipal governments are known to push for funding without strings attached, the SHHR coalition strongly recommends the federal government do the opposite to ensure the expansion of housing owned by public, non-profit, and co-op sectors with rents set at less than 30% of household income. Provincial, territorial, and municipal levels of government all have important roles to play in the expansion and preservation of social housing. They must be held accountable for every dollar they receive from the federal government to ensure that social housing is expanded from coast to coast to coast.

Recommendation:  Amend Bill C-20 to include “accessible social housing”, in recognition of social housing as an important component of housing policy. This would entail 4 minor amendments as follows:

1. The purpose of the Corporation is to promote, support and develop the supply of accessible, social and affordable housing in Canada and to promote innovative and efficient building techniques in the housing construction sector in Canada.

2. Powers 20 (c): invest in persons or entities carrying on activities in respect of the supply of accessible social and affordable housing in Canada, including by acquiring their shares or securities or by making a loan or guarantee to the person or entity.

3. Powers 20 (d): (d) invest in ventures or enterprises, including through the acquisition and development of property, that are likely to benefit the supply of accessible social and affordable housing or the adoption of innovative and efficient building techniques in Canada.4. Summary: This enactment establishes Build Canada Homes as a Crown corporation. The purpose of Build Canada Homes is to promote, support and develop the supply of accessible social and affordable housing in Canada and to promote innovative and efficient building techniques in the housing construction sector in Canada.