Raise the (welfare) rent, inner-city advocates say
Monthly rate province pays same since 1992
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Hey there, time traveller!
This article was published 31/08/2012 (3751 days ago), so information in it may no longer be current.
This fall, housing activists want the Manitoba government to do something it hasn’t done since the New Kids on the Block topped the charts: Boost what welfare pays for rent.
A new lobbying effort, the latest in a years-long fight, is afoot to convince the Selinger government to hike the basic housing allowance given to welfare recipients, many of whom are disabled and can’t work. That rate stands at $285 a month, an amount largely unchanged since 1992 and only a fraction of what it costs to secure a decent apartment in Winnipeg’s tight rental market. Inner-city housing experts say it’s the single biggest thing the province could do to improve the slum housing crisis.
So far, agencies from inner-city non-profits to more conservative business and real estate groups have signed on to a campaign led by Make Poverty History Manitoba. They are asking for a commitment in this fall’s throne speech to boost the housing allowance, and real cash in next spring’s budget.
“The increase in rent has just really gotten out of pace and that gap is really having an effect on people,” said Marianne Cerilli, the policy and program analyst at the Social Planning Council of Winnipeg, which is also working on the campaign.
About 35,000 Manitobans are on income assistance and roughly 60 per cent of those are part of the disability program and are unable to work. Most of the rest are single mothers.
Advocates want the province to return to its pre-1992 policy of pegging welfare’s housing allocation to 75 per cent of average rents. In Winnipeg, that would boost the basic monthly amount to $522 from $285 for a one-bedroom. That increase would cost taxpayers about $19 million more a year.
The welfare allocation would still be about $200 below average rents, but it’s a practical, politically doable improvement, advocates say.
“At least, could we go back to what we had 20 years ago?” asked Clark Brownlee, a longtime advocate at a recent poverty event.
“People will still be living in crappy housing, but they will be in a better position than they are now.”
It’s not clear why the province has been so reluctant to raise the housing rate. In an interview, Housing Minister Kerri Irvin-Ross could offer no policy rationale, nor could provincial staff.
“Raising the basic housing allowance is a blanket approach that doesn’t necessarily address individual needs,” a provincial spokesperson wrote in an email.
The province’s welfare reform has focused largely on getting people off of welfare and into jobs, and housing advocates say the NDP has been unwilling to raise the housing rate for fear of the political backlash.
- Median market rent for a one-bedroom (April 2012): $697
- Median market rent for a bachelor suite (April 2012): $552
- Pritchard Avenue rooming house: $325-$350 a month
- Welfare housing allowance (single person): $285 including utilities
- Welfare housing allowance including top-ups such as RentAid (not available to everyone): $345
- Proposed increase to welfare housing rates (75% of median rent): $522 for a one-bedroom.
— source: Canada Mortgage and Housing Corp., province of Manitoba, Make Poverty History Manitoba
After years of government programs and millions spent, mostly by the province, there is still an affordable housing crisis in Winnipeg. Inner-city residents say it’s the single biggest issue they face — the lack of safe, clean, affordable rentals. Developers are building few apartments and virtually no affordable ones. A single mother looking for a one- or two-bedroom apartment in the $600 to $800 range is facing a vacancy rate of zero. And, since 1992, Winnipeg has suffered a net loss of 5,700 units thanks in part to the condominium phenomenon, a shortage made worse by the influx of immigrants. It’s been 20 years since the province significantly tweaked the welfare allowance for housing even though rents in Winnipeg have gone up as much as 70 per cent.
Most local housing experts say the federal government needs to get back into the business of fully funding affordable housing, especially since the crunch exists in nearly every city. That’s not likely to happen. But, there are some smart ways to tackle Winnipeg’s housing crisis, from innovative public housing projects to a unique-in-North-America inner-city renovation program some call a “game-changer.” Visit http://www.winnipegfreepress.com/special/bottomlines/ for a recap.
SOLUTIONS THAT WON’T COST YOU MONEY
Some of the big, obvious solutions to the affordable housing crisis, such as boosting the welfare housing allowance or building new social housing projects, cost taxpayers millions. The ultimate and trickiest solution is to get the private sector back into the business of building apartments, ideally affordable ones. That’s not happening in most cities in Canada. There’s been an almost complete failure of the market to create new rental units. To right the balance, the Right to Housing Coalition has created a menu of ideas that it has presented to the city and the province. Here are two big ones.
Making a series of tax tweaks to things such as the capital cost allowance and the sales tax charged on construction could spark an apartment building boom the likes of which Canada hasn’t seen in 40 years.
In the 1970s, there were as many as 100,000 rentals built in cities across Canada per year. By the end of the 1990s, that number fell to 5,000, in part because of a series of small tax changes that tipped the balance dramatically in favour of single-family home construction. Last year in Winnipeg, roughly 500 rentals were built, nowhere near demand.
Former NDP cabinet minister Tim Sale and an unlikely ally, Ladco president Alan Borger, crunched the numbers and came up with a half-dozen tax changes that could save developers more than $40,000 per unit. Those tax changes, along with better use of the tax-increment financing program, would allow developers to get a reasonable rate of return on their investments while building apartments someone earning an annual income of $30,000 or $35,000 could afford. Now, it takes an income of about $45,000 to afford a new two-bedroom apartment, putting those units out of reach for single mothers, immigrants, seniors and others who have low incomes.
Making the changes to the tax rules would require something that doesn’t happen easily — the co-operation of the federal and provincial governments. But the Right to Housing Coalition says the crisis demands governments set a target of shrinking the tax costs of affordable housing construction by 25 per cent in two years.
Manitoba Housing Minister Kerri Irvin-Ross says a new rental roundtable convened last year, which includes housing advocates and real estate associations, is considering some of the tax proposals.
DENSITY BONUSES AND INCLUSIONARY ZONING
This is a simple idea that’s been tried in American cities but not really in Canada yet. In exchange for city zoning approval, developers building a new highrise or suburb must agree to build a certain number of affordable units, perhaps 10 per cent. In exchange, the city might fast-track permits and approvals, waive development fees or sweeten the pot somehow. It would force developers to factor in something other than just lucrative, high-end houses and condos, and it fosters mixed-income neighbourhoods. Waverley West, the new suburb that is half-owned by the province, could have been the perfect place to test new zoning ideas, but there is virtually no affordable housing in Waverley West. Many advocates call that a missed opportunity.
Inclusionary zoning can go hand-in-hand with a density bonus, which would allow developers to build higher or denser than zoning rules stipulate in exchange for a certain number of low-income units.
Cities can also get the same result with less of a hammer. In Victoria, where the new Dockside Green development has sold out, the city asked developers to build 10 per cent affordable housing in the neighbourhood in exchange for a parcel of city land.
— Mary Agnes Welch