Rent hikes loom for thousands

Federal grants expiring could affect the poor


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It's being billed as Winnipeg's next housing crisis -- the slow expiry of hundreds of federal housing grants that could mean rent hikes for thousands of poor Manitobans.

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Hey there, time traveller!
This article was published 16/08/2013 (3391 days ago), so information in it may no longer be current.

It’s being billed as Winnipeg’s next housing crisis — the slow expiry of hundreds of federal housing grants that could mean rent hikes for thousands of poor Manitobans.

The grants, which date back to the 1980s and early 1990s, have already begun to expire, and could affect as many as 17,000 units built and managed by non-profit housing agencies. Another 17,000 Manitoba Housing units built with federal help a generation ago are also affected.

It’s a national problem that has received little attention.

Already, about $10 million in federal housing money has evaporated from the province, one apartment block or seniors home at a time. By 2018, that dollar figure will double. That has housing advocates and the provincial government worried rents will spike, affordable units will shrink and Winnipeg’s housing shortage will worsen.

“It just means losing a huge public resource that we need way more of, not less,” said Clark Brownlee of Winnipeg’s Right to Housing group. “It’s grim.”

Lawrence Poirier, manager of Kinew Housing, said his organization will lose federal subsidies for 380 units by 2017, and has already had to turn to the province for help. He said expiry of the federal subsidy was part of the funding agreements signed years ago with the Canada Mortgage and Housing Corp., so it’s difficult to criticize the federal government now. But the result is a scramble for cash among city housing agencies.

“It’s a big issue,” said Poirier. “I refer to it as the next housing crisis.”

The issue illustrates the quagmire of red tape that comes with low-income housing, a service governments have increasingly fobbed off on non-profit agencies that cobble together a host of grants and subsidies to renovate or build rental units for the poor. The dwindling federal funding is also delayed blowback from Ottawa’s decision in the early 1990s to effectively end funding for housing across Canada.

Years ago, in the 1980s and early 1990s, the CMHC helped dozens of Winnipeg non-profit housing agencies build affordable units. The CMHC provided long-term mortgages and topped up agencies with operating subsidies since the rent charged to low-income people never came close to covering the cost of managing and maintaining an apartment building. Once the mortgages are paid off in 20, 25, 30 years, as they are starting to be now, the operating agreements end, along with the subsidies.

“Once the operating agreements mature, the obligations of the housing provider as well as the funders will have been fulfilled,” said the CMHC in an email statement.

The idea was that, by this time, the buildings would be sustainable with rent alone, especially if agencies are no longer making monthly mortgage payments. That’s the case for some larger buildings, or buildings with a mix of market rents and affordable units. But many agencies that help the poor can’t make the numbers work without federal cash.

“If these buildings are to be sustainable, they’ll have to charge market rents, and that’s exactly what we don’t want,” said Dianna May Hocaluk, executive director of the Manitoba Non-Profit Housing Association.

It’s a simmering problem across Canada. New Brunswick, for example, has more than 370 such federal operating agreements covering nearly 5,300 units expiring between now and 2030.

As it did for Kinew Housing, the Manitoba government has quietly stepped in with cash to replace the federal subsidy. “That’s a commitment we’ve made,” said Housing Minister Kerri Irvin-Ross.

The Manitoba Non-Profit Housing Association is particularly worried small non-profits, with just one seniors home or one rent-geared-to-income building, won’t know their federal subsidy is about to disappear and need help determining whether a housing project is still financially viable — something the MNPHA is trying to offer.

But Hocaluk said Ottawa’s refusal to create a national housing policy, the expiry of hundreds of funding agreements and Winnipeg’s already brutal rental market is conspiring to create a crisis.

“It’s just a domino effect,” she said.

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