Canada’s big-city mayors are taking on a new battle: low-cost housing.
And they have kicked off a campaign to persuade the federal government to continue a decades-old form of support for subsidized housing that is used to reduce the rent for 600,000 households.
“There’s $500-million a year in housing investments expiring in 2014. That’s the big bombshell that’s landing,” Vancouver Mayor Gregor Robertson said from the Federation of Canadian Municipalities convention in the city on Thursday.
Mr. Robertson is the chair of the Big City Mayors’ Caucus, which represents the country’s 22 largest municipalities.
“Until now, we’ve been focused on infrastructure. That work culminated in the last federal budget. Our next priority now is housing. It’s a big complex challenge.”
The problem for many social-housing units is that they were built under agreements with the federal government that they would get subsidies for the term of their mortgages.
When those mortgages expired, 30 or 40 years later, it was expected that the apartments could still be rented out at low rates because the loan payments would have ended.
But many of those buildings require substantial renovations now.
So, without ongoing subsidies from the federal government, operators – non-profits, co-ops and local governments – will have to forgo maintenance or start charging more rent to pay the bills.
Many non-profits and co-ops operate on a model in which some renters pay full market rent, some get a small subsidy and others get a much larger subsidy. Having one-third of each type of renter has been seen as the norm.
But as operators get squeezed to meet new expenses, they are forced to rent more of their units to those who can pay market prices and provide fewer subsidized units.
Some organizations will be able to continue without too much change, either because they built up reserves or are not facing serious maintenance issues.
But about a third of the units will likely be at risk, according to a national study by Ottawa-based housing expert Steve Pomeroy.
Mr. Robertson said he will talk to federal ministers James Moore and Denis Lebel during the FCM convention.
He will also meet with Liberal Leader Justin Trudeau and NDP Leader Thomas Mulcair.
“The outreach is to all the stakeholders to get the conversation rolling,” he said. “We will need changes in the 2014 budget. And, with a federal election in 2015, we need all the parties to recognize the urgency of this.”