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Spending an extra $46 per Canadian a year on affordable housing could dramatically reduce homelessness, a new research report concludes.

Existing intervention programs can only go so far if those who find a way off the streets or out of shelters can't afford their own place to live, say researchers from York University and the Canadian Alliance to End Homelessness. Their annual State of Homelessness in Canada study was published Wednesday.

With a budget surplus on the horizon, it's time to return to the days when federal cash was directly spent on building those places, said Stephen Gaetz, the director of the Canadian Observatory on Homelessness at York and one of the lead authors of the study.

An estimated 235,000 Canadians a year experience homelessness at a cost to the economy of $7-billion. Despite $2-billion earmarked in federal funding, nationally the numbers still aren't moving down, the report said.

Affordable housing in Canada

Federal government subsidies for affordable housing, in billions (2013 dollars)

The main reason behind what seems to be an intractable problem is a 46-per-cent decrease in federal investment in affordable housing over the past 25 years, the report suggested. (Affordable housing is defined as shelter that doesn't cost more than 30 per cent of a low-income person's budget.)

Social housing units in Canada

Units funded by all levels of government combined

SOURCE: The State of Homelessness in Canada 2014

In 1989, $115 per capita was spent each year on adding to affordable housing stocks. Today, it's closer to $60 a year, while the Canadian population has risen 30 per cent, the report found.

Increasing the per-capita spending to at least $106 per Canadian – or $1.7-billion a year in federal funding – would allow for the construction of about 8,800 new units a year.

The money wouldn't just cover construction. Researchers are also proposing the creation of housing benefits similar to the existing $100 child care benefit provided by the federal government and tax credits, which would help those at risk of homelessness to hold on to their space.

While the national numbers on homelessness seem stuck, the report does note success with some specific community programs.

In 2008, the federal government contributed $110-million for a five-year research project to explore effective options to cope with mentally ill people who were homeless. The At Home/Chez Soi study found that starting with providing housing, and backing that up with support services, was more effective and cost-efficient at getting people off the streets than trying to treat them first.

The federal government has since expanded the program, committing an additional $600-million over five years.

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