Thank you, Mr. Chair.
Good afternoon.
Thank you for inviting West Neighbourhood House here today.
I have a brief that I sent in on Friday with nine recommendations. It's being translated for you. I don't know if you have it yet.
West Neighbourhood House is a multiservice, not-for-profit organization serving about 15,000 to 20,000 individuals each year in downtown west Toronto, including the Davenport riding ably represented by MP Dzerowicz here. We work with people experiencing homelessness, with low-income people and families, and with seniors. Many of those seniors are cash-poor but housing-rich.
Despite our name, West Neighbourhood House, we currently don't provide shelter or housing, but I will describe our effort to do so in a few minutes.
First, I want to speak about building new housing supply for lower-income people, including new entrants into the labour market such as young adults and newcomers.
Canada is not a pure democracy; we are a parliamentary democracy with a Charter of Rights and Freedoms that protects minority rights. Canada also doesn't have a fully free market; we have regulations that protect consumers and citizens.
While not perfect, Canadians have found ways to thread the needle between freedom and the protection of people when they are vulnerable. One of the ways Canada does this is through its large and vigorous not-for-profit, for-public-benefit sector.
Having low-income people housed appropriately is a public benefit. We all benefit from having young adults and newcomers able to get and keep work because they are housed and stable. We all benefit from having workers live near their workplaces and not have to lose hours of their daily lives in transit. We all benefit when children from low-income families have a stable and appropriate home.
We recommend that the federal and provincial governments invest more in not-for-profit provision of housing, separate from for-profit housing. The opportunities in the not-for-profit include operating affordable housing and/or supportive housing, co-operatives, and community land trusts for keeping land as a community asset.
Non-profits bring a number of assets to help the affordable housing crisis. Not-for-profit charities are mission-driven, not profit-driven. Assuming that profit expectations are approximately 5% to 8% return or more, this is a significant savings to the public purse. Many not-for-profits own land that can be used or intensified for affordable housing with the right funding in place. Charities have a moral and legal asset lock to ensure public benefit for perpetuity, justifying investment for a long-term payoff for the community.
To give you a sense of the investment needed, I'll share a West Neighbourhood House example. We have a half acre of land worth $15 million, which we want to contribute to affordable housing. Our pro forma to build 76 units—including 36 two-bedroom or three-bedroom units for families—of moderately affordable housing at 80% to 100% of the local median market rate shows a total cost for the housing at $52 million. The rents over 50 years could sustain about a $30-million mortgage. We have $4 million in development fee waivers from the City of Toronto. We now have approximately $5 million of savings in GST and HST exemptions. Regardless of these inputs, there is still a gap of $22 million. This housing is a public benefit that needs investment, we would argue, from a revitalized national housing strategy.
From our experience, the national housing coinvestment fund needs a complete rethink and stable rules. In addition, we've not seen significant or sustained benefits from the much-vaunted private-public partnerships of investment by different levels of government, with many short-sighted terms of affordability for only 10 or 15 years.
There are promising initiatives such as the federal rapid housing initiative, which I have heard other witnesses speak of as well. It is a really great program. The federal government covers most of the capital costs. By reducing or eliminating the need for debt financing for affordable housing, we'll have freed up funds for additional affordable housing or other priorities. For our project alone, a $19-million mortgage would cost an additional $24 million in interest over the 50 years.
Building housing is expensive, but the cost of not building affordable housing is also very expensive. The City of Toronto has just released some numbers about the financial costs of shelters and hospitals in comparison, where people who are unhoused end up. It's much higher in the long run, and there are additional costs to the quality of people's lives in those places.
Given that shelter and hospital costs are mostly within provincial and municipal jurisdictions, there is a clear financial case and incentive for different levels of government to co-operate with regard to affordable housing. One example is addressing vacancy decontrol. That would have an immediate benefit.
Finally, I want to, as other witnesses have done, also offer a recommendation about stemming the losses of currently affordable housing. We recommend a tax deferral or forgiveness for private landowners who sell their multi-unit residential buildings to a not-for-profit. This would counterbalance the investor-driven takeovers of relatively affordable rental buildings much more affordably—at 30% to 40% lower cost than that of newbuilds.
Thank you again for including West Neighbourhood House today.