Human Resources Committee on Feb. 9th, 2017

[Daniel Shoag]

Yes, I think you're right; there's no reason for.... It doesn't cost a million dollars to build a house, right? There is some restriction in place that's keeping prices high.

The work I'm talking about is bigger-picture, I think, than some of the more direct...people in dire need. There are people who potentially have job opportunities in these expensive markets and are being kept out of Toronto or Vancouver because of the prices, so this is a poverty target on a different level.

Your question about what percentage must be affordable is, I think, an interesting one, and I will try to give you a more concrete answer. However, I think the biggest issue is not that the market is failing to provide affordable housing, because naturally it would fail to do it, as opposed to there being restrictions in place that prevent it from doing it.

If there are going to be only so many units in a city, and there is more demand in that city than there are available units, then the price will go up. One target is to say that of the existing units, we will say that a certain percentage needs to be affordable. Another thing would be to just increase the number of units. If more people want to live there, and more people have job opportunities, they are creating a way for them. That is a solution in which you try to increase the overall number of people.

[The Chair, Liberal, Bryan May]

Thank you.

We have a few moments left.

To your comment, Daniel, when you are doing some research on Canada to prepare for this committee, can you also look at the fact that Toronto specifically has eliminated a lot of the red tape that we're talking about? They've already cut all those fees, but they're still seeing the growth in housing prices. I just encourage you to look at that as well.

I want to give MP Sweet one more opportunity.

If you have any further questions, you have maybe two minutes.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Thank you very much, Mr. Chair.

Now I would like to make a distinction between social housing and affordable housing.

Earlier, I heard someone say that 50% of the population of the city of Saint John rents housing. So the rental market in your city is a major one.

There are things that the federal government could do to encourage the construction of affordable housing, for example, cutting the GST on the construction of housing of that kind. Do you have any other ideas on the matter?

Second, what could we do to keep those housing units affordable? Nothing stops a landlord from increasing the rent after five or 10 years. What ideas do you have about it?

[Kit Hickey]

Saint John is unique as well in that we have a very high vacancy rate. The fact that we have a high vacancy rate means that we do not have developers interested in coming in and developing new housing units. Unfortunately, that vacancy rate exists within that older housing stock and now are substandard to housing stock. That has created issues for us in that developers are not able to access financing as a result of the market. However, the provincial government, through the affordable rental housing program, the cost-shared provincial housing program, has opened it to private developers. They are able to access capital grant for affordable housing units for up to 50% of the development, as well as access the rent supplement program.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

I am going to interrupt you, because the time I have is almost up.

Have any conditions been imposed on builders or developers in order to keep the cost of the housing affordable in the long term?

Do these incentives include clauses to keep the housing cost low for a long period?

[The Chair, Liberal, Bryan May]

Please make it a brief response. Thank you.

[Kit Hickey]

With the capital grant program, there is a required forgiveness period on the capital grant, and depending on the amount of money it could be a 15-year affordability. The rent supplement agreements are typically in place for 10 to 15 years, so that does protect the affordability for a period of time.

[The Chair, Liberal, Bryan May]

Thank you very much.

I want to thank all of you for being here today to share your experience and thoughts on these issues. This is a very big problem. It's a nationwide issue with regard to affordable housing. Again, I thank you very much.

I want to thank all of the committee members, all of the folks who make these meetings possible, and of course I want to thank the individuals who came to witness today. We've seen some people coming and going, and it's good to know that this is really an issue that is at the heart of what we're doing here in this community.

Thank you very much.

The meeting is adjourned.