That approach actually does not work. That's an example of a situation where Canada is too specific in its judgment.
Personally, I would really like the government to determine that the money it is giving must be spent on households that have a core housing need or must increase the number of households receiving assistance. What does not work in what you are describing is that, currently, there are municipalities and territories where the needs are much greater than 20%, but there are others where the needs are less than 20%. Are we going to start building adapted or adaptable housing for communities that do not need it, whereas elsewhere we do not have enough money to build enough of it? Each situation is best placed to provide us with that information.