Human Resources Committee on May 5th, 2022

[The Chair (Mr. Robert Morrissey (Egmont, Lib.)), Liberal, Bobby Morrissey]

I call to order meeting number 21 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Today's meeting is taking place in a hybrid format, as we have been for the last number of meetings. Members are attending in person in the room and remotely by using the Zoom application. For those attending remotely, to get the chair's attention, please used the “raise hand” icon at the bottom of the screen. For those members in the room, simply raise your hand to get my attention.

As well, this meeting is being held with interpretation services. If any member of the committee loses interpretation services, please indicate to me and we will suspend proceedings while we clarify the issue.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, February 3, 2022, the committee will commence its study of the housing accelerator fund.

I would welcome our guests. Each one will be given five minutes or less to give opening remarks.

We have Edith Cyr, general manager of Bâtir son quartier. From the British Columbia Non-Profit Housing Association, we have Jill Atkey, chief executive officer. From the City of Toronto housing secretariat, we have Abigail Bond, executive director.

We will start with Bâtir son quartier for five minutes, please.

[Edith Cyr, General Manager, Bâtir son quartier]

Good afternoon, Mr. Chair.

I thank the committee for inviting me to testify.

Bâtir son quartier is a social economy enterprise, a non-profit organization whose mission is to meet the housing needs of low- and middle-income households by building community housing. We have carried out 450 projects for a total of 14,000 housing units.

I will say a few words about the context, which is a major source of concern for us.

In addition to a significant rise in housing costs and low vacancy rates, we now have an increase in construction costs and rising interest rates. Low- and modest-income households are the hardest hit by this context.

For us, community housing is a defence against the insecurity the poorest households are experiencing. It proposes a lasting solution by providing affordable housing that is not subject to market fluctuations.

We were very happy to see that the government prioritized housing in the latest budget. However, I will take the liberty of submitting some recommendations related to three budget measures. It is a matter of increasing the supply, accelerating housing construction and supporting people who have housing needs.

Just increasing the housing supply does not automatically mean there will be more affordable housing or affordable rental housing. So it is essential that efforts at all levels—

[The Chair, Liberal, Bobby Morrissey]

Madame Cyr, the interpreter has asked if you would slow down in your comments, please. They are having difficulty following you.

[Edith Cyr]

Am I being asked to slow down?

I'm sorry, I feel rushed by the five-minute limit.

[The Chair, Liberal, Bobby Morrissey]

Yes.

[Edith Cyr]

It is essential for all the efforts made by all levels of government to prioritize the production and renovation of affordable rental housing. The market continues to produce on its own, without the government's help, new housing for households that don't really have difficulty finding housing.

Governments should also recognize the vital role of community housing organizations and their beneficial impact on Canadians. That recognition must translate into access to all measures and contributions that are necessary to keep paid rent at an affordable level for all community project housing.

Under federal funding for transportation, increased funding for rental projects could be possible for all new housing in the development sector focused on public transit.

Surplus federal properties have a solid housing development potential. We think a significant portion of new housing on those properties should be given to the community housing sector and be fully affordable. We think the government must be a model, an example, in this case.

Housing construction must be accelerated. Concerning the new $4-billion housing accelerator fund, we suggest that money be contributed directly to the creation of affordable housing instead of administrative functions.

Among the obstacles is the red tape involved in program administration. Accountability is clearly needed, but it can still be adapted and improved to achieve the objective of doing things better and faster.

Project selection through calls for proposals does not guarantee the government that the best projects will be selected. The outcome of the call will just be a reflection of the opportunities that arose when the call was launched. However, real estate needs predictability to direct opportunities toward concrete achievements. Ongoing intake is still the best option for managing the measures adopted for funding community and affordable housing.

The delivery of a real property project requires a critical amount of time it is now difficult to compress to respect all the constraints. However, the more projects are ongoing, the higher the likelihood of some of them being delivered over the short term. Other projects will follow, according to the constraints to be respected and problems to be solved. So it is desirable over the very short term that a number of projects be selected across various measures. The budgets for those measures should not be spread out over five years, but rather be made available in the first two years, so that, at the outset, enough projects would be selected and enable us to meet the established targets as quickly as possible.

Building subsidies are necessary for affordable housing to be produced, but they are insufficient for very low income households. The housing allowance program exists, but, once again, the subsidy levels cannot address the shortfall. We think it would be desirable for the government to increase its participation in the program.

That requires programs that are good at handling administrative issues, have an ongoing intake and a recurrence of those measures over the next few years to help us increase and accelerate housing construction.

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Cyr.

Next we'll go to Ms. Atkey from the British Columbia Non-Profit Housing Association.

Go ahead, Ms. Atkey.

[Jill Atkey, Chief Executive Officer, British Columbia Non-Profit Housing Association]

Thank you very much for the opportunity to speak to the committee today.

My name is Jill Atkey. I'm the CEO of B.C. Non-Profit Housing Association, which is the industry association for non-profit housing providers in British Columbia. I was also a panellist on the expert panel on the future of housing supply and affordability, which was appointed by the federal and provincial ministers of finance and which put forward a recommendation for a similar fund to encourage and incentivize housing supply.

I'll start out by saying that I absolutely support the comments of Edith. In my comments today I will raise six principles to consider in the design of the housing accelerator fund specifically.

First off, we need to reward the type of housing that we want to see more of in our communities. Some are going to argue that all supply is the right supply. I agree that this is true for rental housing. On ownership, we're seeing so much equity in the system that much of the new supply that's built gets consumed by existing homeowners who are buying second, third and fourth properties as investments. The acceleration fund should prioritize the type of housing we desperately need in our communities, which is affordable rental housing and family-sized housing.

The second principle I'd like to raise is to be cautious of a focus on unit counting. It's really important that government sets goals, and it has under this program. I speak from experience on this, as our advocacy has often fallen into a similar trap. A really strict focus on the number of units encourages developers to build and municipalities to approve studio and one-bedroom units and not a lot of two-, three- and four-bedroom homes or homes large enough for multi-generational households. The number of homes is important, but if incentives are on offer, the types of homes also matter.

Thirdly, the accelerator fund should require annual per-door incentives to be spent on affordable housing. If the accelerator fund includes per-door incentives, Canada should require that those funds be spent on affordable housing, which would help to close the gap on the national co-investment fund projects or even RCFI projects under the new criteria set out in our most recent federal budget.

Canada committed to building 50,000 new homes in the community housing sector over 10 years. We're not yet on track to meet this target. A move of tying annual per-door incentives to spending on affordable housing could help to fill that gap by requiring municipalities to spend those dollars directly on affordable housing.

Fourth, reward municipalities that create the right conditions for non-profit housing development. When a non-profit project enters the municipal approvals process, it's sensitive to three critical risks: time, cost and uncertainty of approval. A rezoning—and many of our projects go through rezoning—will add months to the project and add costs in the range of $500,000 to a million dollars, all at the expense of the tenants who will face increased rents as a result. Recent bylaw amendments in municipalities like Victoria and Vancouver mean that non-profit developers can bypass rezonings and public hearings in many situations, eliminating or at least reducing all three of those risks. Municipalities that put forward such actions to eliminate those three barriers and make non-profit and co-op housing allowable as of right now should be rewarded by this fund.

Fifth, encourage intensification of existing residential areas. Too much of our residential-zoned land in large urban centres is zoned exclusively for single-family housing, pushing new supply into condo and rental towers along polluted and busy arterial roads. Homeowners are resisting even moderate density increases in their communities. The accelerator fund should incentivize intensification of these inclusionary zones and disincentivize new greenfield development, particularly in the midst of a climate emergency.

Finally, require strong protections for renters. A great deal of our new housing supply in urban centres comes through the redevelopment of existing properties. This is particularly true for rental development. This is in part because of the exclusionary zoning I mentioned previously, and in part because the assets are aging. With new incentives like the accelerator fund, this process of redevelopment will intensify and displacement will become an even bigger concern. The fund should require that strong tenant protections are in place for redevelopments.

While the government will surely have many additional considerations when designing the accelerator fund, these few guiding principles will help steer the program in the right direction.

I thank you for your time today, and I'm happy to answer any questions when the time comes.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Atkey.

We will now go to Abigail Bond from the City of Toronto. I would ask you to please speak slowly, as the interpreters do not have a copy of your text.

[Abigail Bond, Executive Director, Housing Secretariat, City of Toronto]

Okay.

Thank you and good afternoon, everyone, from Toronto. This is the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat people.

The housing affordability crisis is affecting Toronto significantly, and playing our part in addressing it is a priority for the City of Toronto. We have almost 9,000 people each night staying in our shelter system, and Toronto has the highest number of households in core housing need of any major city at 23%, or 240,000 households.

A recent report by the Toronto Region Board of Trade and WoodGreen states that not taking action on affordable housing could cost the greater Toronto area economy around $8 billion over the next 10 years. We welcome the government's indication of both the $4 billion for the housing accelerator fund and the promise in the budget for additional investment in the national housing strategy.

The solutions to housing affordability are complex and require all-of-government and all-of-community responses. Building on some of the comments of the previous witnesses, some of the key principles that will make the housing accelerator fund successful are flexibility; being performance-based, simple and predictable; the ability to be aligned or stackable; being rapid; and being transformational.

At the city, we know that housing supply is affected by density and municipal approvals, and we know how streamlining approvals benefits affordability. We continually improve through our “concept 2 keys” program and see the potential funding from the accelerator fund to be beneficial. It will give us an opportunity to learn together about what is affecting supply and how that in turn affects affordability.

In Toronto, for example, the number of homes approved does not equal the number of homes built. On average, we approve 28,000 residential homes a year, and around 15,000 of those homes are built. There could be many reasons for this, including economic factors, building industry capacity, supply chains, labour shortages, etc.

We also want the accelerator to incentivize the affordable housing supply that will create density adjacent to transit. We suggest that the funds should be flowed directly and up front to cities like Toronto, creating more funding certainty. This builds on the successful rapid housing initiative approach, where accelerator funding could be provided up front and directly to cities so we can better plan our supply of affordable housing, rather than going project by project.

We currently have 109 affordable housing projects, with around 19,000 affordable homes in various stages of approval and construction. If you give us accelerator money up front, we can roll up our sleeves and start to deliver some of those homes faster and with more affordability. We absolutely expect to be held accountable for increasing housing supply, based on the homes we approve and based on things that are in our control. If we can spend accelerator money on our local housing needs and supply line, we can also ensure that affordable homes are constructed.

Low cost and innovative financing through national housing programs like RCFI has been essential, but it has been insufficient. We estimate that we need grants of around $150,000 per affordable rental home to build in high-value, dense and urban locations next to transit. An accelerator provides us an opportunity to stack this, along with other national housing strategy programs.

We can focus our supply on the needs of meeting equity-deserving groups, as many of them are experiencing poverty and housing challenges to a much greater degree than our average resident. The accelerator fund could also help us deliver on our indigenous housing goals, supporting our truth and reconciliation approach.

New housing supply on its own is insufficient to solve our affordability crisis, not least because our most valuable affordable housing is the supply we already created. We can use accelerator money to support programs like tower renewal or our multi-unit residential acquisition program to support non-profits to buy, secure and reinvest in existing affordable rental homes.

Finally, I want to say that here at the City of Toronto, we are ready to deliver on our share of those 100,000 homes. If you could give us the accelerator money today, we could start delivering tomorrow.

Thank you for your time.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Bond.

We will now open the floor to questions, beginning with Mr. Jeneroux.

You have six minutes, Mr. Jeneroux.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Mr. Chair. It's good to be back at one of my favourite committees, HUMA.

I want to thank the witnesses for their testimony today. I'll get right into my questions.

On the housing accelerator fund, obviously, we're still very much in the consulting phase. That's why we're looking for some of your advice on how best to shape some of this. The program falls under the national housing strategy, which we've seen, in five years and $24.9 billion committed, has only built 91,000 new units, according to the government's budget. This new program alone is expected to build more than that, 100,000 more units, new middle-class homes, in the same time period, five years, with $4 billion. I guess I'm a little bit skeptical that will happen, as that's more homes than all the programs under the national housing strategy combined.

I'll start with you, Ms. Bond, and then perhaps go over to you, Ms. Atkey.

Are you as skeptical as I am? If the answer is no, which I expect it will be, is there any advice for the government on how to shape this fund so that it's actually a good program that will achieve the results we're all hoping to see?

[Abigail Bond]

Thank you.

What we've heard about the housing accelerator fund so far is that it is really focused on an increase in housing supply, not just affordable housing supply. Many of the national housing strategy actions and programs are really focused on delivering affordable supply. That takes more money. It takes a different set of partners. It takes a more intensive effort.

We see an opportunity for a win-win here for government to create that large number of supply units but also to see a growth in affordable supply as well. We would encourage further thinking about—and I think some of the other witnesses mentioned this—building in the right locations and encouraging a variety of different units. We can really make a difference and harness the market, which is already building supply, to build a better supply that better meets the needs of Canadians.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

I want to come back to that exact point, but maybe we'll get you, Ms. Atkey, if you don't mind, to provide some comments.

[Jill Atkey]

Thank you, Mr. Jeneroux.

I echo in some ways Abi's comments. To your direct question as to whether or not I'm skeptical, I probably wouldn't be in this business if I weren't an optimist. I absolutely believe that the target is achievable. As Abi mentioned, existing programs under the national housing strategy really are focused, to a certain extent, on more affordable supply, which does require more risk within the non-profit sector and a different set of partners. We've seen incredible slowdowns through the process.

I think that Abi, in her introductory comments, also mentioned something really important, which was around escalating costs of new construction, as well as labour costs. The existing target of 100,000 new homes is achievable and to some extent is already happening in this country.

Getting back to the key principles that I mentioned, they need to be the right units in the right locations, targeted at the right populations, to be truly effective in meeting affordability targets.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Can I put you down as optimistic but cautiously watching as we move forward? Is that a fair assessment, Ms. Atkey?

[Jill Atkey]

I would say that's a fair assessment, yes.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Okay, perfect.

Lots of the stuff that we find we run into obviously falls under the municipalities—permitting, zoning, etc. However, a big issue in many of the big cities we see is Nimbyism. We hear countless stories of residents fighting and halting municipalities and developers from building in their areas, especially when it comes to affordable housing. Could you expand on this, and perhaps share how any Nimbyism delays or affects the approval of new builds, specifically when it comes to affordable housing?

Ms. Atkey, why don't we go back to you first and then maybe over to Ms. Bond?

[Jill Atkey]

In the most direct sense, the way that it affects non-profit housing getting developed is that we've actually had projects that have been halted and turned down in British Columbia because of Nimbyism most directly.

I would say that's still reasonably rare. In the last five years I know of three or four projects that have been turned down because of community opposition, but the way that it most directly impacts—

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

I'm sorry, Ms. Atkey, but before we move on from that point, of those three or four projects, do you see room in this accelerator program to be able to address that, or would those issues still remain with those examples?

[Jill Atkey]

I think to a certain extent we're always going to see some level of community opposition, because we're past the point where “easy projects” are done—so greenfield developments where you're going to run into less opposition. We're seeing intensification of urban areas and significant change in communities. There is going to continue to be opposition, but where the accelerator fund could be helpful is in requiring municipalities to intensify existing areas and incentivize them to approve projects through, for example, a per-door sort of reward for the approval, which gives that direct incentive but also in some ways provides a bit of political cover.

To your earlier question, the other ways that non-profit developments are—

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Atkey. Perhaps you could do a short windup.

[Jill Atkey]

Thank you. I'm okay. I would have taken too long.

[The Chair, Liberal, Bobby Morrissey]

Yes, and we're over by a minute.

Thank you, Mr. Jeneroux.

Now we go to Madame Martinez Ferrada for six minutes.

[Soraya Martinez Ferrada, Liberal, Hochelaga, QC]

Thank you, Mr. Chair.

My question to begin is for Ms. Cyr, from Bâtir son quartier.

Ms. Cyr, you mentioned the problems that can arise in building affordable housing. In particular, they can include housing and municipal zoning policy, obtaining permits and acquiring land.

How could a housing accelerator fund help speed up the construction of housing in municipalities?