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As federal money for pre-1994 housing projects is set to expire, many wondering how thousands of units will be maintained

October 30th, 2012 · 64 Comments

This country saw a lot of good, cheap, affordable housing built in the 1950s, ’60s and ’70s. Much of it was due to two things: federal dollars directly into social housing and federal tax laws that encouraged people to invest in private-market apartment buildings.

Many of the region’s minimum-wage or low-income households are holding themselves together in those three- and four-storey apartment buildings and social-housing projects all over the region.

The tax incentives got killed, so rental stopped. In 1994, the federal government ended its support for social housing, so it was left up to the few provinces willing (largely Quebec and B.C.) to keep building some.

But there was still money going into the old social-housing projects, through 30- and 40-year agreements signed when those projects were built a few decades ago. That money is still flowing, for the most part, but it’s due to start ending, as various agreements come to the end of their terms.

My story here looks at what people are fearing the consequences might be and what they’d like to see as a solution — no, not more money. Just the same amount that’s been going in all these years.

 

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  • waltyss

    Ah Foghorn: The statement made was that they lived in subsidized housing, with the implication that their rent was subsidized. Frances pointed out that that was untrue. Which it is.
    With regard to gman and brilliant not, I have no idea whether they live by their ideology. Do you? My point which I stand by is that the only “facts” they accept is those that agree with their ideology. “Intellectual honesty” has nothing to do with their posts which are neither intellectual or honest.

  • teririch

    @Frances Bula #48:

    I appreciate it is an ‘old chestnut’ – but it is the overall perception of the Layton’s taking advantage of social housing – while fighting for social housing.

    It just looks bad, all the way around. And I would feel no different if it were a Conservative or Liberal MLA or party leader.

    When you are making well above what others are making as were the Layton’s and Davies, you don’t take advantage of a program, because you can.

  • brilliant

    @Fabula 48-Layton & Chow paid $880 a month for a 3bedroom town house. A couple months before the article broke they started voluntarily paying another $300. Coincidence…?

    @waltyss-your lectures on blind ideology are always amusing. After all there isn’t a turd that falls from Gregor’s lips that doesn’t become gold before it hits your ears.

  • Michael Geller

    This is a very important topic and I’m glad Frances has written about it.

    While theLayton/Chow anecdote is an old chestunut, it does raise a number of questions for me that relate to whether the units are being operated in accordance with the Operating Agreements that were entered into at the time the projects were approved.

    More specifically, how many 2 and 3 bedroom townhouses are being occupied by a single person who is paying rent geared to income?

    How manyof the residents own other properties, that are their principal residences, while remaining in the coops and non-profit rentals?

    How up to date is the income data upon which the rents are determined?

    How do the rents for the ‘non-subsidized’ units in the project compare with market rents in the area?

    I suspect that few people know the precise answers to these questions. However, based on my past experiences with CMHC, I am satisfied that there are a significant number of people in each of these three camps.

    By addressing the inbalances, and adjusting rents to market where appropriate, the subsidy bills can likely be reduced for most projects to something equal to or less than the savings that will arise when the mortgages are paid off.

    In other cases, there will be financial challenges. However, this is where more creative solutions may need to be found. In some instances, it will be possible to infill new market and non-market units.

    In others, it may be appropriate to knock down some townhouses and build a mix of market and non-market apartments to better meet the housing needs.

    In other instances, it will be possible and necessary to change the demographic profile of the development over time.

    There will remain problems, however. In many instances these projects have not been as well maintained as they should have been (in order to keep rents low). This is going to cause problems.

    However, I do agree with Frances, Trish , Frank and MB above that there is a need for some comprehensive planning to help coops and non-profits address the future challenges.

  • Mira

    Michael,
    “How do the rents for the ‘non-subsidized’ units in the project compare with market rents in the area?”
    Do not compare apples to oranges.
    Do not compare a greedy landlord to this kind of housing, where the tenants own shares and volunteer.
    FYI, members of any coop put an average of 48 to 80 volunteers hours per year/ per unit every year! In areas like family support & activities, membership policies selection, maintenance( cleaning/ repairs), conflict resolution, finance, landscaping…
    At the end of the day, there is no way to compare market rental housing in the area with anything like this… unless you are in the appraisal and/ or development business. Thanks.
    MB…
    I was very clear… take a tenant, all included. 🙂

  • gman

    Waltyss#51
    ” My point which I stand by is that the only “facts” they accept is those that agree with their ideology. ”
    No shite Einstein how very astute of you.
    Waltyss I notice your obsession with me is growing more and more unhealthy and Im starting to worry about you.Perhaps a little couch time might be of some help to you.Do try and get some rest.

  • teririch

    Changes also need to be made to the Strata Act.

    Even though I am an owner, I cannot rent my place out. There are only 5 units in my building that can be rented – those originally bought from the contractor.

    One gentleman on my floor is currently working overseas and will be for the next 2 years. He wanted to rent his place and can’t so his place sits empty.

    It makes no sense when there is a shortage.

  • IanS

    @teririch #57,

    I don’t think the Strata Property Act mandates any rental restrictions. IIRC, that is a matter for the the bylaws.

  • waltyss

    @teririch: The Strata Property Act does not prohibit rentals. It does allow the owners of the strata properties to limit or prohibit rentals. Given that many people feel that the feel and maintenance of a building with rentals is different, why would you advocate the owners not being able to limit or prohibit rentals if they so chose. Should the owners not be allowed rentals and now they want to do so, they are free to change the bylaw.
    What is the issue? Living in a strata property almost by definition involves compromise.

  • teririch

    @IanS #58

    Thank you.

    I see there have been changes to the Act surrounding rentals (2010 and on the Gov. website).

    Regardless of bylaw restictions you cannot be stopped from renting to a family member or requesting to renting your unit for hardship reasons.

  • teririch

    @waltyss #59

    Thank you for the lecture. As I have lived in my ‘strata’ building for 20 years now and am an owner, I am familiar with issues/concerns surrounding rentals.

    You are playing to the stero type that all renters are problem causers.

    Oddly enough, we have had more issues with owners than renters in my building.

  • Joe Just Joe

    Going away for 2yrs seems and being unable to rent out the unit it’s almost benefical to sell the unit and buy back a similar one upon return. There must be a legal loophole to exploit. I know some presales are sold to limited companies and then to avoid the assignment fees, the owners sell the limited companies, the owner of the condo remains the same, hence no assingment fee. Perhaps something similar could be down with transfering the unit to a limited company and not renting it out but transfering ownership for a 2yr period for a set amount of money. Mind you the legal paperwork (if even possible) might make it cost prohibitive.

  • waltyss

    @teririch. I am not saying renters should be prohibited and I have no preconceived views of renters. I am only saying that the owners should have the choice to decide whether to allow renters or not.
    .

  • Bill Lee

    @Joe Just Joe // Nov 5, 2012 at 3:54 pm #62

    Meanwhile assignments are hidden in Toronto
    “Data on condo speculators prove elusive”
    by TARA PERKINS – REAL ESTATE REPORTER
    The Globe and Mail Published Wednesday, Nov. 14 2012, 5:00 AM EST
    Last updated Wednesday, Nov. 14 2012, 1:03 PM EST

    An effort to get more information about the influence of some speculators in Toronto’s condo market has collapsed after developers refused to take part, leaving policy makers in the dark.

    http://www.theglobeandmail.com/report-on-business/economy/economy-lab/data-on-condo-speculators-prove-elusive/article5258051/

    Urbanation Inc., a data-research firm, has pulled the plug on a survey that it had tried to conduct, with the support of Canada Mortgage and Housing Corp., to quantify how many “assignments” are taking place in the market.
    An assignment is when a buyer who has bought a condo in a building that’s not yet finished, or registered, assigns their right to buy the unit to someone else.

    Urbanation officially called off the study Tuesday, after the vast majority of developers who were asked for information did not give it. The study could have shed light on an aspect of the condo market that economists and policy makers have been worried about, as they have sought to get a handle on just how overheated the market might be and what risks it might pose to home buyers and the greater economy.

    “There aren’t any good numbers on the amount of properties being used for investment purposes,” said Toronto-Dominion Bank chief economist Craig Alexander. “It’s very hard to assess risk in the market when you don’t have insight on that.”

    Urbanation had sent a letter to developers in August, notifying them that it would be conducting this “very important data collection exercise” with the support of CMHC.

    Ben Myers, executive vice-president at Urbanation, said he sent the survey to more than 100 developers that had launched condo projects in the past five years, asking them for either the percentage of units or an exact number of units that had been assigned before the condo buildings were registered. “We wanted to know what’s happening with this shadow market; there’s no real way to track it,” he said.

    He said that one person he spoke to, outside of the developer community, speculated that “because some of the people assigning units are not paying capital gains taxes on that, developers may not want the government looking into that any further.”

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