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Jul 2018 | The Housing Issue

ECONOMIC DEVELOPMENT AT THE COST OF SOCIAL PROGRESS? OVERCOMING POLITICAL BARRIERS TO SECURING SOCIAL HOUSING
NOEL WALKER, PSD RESEARCH

Affordable housing is one of the most contentious issues in the public policy realm. Affordable housing policy has effects that cross the boarders of class and wealth and are often rooted in the domain of values. As questions arise over the promise of economic development at the cost of social progress, we must ask: Why are we negotiating with the lives of families and individuals who are simply looking to fulfill their basic needs? Why must we haggle over the minimum cost of providing basic shelter and a good home?

This article will provide a background on recent changes to the rollout of affordable housing policy in Canada and highlight some current efforts made at the provincial and federal levels to promote more inclusive approaches to building and maintaining affordable units. Also included will be a discussion on how the policy process surrounding affordable housing can cause a rift between the intentions of federal and provincial governments on one end, and municipal governments on the other when it comes to negotiating and implementing affordable housing. The differences in approach between the federal/provincial and local governments are due to the unique local reliance on the property tax base of “homevoters,” who frame increased affordable housing in their neighbourhoods as a threat to community wellbeing. I will conclude by questioning the usefulness of “rebranding” when it comes to affordable housing, looking forward to a point in time where affordable housing is not just negotiable, but the norm.

 

I. Building Affordable Units

 

The work that goes into implementing affordable housing is often complex and rife with politics and economic pressures. The Canada Mortgage and Housing Corporation reported recently that the national average cost of rent increased in 2017 by 2.7 percent to $947 per month, correlated with overall vacancies in Canadian cities falling from 3.7 percent of available units to three percent the year before in 2016. This displays that service managers at all levels of government are facing the problem of having fewer resources while facing rising costs as an estimated 200,000 Canadians remain homeless.

Affordable housing units in Canada are normally owned by non-profit organizations, or for-profit private developers, with the role of the government set as sometimes owner, often catalyst; legislating minimum requirements for the building of units and the transferring of funds to third party organizations to have it built once a developer is designated. Social housing can involve a multitude of configurations, but all levels can be involved in some way or another through funding, regulations or public/private partnerships. Once a developer is selected, the real estate development process is often costly, requiring months or years of preparation, not to mention the actual project costs, which are capital intensive. These factors are perceived by the developers as containing substantial amounts of risk, requiring return on the investment made by real estate developers who orchestrate the process, with the intention being that government transfers offset lost revenue or development costs in making the housing affordable to those of modest incomes.

In November of 2017, the Government of Canada announced a National Housing Strategy that, over ten years, has committed $40 billion to build new affordable housing units, upgrade existing but aged and deteriorating properties, including but not limited to the securing of loans intended to encourage developers to construct new affordable housing geared toward low to middle-income owners. The overall goal is to reduce chronic homelessness by 50 percent over 10 years and is being touted as Canada’s first ever reified strategy to address and combat increased unaffordability and precarious shelter.[1]

Provincially, efforts remain varied as new plans are formulated and implemented to address homelessness. In Ontario for example, service managers are responsible for administering approximately 230,000 units of affordable housing. There is a provincial strategy for ‘Building Together’, which advocates for “Maintaining roads, bridges, water, wastewater and social housing [to] be a top priority” when a local government or third party is managing a municipality’s assets. It specifically notes that when it comes to social housing, “many municipal service managers have assessed the condition of their housing portfolios” and must now decide the best way of moving forward. They have the option of utilizing the Ministry of Municipal Affairs and Housing’s Social Housing Renovation and Retrofit Program, the FRAME: Fundamental Resources for Asset Management Excellence, and the Asset Management Resource Kit, developed in conjunction with the Housing Service Corporation, Centre for Asset Management, and stakeholders “to provide tools to help providers and service managers undertake effective asset management planning” as more affordable housing is mandated provincially.

These mandates come from new amendments to the Promoting Affordable Housing Act, unveiled April 12, 2018, designed for Ontario to assist municipalities with affordable housing initiatives through providing funds, as outlined above, but also through a new inclusionary zoning bylaw where, if a real-estate development is built with 10 or more units, municipalities must require developers to include affordable housing units for low and middle-income families in order to create mixed-income communities. It is thought that municipalities now have more flexibility to expand their housing options and increase the overall supply of affordable housing, tackling the issues outlined above,[2] but municipalities are potentially set to face far greater pushback from constituents than the province in the face of these mandates; pushbacks which may constitute political barriers to the expansion of new affordable housing projects.

II. The Policy Process & Affordable Housing

 

The impacts of property relations on the local policy process can cause rifts between the goals and approaches of the federal and provincial governments, and councillors and decisionmakers in local governments who are beholden to the wants and needs of their constituents and taxpayers. As municipalities are often “policy takers”, and due to the bounded nature of the local policy process, ‘homevoters’ have a significant impact.

We can turn to Fischel’s Homevoter Hypothesis as an explanation for why local residents might reject these efforts of higher levels of government in promoting inclusionary zoning, and instead prefer the protection of property values and the order of the community over affordable housing. Fischel argues that what gives the Homevoter more power over local affairs is the local government’s heavy reliance on the property taxes they provide.[3] The Homevoter hypothesis explains how the “voice” of the Homevoter becomes a powerful “tool for homeowners to employ in response to the risks stemming from municipal politics” in the city potentially implementing policies harmful to the Homevoters’ most significant investment: the home.[4] These Homevoter framings are consistent with the literature on affordable housing and public perception, as “not only is housing assistance mired in controversy but also renters are frequently considered lesser citizens than homeowners”, where the former are seen as being less committed to their communities, representing a “poorer, more transient population than neighbouring homeowners.”[5]This stems from a (mostly unjustified) fear of increased crime or lowering of property values.

As a part of the debate surrounding voter motivation, the Homevoter Hypothesis has been criticized for Fischel’s sole focus on the image of Homevoters being “empowered to keep low-income, higher-cost newcomers out” of their neighbourhoods[6] to the exclusion of consideration of how other, less privileged political actors are impacted at the local level. The perceptions of the Homevoter are based on their framing of the particular population they wish to exclude as being “deserving or undeserving”, a move which “affects both policy design and the array of interests supporting and opposing the policy”[7] in an “us vs. them” fashion.

Many studies in the literature have shown that increased access to affordable housing in neighbourhoods has provided no evidence that it causes increases in an area’s “crime rates, a decline in property values, or an increase in property taxes”[8] but the policy process is not guaranteed to be influenced solely by rational, fact-founded positions.[9] This criticism of the presented literature is that “it is not clear that most homeowners act like rational property-value maximizing agents all the time” or how that would impact governments in the real world if they could determine more effective approaches to implementing more affordable housing that is seen as agreeable by the Homevoter. This criticism accuses Fischel’s model of failing to consider the “varied motivations of local actors and the actual powers of local governments.”[10] This is because the actions of city stakeholders are contingent upon the policy process; the cumulative interests of groups, organizations and stakeholders who use facts and express values to provide alternative framings of the defined problem, which are subject to sometimes rapid change. 

 

III. Rebranding Affordable housing?

 

We can see that there are steep hills to climb to overcome the stigma at the local level related to affordable housing, but efforts are being made at the higher levels to make affordable housing more palatable for constituents. To be eligible for National Strategy funding as of 2018, housing programs are to “align with public investments in job creation, skills training, transit, early learning, healthcare, and cultural and recreational infrastructure” as well as support a “climate change agenda and commitment to accessible communities.” The goal is for all communities to benefit across the board from the implementation of affordable housing, while remaining transparent and accountable through the multilevel governance model between federal, provincial, territorial and municipal governments as well as with the private and non-profit sectors, and people with lived experience of homelessness and housing need.

Further evidence of this is to be found in the Strong Communities through Affordable Housing Act, which provides key goals in providing economic benefits to renters, more housing options for extended families or elderly parents, better options to maintain a round-the-clock caregiver, as well as create jobs. The work is also designed to address and prioritize capital planning, repairs and environmental, material and economic sustainability, with municipalities being encouraged to integrate asset management planning for social housing with asset management planning for other municipal infrastructure.

Now that there is pressure for municipalities to fulfill bare minimum requirements, and with a changing political landscape, there is uncertainty as to whether even these provisions for affordable housing will be maintained. The divide between the intentions of the provincial and local governments when it comes to problem definition and goal formulation is in choosing the best affordable housing policy to implement. It seems absurd to think about rebranding “Affordable Housing” to make it more popular as, on its face, who wouldn’t want housing that is by definition affordable? The trick to promoting greater acceptance is to think about who perceives themselves as winners and losers with the implementation of affordable housing.

Part of yielding or outright throwing away the terms “affordable” or “social” relative to housing is to go back on all the positive things those terms represent, like community, inclusivity and empowerment. While rebranding may be a quick fix, a better way to go is for organizations concerned with strengthening and growing existing affordable housing to associate it with other policy options in addition to the ones above, strengthening the already apparent purpose of providing housing to those who need it most by emphasizing economic and environmental benefit. Hopefully soon we will be even closer to shifting the discussion from “lose-win” to “win-win” by taking an inclusive approach and overcoming political barriers to affordable housing.

 

NOEL WALKER, MA is a contributor to PSD Research and a Business Development Specialist. He holds a Master of Arts from Western University in Political Science and a Bachelor of Arts, Hons. in Political Science from Laurentian University. He is currently completing a project management certification through Western Continuing Studies and conducting supplementary research as it relates to asset management and social and public policy.

 

[1] Government of Canada: “Canada’s National Housing Strategy”, Fall 2017. Ministry of Families,
[2] Government of Ontario Archived News Release: “Ontario Paving the Way for More Affordable Housing” April 11, 2018. Ministry of Municipal Affairs and Housing https://news.ontario.ca/mma/en/2018/4/ontario-paving-the-way-for-more-af....
[3] Fischel, W. A. (2001). The homevoter hypothesis: how home values influence local government taxation, school finance, and land-use policies. Cambridge, Mass.; London: Cambridge, Harvard University Press.
[4] Mcgregor, Michael; Spicer Zachary: “The Canadian Homevoter: Property Values and Municipal Politics in Canada.” Journal of Urban Affairs Vol. 38, No. 1, (2016): pp. 123-139.
[5] Scally, Corianne Payton. “The Nuances of NIMBY: Context and perceptions of Affordable Rental Housing Development.” Urban Affairs Review 49:5. (2012) Pp. 718-747.
[6] Schragger, Richard. Review: “Consuming Government: The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land Use Policies by William A. Fischel” Michigan Law Review Vol. 101, No. 6, (2003), pp. 1824-1857.
[7] Goetz, Edward G. “Words Matter: The Importance of Issue Framing and the Case of Affordable Housing.” Journal of the American Planning Association, Vol. 74 No. 2, (2008): pp. 222-229.
[8] Albright, Len; Derickson, Elizabeth; Massey, Douglas. “Do Affordable Housing Projects Harm Suburban Communities? Crime, Property Values, and Taxes in Mount Laurel, NJ.” City & Community 12:2. (2013): Pp 89-112.
[9] Sancton, Andrew. (2011) Canadian Local Government: An Urban Perspective. Don Mills, Ont.: OUP Canada. Pp. 251 Print.
[10] Schragger, Richard. Review: “Consuming Government: The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land Use Policies by William A. Fischel” Michigan Law Review Vol. 101, No. 6, (2003), pp. 1824-1857.