What Impact will the 2019 Federal Budget have on Canada’s Housing Market?

What Impact will the 2019 Federal Budget have on Canada’s Housing Market?

What Impact will the 2019 Federal Budget have on Canada’s Housing Market?

On March 19, Canada’s federal finance minister tabled the Trudeau government’s 2019 budget titled Investing in the Middle Class. Key social policy announcements include a new Canada Training Credit, increased funding for municipalities, some increased funding for women’s organizations and increased earnings’ exemptions for low-income seniors.

Budget 2019 also has implications for housing—and on that front, here are 10 things to know:

  1. Budget 2019 introduces a new First-Time Home Buyer Incentive, creating so-called ‘shared-equity mortgages.’ This program fronts a portion of the required down payment for a ‘middle income’ household trying to buy a home for the first time. The federal government contribution is set at 5% of the value of an existing home, or 10% of the value of a newly-built home. The household does not pay interest on the federal loan portion; however, Canada Mortgage and Housing Corporation (CMHC) ends up owning 5% or 10% of the home’s value—and on the home’s sale, CMHC gets back 5% or 10% of the appreciated (or depreciated) value. Participants must be first-time home buyers with annual household incomes of under $120,000. The maximum value of the mortgage plus CMHC support will be four times household income (i.e., $480,000). This program is expected to be operational by September 2019. Federal officials say they expect approximately 100,000 first-time home buyers to take advantage of this program over the next three years.
  2. The Home Buyers’ Plan withdrawal limit has been raised from $25,000 to $35,000. This is the program that allows first-time homeowners in Canada to borrow from their Registered Retirement Savings Plan for a down payment. This increased limit is available for withdrawals made after March 19, 2019. Budget 2019 also proposes that individuals who go through a separation or divorce be permitted to participate in the Plan, even if they’re not buying for the first time.
  3. The good news on the housing affordability front is that the home ownership measures contained in Budget 2019 will likely increase the average rental vacancy rate and exert downward pressure on average rent levels. That’s because some households currently renting will now become home owners, creating a bit of slack in the rental market. This is good news for prospective renters and existing renters. Some landlords won’t be happy though—with reduced demand for rental housing, they may not be able to charge as much rent or be as selective in terms of which tenants they rent to.
  4. The bad news on the housing affordability front is that these same measures will likely exert upward pressure on the average price of a new home. That’s because when you increase demand for a product, its price typically goes up as well. This is good news for current home owners, especially when they decide to sell, but it’s bad news for prospective home owners who aren’t eligible for the initiatives.
  5. Incentivizing households of modest means to become home owners isn’t necessarily good public policy. In a 2006 report, Michael Mendelson argued that Canadian housing prices are subject to large price swings. Indeed, housing prices do not only go up—for example, from January 2018 until January 2019, the price of detached homes in Vancouver fell by approximately 9%. Mendelson argues that such price decreases are bad news for owners of modest means who need to sell during such a downturn, especially if they haven’t been owners for very long. He cautioned that, in such situations, those households can lose their life savings.
  6. Incentivizing households of modest means to become home owners also runs counter to at least one action recently introduced at the federal level in Canada. I refer here to the introduction of the mortgage stress test, largely in response to unprecedented consumer debt levels (and against which Canada’s home builders have recently expressed strong opposition). This measure was introduced by the Office of the Superintendent of Financial Institutions, an arm’s length regulator (and endorsed by the federal minister of finance).
  7. Canada’s Rental Construction Financing Initiative, originally scheduled to be in place for four years, will now be extended to nine years and provided with an additional $10 billion in loans. Originally announced in the 2016 federal budget, this program provides low-cost loans for the construction of new rental housing for ‘middle income’ households. These loans are for developers (either non-profit or for-profit) and unit rents must be set 10% below full market potential. Funded projects must also meet two other important criteria: 1) achieve a standard 15% better than required by national codes for energy efficiency and reduction of greenhouse gas emissions; and 2) have 10% of units accessible. With changes announced in the 2019 federal budget, the program is now expected to assist 42,500 new units across Canada, targeting areas of low rental supply. This represents federal loans totalling $829.5 million over nine years, starting in 2019–20. It’s expected that CMHC will make money on these loans.
  8. This budget announced a new $300 million program to improve energy efficiency in new and existing housing. It is being allocated to, and will be administered by, the Federation of Canadian Municipalities (FCM). In fact, three energy-efficiency initiatives for residential, commercial and multi-unit buildings worth a total of just over $1 billion annually were announced in this year’s federal budget, all of which will be administered by the FCM. This includes one $300 million initiative specifically for energy efficiency in social/affordable housing (new and existing).
  9.  This budget announced that the Canada Revenue Agency will receive $50 million over five years to create audit teams in high-risk regions of the country. One can infer from this that the federal government believes that home prices, especially in Toronto and Vancouver, have been driven up by investors flipping houses and not paying their fair share of taxes in the process (a practice that makes houses more expensive while denying revenue to the federal government).
  10.  A budget supported by a more robust social spending framework could do a lot for both affordable housing and homelessness. A major reason people have housing affordability challenges is that they have low incomes. Addressing low incomes requires a well-funded social spending framework that would reduce income inequality. This year’s Alternative Federal Budget (AFB) provided such a framework. The AFB is a fully costed-out advocacy document that includes funding increases for post-secondary education, seniors’ benefits, child care, First Nations’ infrastructure, social assistance, and affordable housing (including supportive housing for vulnerable populations). It also proposes universal pharmacare. (Full disclosure: I was primary author of the AFB’s housing chapter.)

In sum. The Trudeau government’s 2019 federal budget contains very few initiatives explicitly geared toward affordable rental housing, and no new funding at all for absolute homelessness. The home-buying incentive measures will make it easier for some households to become homeowners; however, they may have unintended consequences as well. The extension of the Rental Construction Financing Initiative is good news for housing affordability, while new funding for auditing may have the effect of exerting downward pressure on the price of homes—especially new condos in Toronto and Vancouver. Far-reaching changes to housing affordability would require bold changes to fiscal policy, such as those proposed in the 2018 Alternative Federal Budget.

I wish to thank Helen Harris, Ron Kneebone, Marc Lee, Scott Leon, Michael Mendelson, Claire Noble, Brian Pincott, Shayne Ramsay, Tim Richter, Steve Saretsky, Marion Steele, Ray Sullivan, Greg Suttor, and three anonymous reviewers for invaluable assistance with this blog post. Any errors are mine.


Nick Falvo is a Calgary-based research consultant, a research associate at the Carleton University Centre for Community Innovation, and a CCPA research associate.

When tenants ‘graduate’ from Housing First programs: 10 things to know

When tenants ‘graduate’ from Housing First programs: 10 things to know

When tenants ‘graduate’ from Housing First programs: 10 things to know

Nick Falvo is Director of Research and Data at the Calgary Homeless Foundation.

With limited resources at their disposal, System Planners—such as the Calgary Homeless Foundation (CHF)—like to know how long various subgroups of persons experiencing homelessness will likely require various forms of housing support. With this in mind, Ali Jadidzadeh and I have co-authored a study that appears in Housing Studies—a leading housing journal. Titled Patterns of exits from housing in a homelessness system of care: The case of Calgary, Alberta, the study looks at the case of CHF-funded Housing First programs.[1]

Here are 10 things to know:

 

  1. The study uses survival analysis and hazard models. To quote from the study: “[S]urvival analysis tells us when we can expect new housing units to become available for new tenants, and which programme types will have available units more quickly… [while] hazard analysis can tell us which tenants will be most likely to graduate, based on the individual characteristics of those tenants” (p. 7).
  1. The data in the study comes from Calgary’s Homelessness Management Information System (HMIS). Gathered between 1 April 2012 and 31 March 2015, the data pertain to people residing in Housing First programs funded by CHF. Literally thousands of people were involved in this data collection effort, including: persons living in Housing First programs who signed release of information forms; staff in Calgary’s Homeless-Serving System of Care who inputted the data; CHF staff who provided training and support to community on how to use HMIS; as well as CHF staff who then cleaned the data.[2] The data in question were gathered on each person residing in Housing First every three months. An intake form was first completed by a case manager at intake into the program; then, another assessment form got completed every three months. There was also a form completed at exit from the program. These forms ask basic demographic information, as well as information about education, income, employment, history of family violence, use of health services and involvement in corrections. Most of the data gathered is based on self-reporting by an experienced case manager who receives accreditation. Blank copies of these forms can be accessed here.
  2. Key to the study is a concept known as graduation. Alberta’s provincial government provides homelessness funding to System Planners (such as CHF). To quote directly from the study: “In line with provincial programme guidelines in place during the period under consideration in the present study, a client is said to graduate from CHF-funded housing when they no longer require ‘housing support’ (i.e. case management). And in the case of temporary housing funded by CHF, a client is said to graduate once they complete programme requirements and move into a more permanent form of housing—either subsidized or unsubsidized…” (p. 3). [Note: subsequent to the period of study, the definition of graduation has changed for Calgary.] For a recent academic consideration of graduation, see this 2018 article.
  1. One of the study’s findings is that single adults without dependents require housing support longest, and families for the least amount of time. Put differently: single adults without dependents who have recently been homeless require social work[3] support longer than other groups. I suspect a few factors may be at play here. First, single adults without dependents sometimes don’t have dependents because their children have been taken into child protection (possibly stemming from the parent’s challenges with mental health and/or substance use). It’s therefore intuitive that a person with such challenges would require social work support for a longer period of time. Also, in Alberta, singles without dependents receive less income assistance than other groups, making it more challenging to live independently (I encourage people to read the poverty chapter in this year’s Alberta Alternative Budget, which argues that the poverty gap for singles without dependents is much larger than for other groups).
  1. Women require social work support for longer periods than men (even when we control for employment and income). In fact, the study finds that men are 32% more likely to graduate than women. As noted in the study: “One possible reason for this is that women experiencing homelessness often find themselves in relationships with people who in turn jeopardize their housing stability…” (p. 20).
  1. Having a history of addictions does not appear to affect a client’s graduation rate. This is consistent with findings from the At Home/Chez Soi study, which found that formerly-homeless persons who consume large amounts drugs and/or alcohol maintain housing about as well as other formerly-homeless persons. This reaffirms the importance of the Housing First approach, which holds that a person should not have to go to a drug or alcohol treatment program as a precondition to receiving permanent housing.
  1. Older clients have lower graduation rates (meaning that it takes longer for them to move on to independence). Put differently: older people who have recently been homeless require social work support longer than other groups. The study notes: “Older clients having lower graduation rates should also not be surprising to many readers, as the health outcomes of seniors are poorer than those of younger clients” (p. 21). This is an especially important findings for System Planners across Canada, as older adults are making up an increasingly large share of the homeless population. In Calgary’s homeless shelter system, adults aged 55 and over now account for 19% of bed spaces on any given night; in 2008, they accounted for just 9% of all bed spaces.[4] This trend will likely continue for at least another decade or two.
  1. Findings pertaining to Indigenous peoples have already had ramifications on the ground. Indeed, the study finds that Indigenous peoples in the study needed support longer than non-Indigenous peoples. This holds even after controlling for income, education, and a history of family violence. Future research is needed that looks at factors that inhibit success among Indigenous peoples in Housing First.[5] These findings have also informed CHF’s engagement strategies with Indigenous peoples, including CHF”s hiring of an Indigenous advisor (since promoted to Director), a business case for two supportive housing buildings for Indigenous peoples (not yet funded) and future Indigenous-focused research (to be discussed in future blog posts).
  1. The study finds that having a source of income is positively correlated with graduation rates (i.e., it speeds up the move toward independence)—and this has already led to several changes in Calgary’s Homeless-Serving System of Care. This finding has helped inform an effort by CHF to identify, in collaboration with community partners, specific individuals in CHF-funded Housing First programs who, with some additional (short term) financial support, could likely graduate. This particular effort has been taking place for roughly one year; thus far, it has involved approximately 170 individuals with considerable success. The additional financial assistance provided varies by individual and is not intended to be permanent.
  1. In Calgary’s family homelessness sector, the study’s finding pertaining to income has led to the development of a new Adaptive Case Management (ACM) approach. ACM has a strong focus on providing short-term financial assistance to households in need (and it is discussed in detail in our Family System Planning Framework).

In Sum. This study finds that some groups move on from Housing First programs more quickly than others, and that some factors (such as a source of income) appear to accelerate graduation from Housing First. Because CHF embeds research into its day-to-day operations, we were well-positioned to start acting on findings well before the research was published.

For assistance with this blog post, I wish to thank Tim Aubry, Carla Babiuk, Victoria Ballance, Candice Giammarino, Ali Jadidzadeh, Stephen Metraux, Shane Rempel and one anonymous source. Any errors are mine.

[1] For a full copy of the article, please email me at nick@calgaryhomeless.com.

[2] Note: Ali Jadidzadeh has spent many hours cleaning this data so that it can be used for analysis—not only for this study, but for other stakeholders in community, including other researchers.

[3] People working in Calgary’s Homeless-Serving System of Care refer to such support as ‘case management.’

[4] These figures apply to single adults without dependents. The 19% figure is for 2017.

[5] Some research has already been undertaken on this in Edmonton. Check out this 2011 report and this 23-minute video.Blog PDF download here.

Ten things to know about Carey Doberstein’s book on homelessness governance

Ten things to know about Carey Doberstein’s book on homelessness governance

Ten things to know about Carey Doberstein’s book on homelessness governance

Carey Doberstein, a professor at the University of British Columbia’s Okanagan campus, has written a book about homelessness governance in Canada. The book’s focus is on the way homelessness funding is targeted and allocated in three cities: Vancouver, Calgary and Toronto. It focuses on the 1995-2015 period.

Here are 10 things to know:

1. There are some major differences in homelessness across Vancouver, Calgary and Toronto.On a per-capita basis, Calgary has the most homelessness of the three cities, and Metro Vancouver the least. Between 2008 and 2014, Calgary saw a 62% drop in street homelessness, while Metro Vancouver saw a 39% decrease and Toronto a 24% increase. Both Calgary and Toronto saw modest increases in Indigenous representation among their homeless populations during the period under consideration (17% and 6% respectively) while Vancouver saw a 15% decrease during this time. Finally, families constituted just 5% of persons living in Vancouver’s shelter system in 2014; in Calgary the figure is 12%, and Toronto 20%. All of these figures are accurate as of 2014 and do not reflect results of more recent enumerations (keeping in mind that cross-city comparisons of homelessness populations do come with challenges).

2. One such difference pertains to policy and governance. According to Doberstein: “These three cities differ dramatically in how government and civil society actors organize themselves in governance arrangements to solve public problems” (p. 6). These differences ultimately have an important impact on what homelessness looks like on the ground; however, they do not fully account for the many differences discussed in point #1 above (for more on the many factors that impact the size of a city’s homeless population, see point #3 of this blog post).

3. Better decisions pertaining to homelessness policy and governance are made when multiple stakeholders are involved in decision-making. With regard to homelessness policy and governance, the book is referring to policies with respect to where homelessness funding should go, how homelessness programming should be designed, and which subgroups of a city’s homeless population should be given priority.

4. Multiple stakeholders play important roles in such decision-making in both Vancouver and Calgary, more so than in Toronto. Vancouver and Calgary both have community advisory bodies that meet regularly and where members engage in important debate that leads to decisions pertaining to the disbursement of homelessness funding from the federal and provincial governments. By contrast, Toronto has a community advisory body that advises Toronto’s municipal government on how to direct federal homelessness funding; however, it meets just once or twice a year, and “essentially functions as a rubber stamp for the [municipal] bureaucracy’s homelessness agenda” (p. 95). The book goes on to state: “Toronto advanced many important policy debates and changes in the late 1990s and early 2000s, but the city has since lost its position on the cutting edge…” (p. 88).

5. Toronto may be turning a corner. The book notes that, in 2014, Toronto City Council tasked the newly-formed Toronto Alliance to End Homelessness “to serve as the designated advisory group to the City of Toronto on all aspects of its policy response to homelessness and housing…with the aim of engaging with community stakeholders in a more sustained and substantive fashion” (p. 123). This may give some Toronto-based readers reason for optimism.

6. Government plays a crucial role as a funder of homelessness programming, but government officials have a limited line of sight. Former BC Housing manager Michael Anhorn is quoted in the book stating: “It’s way too easy as a government bureaucrat to sit in our office and look at stats and think you know what’s happening [on the streets] is because of this or that. And, in part, that is because your statistics will only tell you what you measure, whereas service providers are in the day-to-day, and they will recognize trends that are happening before the statistics can identify them” (pp. 83-84).

7. Government officials can be risk averse. Public servants ultimately need to have their proposals vetted by elected officials, who in turn are nervous about risk. By contrast, staff at smaller non-profit agencies tend to be governed by board members who are often more nimble and less risk averse.

8. The book argues that Vancouver and Toronto’s municipal governments have been more directly involved in housing and homelessness than Calgary’s. For example, according to the book: “The City of Calgary has the same key homelessness-policy levers as other cities do—namely, the control over land use and development—yet it has not fully leveraged that control through inclusionary zoning policies such as we see in Vancouver, and to a lesser extent, in Toronto.” (p. 129).

9. The book could have done a better job of outlining the various funding streams for homelessness programs across the country. In Calgary, for example, funding available for the local homelessness governing network provided by the provincial government dwarfs federal funding for homelessness by roughly a 4:1 ratio. And in Vancouver, provincial spending on homelessness exceeds federal spending on homelessness by a 20:1 ratio (if one includes capital funding). These arrangements vary tremendously across Canada. What’s more, across Canada there are approximately 3,700 municipal governments (many of which are quite small); yet, only some of them directly receive federal funding for homelessness. A general overview of the homelessness funding framework early in the book would have been helpful.

10. The book contains a few factual errors, though none of them undermine the book’s main arguments. In Chapter 3, the book notes (incorrectly) that in 1993 it was the Chrétien government that put an end to federal funding for new social housing units in Canada (with the exception of on-reserve housing). It was actually the Progressive Conservative government that ended this housing (in its April budget that year). Chapter 3 also notes that Vancouver’s community advisory body has shown innovation in “being the first to fund low-barrier homeless shelters (no requirement to be clean and sober)…” (p. 65). In fact, the first homeless shelter I worked at in Toronto in 1998 (Dixon Hall Men’s Shelter) had no such requirement.

In Sum: I believe this book is important for people interested in homelessness policy and governance in Canada. Officials in both government and the non-profit sector should read this. So should volunteers and consultants. I also recommend that professors read it and assign it to their students (especially graduate students).


I wish to thank Janice Chan, Brian Davis, Carey Doberstein, Paul Dowling, Melissa Goldstein, Katherine Graham, Jonn Kmech, Kevin McNichol, Tim Richter, Robert Shepherd and five anonymous reviewers for assistance in preparing this blog post. Any errors are mine.

Saskatchewan budget misses opportunity on rental housing assistance

Saskatchewan budget misses opportunity on rental housing assistance

Saskatchewan budget misses opportunity on rental housing assistance

I recently wrote a ‘top 10’ overview blog post about the 2018 Saskatchewan budget. Following on the heels of that, I’ve now written an opinion piece about the budget’s announcement of a phase out a rental assistance program for low-income households.

Points raised in the opinion piece include the following:

-Across Saskatchewan, rental vacancy rates are unusually high right now, making this a good time to provide rental assistance to tenants for use in private units (indeed, right now it’s a so-called renter’s market in Saskatchewan, meaning it’s a relatively good time for tenants to negotiate rental agreements with private landlords).

-Thus, rather than phasing out the program, it would have been sensible to have expanded it.

-Phasing it out will very possibly lead to more homelessness, which in turn may lead lead to higher public costs elsewhere (especially to the health care sector).

Interestingly, just yesterday the Saskatchewan Landlord Association made many of these same points themselves; they like the rental assistance program, as it increases demand for its members’ housing units (many of which are currently sitting empty).

It’s of course also important for government to finance housing owned by non-profit entities. I recently wrote about the importance of a variety of measures to improve housing affordability in the housing chapter of this year’s Alternative Federal Budget.

Meanwhile, the link to my recent opinion piece is here.

Ten things to know about the newly-signed federal-provincial-territorial housing framework agreement

Ten things to know about the newly-signed federal-provincial-territorial housing framework agreement

Ten things to know about the newly-signed federal-provincial-territorial housing framework agreement

Nick Falvo is Director of Research and Data at the Calgary Homeless Foundation

A federal-provincial-territorial (FPT) framework agreement on housing was signed on April 10 in Toronto. It supports the Trudeau government’s National Housing Strategy, which was released last fall.

Here are 10 things to know about the just-signed agreement:

  1. Though a National Housing Strategy (NHS) was released last fall, a federal-provincial-territorial (FPT) framework agreement still had to be signed. That’s because a lot of the funding proposed in the Strategy is dependent on cooperation from provincial and territorial governments.
  2. The federal government will now seek to negotiate bilateral agreements with every provincial and territorial government. In fact, it’s quite likely that the federal government has already begun to negotiate such agreements with some provinces and territories. If recent history serves as any guide, the federal government will likely begin by trying to negotiate agreements with provincial/territorial governments they think are especially keen to sign on (British Columbia might be low-hanging fruit in this regard).
  3. Each bilateral agreement will have a clause that ensures equal terms for all jurisdictions. Such a clause will stipulate that if a subsequent signee gets better terms, those better terms will apply to any provincial or territorial government that previously signed. The intent of such a clause is to not discourage a provincial or territorial government to come to the table early.
  4. One important section of the newly-signed agreement pertains to the National Housing Co-Investment Fund. The newly-signed agreement stipulates that provincial and territorial governments will have a role in decision-making pertaining to this fund; whereas, last fall’s NHS agreement suggested it would be a unilateral federal program. (For more on this fund, see point #3 of this previous blog post.)
  5. The newly-signed agreement touts the goal of removing 490,000 households from core housing need over 10 years. While hundreds of thousands of households may well be removed from core need, this is likely an unrealistic target. For example, the Canada Housing Benefit would need to be very deep and reflect regional differences in order to completely remove most beneficiary households from core housing need(For more on problems associated with using core housing need as a metric, see this June 2017 analysisby Steve Pomeroy.)[1] Also, the (NHS) released just last fall indicated that the goal was to remove 530,000 households from core housing need; likewise, the media release for the just-signed agreement also uses the 530,000 figure.
  6. Much of the federal funding committed will have to be matched by provinces and territories—but still, very few details have been offered as what this will look like. Some of the matching dollars won’t come from provincial/territorial governments themselves—but rather, from municipal governments, Indigenous organizations, non-profits and private entities. Some of these details will surface later in bilateral agreements. Also, some of the federal funding (such as the “targeted northern funding”) won’t require cost matching
  7. No specific information has been provided on program structure. These details will appear in the schedules in bilateral agreements. Such details will include information regarding who’s eligible for housing support and how exactly funds can be used.
  8. The federal government plans to introduce legislation that would underpin the framework agreement. Regardless, future federal, provincial and territorial governments will still have some opportunity to back out asfuture governments always have the opportunity to pass legislation to undo all of this. However, there would be political risk in doing so (i.e., they’d get a lot of political flak).
  9. The just-signed agreement says nothing new about homelessness per se. The homelessness file is being handled by Employment and Social Development Canada (ESDC), while the NHS is being handled by Canada Mortgage and Housing Corporation. An Advisory Committee on Homelessness has been meeting over the course of the past year “to support the redesign” of Canada’s Homelessness Partnering Strategy. Their consultation has recently concluded.
  10. The just-signed agreement says nothing about supportive housing. Supportive housing refers to subsidized housing for marginalized groups (including persons experiencing homelessness) that comes with social work support. I suspect we may hear something about supportive housing from ESDC over the coming months. It’s also possible that the bilateral agreements stemming from the just-signed agreement will get into the details on supportive housing.

In sum. The just-signed FPT housing framework agreement marks a crucial step toward making NHS a reality on the ground. The Calgary Homeless Foundation will be watching the status of bilateral negotiations closely, especially those involving the Government of Alberta. We’ll also be watching for developments on the federal homelessness front.

The author wishes to thank Vicki Ballance, Steve Pomeroy and Greg Suttor for assistance with this blog post. Any errors lie with the author.

Download this blog (PDF)

[1] There’s a footnote in the NHS in reference to this. It makes reference to this target being related to either the removal of a household from core housing need or the household’s degree of core need being “significantly reduced” (p. 4).