Thanks for inviting me to speak to you today.

St. Michael's Homes operates four buildings providing supportive housing and bed-based addiction treatment. Like other non-profit housing providers, we are keen to develop new housing. However, for the past 30 years or so, since the federal government first got out of housing, the rules in place for capital and financing access have made it highly challenging to develop housing that is meaningfully affordable.

While every funding announcement prioritizes non-profit, affordable and supportive housing, the models and policies in place create major impediments to actual development. This results in affordable housing developments in recent decades being carried out by for-profit developers, resulting in housing that often has a minimum number of only nominally affordable units. Where the affordability measure is based on the average market rent in a well off neighbourhood, those affordable units may in fact be anything but affordable, even for middle-income Canadians.

The current year's federal budget is a good start to improving the situation. The removal of the GST, access to federal lands, $14 billion earmarked for the affordable housing fund and the improvement in coordination between the federal government and the provincial governments are all welcome, but existing policies at federal institutions like CMHC, insufficient resourcing for capital sustainability and a lack of coordinated supports for non-profit housing development between the three levels of government leave lots of opportunities for improvement.

In order to support a greater number of developments by non-profits, there need to be changes in some of the policies in federal institutions like CMHC. I'll give you a few examples.

The financing available for projects is generally based on the rent collected, which directly undermines the capacity of non-profits to develop truly affordable housing.

A current building, in planning for 99 units, will receive only $17 million in financing out of the $54 million required, because it is “deeply affordable”. A for-profit developer would build 30% nominally affordable units with 70% market rents to receive full financing, but this non-profit will likely have to sell other affordable buildings to obtain the needed capital dollars. Additionally, per door capital funding models mean that only the smallest units—bachelors or studios—are viable, as you will have fewer doors with larger family housing units, which prevents the development of truly affordable housing for families.

CMHC will often demand A-grade security on financing. This means that if you are building supportive housing, you may be required to get a provincial commitment of support dollars for 50 years, which is not a reasonable expectation. If we want significant non-profit housing development, these approaches and models need to be changed through consultations with non-profit housing providers.

Second is capital stability, which is also needed for non-profit housing developments: The affordable or deeply affordable rents that low- to middle-income Canadians can pay cannot achieve sustainability for truly affordable housing in its absence. The capital dollars granted in the 1970s and 1980s allowed for the maintenance of buildings for the 50 years of capital funding. This approach should be reinstituted and enhanced to allow for sustainable affordable housing that stays affordable. See, for example, what's happening in some places in the country, such as Winnipeg, where provincial governments did not sustain capital resourcing after the end of federally funded mortgages, leading to the loss of affordable housing.

Third, a lack of coordination of programs between multiple levels of government leads to long, convoluted, multi-year processes that may or may not lead to financing or capital funding. As a result, non-profits spend substantial staff and cash resources taking substantial risks that may not lead anywhere. The three levels of government often do not coordinate their approaches with each other or between capital dollar and support dollar access. I know of potential building purchases by non-profits that could have broken even if they'd had support funding attached, only for the municipality to say, “We aren't accepting applications for support dollars this year.” In such situations, buildings don't get purchased and affordable housing doesn't happen.

Ideally, the solution to this would be a government agency to do much of the background development planning work in partnership with non-profits, so that we could turn properties into housing that we can run, which is our area of expertise. Among us, we have lots of properties that are ripe for redevelopment.

Thus, the key changes needed are coordination among the levels of government to simplify the development process for non-profits, ideally through a government development office; changes to funding models in federal agency policies and practices to remove unnecessary barriers to the development of deeply affordable and supportive housing; and capital supports that bridge the gap between the cost of developing and maintaining housing and the affordable rents to be paid by low- and middle-income Canadians.

Thank you for your time today.