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Kathleen Wynne: spendthrift? Or just the opposite?

February 6, 2013

In last week’s Globe, Kathleen Wynne was reported to have a “slew of big-ticket policies” in mind, including a national affordable housing strategy.

Does that make her a “can’t say no” spendthrift – the Big Government proponent that the Globe and some of its readers seem to fear? Perhaps just the opposite.

Here’s what a spendthrift Big Government housing program looks like:

  • Programs are designed to maximize the profile of the government of the day. Useful programs are cancelled, only to be repackaged and re-announced.
  • “Public accountability” trumps efficiency, and measures purporting to get the best value for money actually drive costs up.
  • Strategic planning is officially encouraged, often tying up government staff in months of public consultations and research. However, key information such as “how much money will be available to fund programs” is routinely withheld.
  • Private investment is also officially encouraged. But the clear rules and predictable returns that might attract investors are often sacrificed in favour of stop-and-go programs.
  • Each government ministry, department and agency has its own priorities and requirements, with program participants expected to fill in the gaps.
  • Even successful pilot programs are dropped and may take years to get ongoing funding. In the meantime project staff disappear, taking the skills and knowledge they developed with them. And the pilot’s clients are left high and dry.

In other words, it looks like the system we have now.

Like most housing advocates, I am quick to praise governments whenever a new housing program is announced. I know the funds won’t meet the need, but in this austere climate I am grateful if even a handful of people will be helped.

But I also know that none of these programs have the one element that is essential to housing success: continuity.

Housing does not lend itself to stop-and-start programs.

Housing is a long-term commitment. Housing developers need time to identify and secure sites, gain planning approvals and marshal resources. Housing owners – both private and public – need predictable revenues to sustain their buildings through 50 years or more.

Most of all, people need a home they can rely on. Vulnerable people are made more vulnerable when they live in fear that their income will be cut, their home sold, or a support worker laid off.

The opposite of Big Government

Instead of dozens of government initiatives, what if we had a housing program that was the opposite of “Big Government.”

Think about that wildly successful anti-poverty program, the Old Age Pension. Look at how unassuming it is. No media fanfare. No pilot programs, public commissions or political announcements. Just year-after-year funding that protects millions of Canadians from an impoverished old age.  The system may be under pressure. But I have yet to hear anyone ask, “Why don’t we cancel the Old Age Pension for a year or two? We can always re-announce when the economy improves.”

In a “small government” housing program, the bulk of the money goes to recipients – not to start-up, administration, or oversight. Eligibility is clear-cut. Applications are streamlined. Participants are free to make choices without fear they would run afoul of program rules. Projects are funded because they are the most sustainable, or most needed, or most creative – not because they happen to be ready to go when the program is announced.

That’s why we need a national affordable housing . . . something

I don’t know Kathleen Wynne’s mind. But I suspect that she, like many others calling for a national housing strategy, longs for a rational approach to housing funding.

My only concern is the use of the word “strategy.” We already have plenty of strategies. By the end of this year Ontario will be blanketed with 47 local 10-Year Housing and Homelessness Plans. Many provinces, including Ontario, have recently approved long-term housing strategies.

What’s missing is steady money – and no level of government has more money than the Feds. They may have a deficit and feel poor, but they are the only level of government to have successfully off-loaded responsibilities without a commensurate drop in taxes.

The small government solution

I’d like to see a “small government” strategy that looks something like this:

  1. Make the most of the assets we have. Federal Minister Diane Finley made a smart move last week when she lifted the stiff penalties that prevented some housing co-ops from refinancing to fix up their buildings. We need more ways to ensure the assets bought with public funds keep on giving.
  2. Reinvest savings. As social housing mortgages are paid off, the federal government is reaping big savings. By the end of this decade, federal housing subsidies will have declined by $232 Million per year in Ontario alone. Simply by reinvesting these savings, the federal government can maintain its investments without raising taxes.
  3. Commit a small but steady percentage of federal revenues to a National Housing Fund. No need for the Feds to add another layer of bureaucracy to administer this fund. Transfer the money every year to Provincial Governments (or in Ontario, where housing responsibilities have been downloaded, to municipal governments) and let local strategies prevail.I don’t know what the contribution should be, but I’m sure there are economists who can figure it out. (We might start with Don Drummond. His report was labeled “tough medicine” when it was published in early 2012 – anything but tax and spend. Nonetheless his Recommendation 19-14 called for the Ontario Government to “negotiate with the federal government to commit to a housing framework for Canada that includes adequate, stable, long-term federal funding.” )

 And then you’re done. It may not be fancy. But if the federal government could truly stop acting like “Big Government” and instead act like the prudent stewards they aim to be, they could leave a legacy to be proud of.

It’s a point I hope Premier Wynne will be making.

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9 Comments leave one →
  1. David Priebe permalink
    February 6, 2013 4:39 pm

    It is such a joy to read your articles. Truly, the wise government understands that the road to sustainable public programs lies in assuring decent affordable housing for all. The problems created by mould in our housing, for example, place an additional burden on the health care system. The neglect experienced by those with mental health issues plays out through community impacts and expensive interventions by the justice and correctional sectors. The Scandanavian countries seem to understand this better than most. Maybe we need to look at their programs and outcomes, rather than our neighbour to the South.

  2. Wm. Perry permalink
    February 6, 2013 7:16 pm

    I propose a fourtth strategy:

    “4. Appoint Joy Connelly as the ADM of Housing.

    Great analysis of recent events. I’m glad I took the time to read it.

    With all of the public housing mortgages expiring over the next 7 years, the non-profit housing sector may be richer than the funders.

    Lever those assets.

  3. John Cowan permalink
    February 7, 2013 12:02 am

    Good analysis. But government debates (strategies and programs) over funding of affordable housing miss the point.

    Governments have shown they are not good building managers. And governments inducing non-profits to be building developers and managers seems to be a misapplication of skills. We have thousands of landlords and developers who love to build and manage buildings – its their expertise. Government’s role is to see that people don’t fall between the cracks, with income and mental health supports or the like.

    So why don’t we use the power of government to:
    a) require private landlords to house a proportion of subsidized folk, and
    b) stop funding buildings in favour of funding people in need?

    • February 7, 2013 10:43 am

      So glad you weighed in, John. Two thoughts:
      a) Virtually all social housing was built by private developers and many are managed by private property management companies. The chief issue is not one of skills, but of ownership: “Who owns the land? Who owns the building? And what is the best way to keep housing affordable in the long-term?”
      b) I think your suggestions are good ones, and definitely part of the mix. But local circumstances do vary. There are fast-growing suburbs that have virtually no rental housing at any price, and old towns that need repairs, not income subsidies. As for Toronto, the Globe ran an interesting story marking the 35th anniversary of the St. Lawrence neighbourhood. That’s a case where government invested in buildings — and created a downtown neighbhourhood that has stayed affordable.
      I think this is the benefit of federal funding, but local planning.

      • John Cowan permalink
        February 8, 2013 12:57 am

        Joy – Yes, but. Have you been in the St Lawrence neighbourhood? Toronto Housing does a lousy job of maintaining these places.

        My point is: leave the building bit to the experts, and the social policy bit to the government through income supports of one kind or another possibly in partnership with community groups. Don’t try to make community groups with social concerns (like my Church) figure out the challenges of building (with developers and partial government funding) just so there can be social housing.

        Some governments saw rent control as a way to support low income folk. But it did not give them income, it curtailed rents and the rate of private building so there is now more pressure on governments to build. Rent control seems a poorly thought out social policy. So, until we fix the supply/demand balance for rental space while supporting those down on their luck, areas without rental housing may be the place for governments to build or sponsor buildings – as the exception, not the rule.

        Please don’t write me off as a rabid free-market landlord. That’s not really me. I would like to see some analysis of what it would cost the government to subsidize uncontrolled rents for persons paying negative income tax (i.e. income support to a minimum level) , compared to the costs of the current system of insufficient number of ‘affordable’ housing units and the social costs of under-housing (health, crime…..). This is a complex analysis. Has anyone done anything like it? Obviously it reflect complex concepts of social policy which need to be addressed anyway. But getting governments out of the housing business seems necessary, since they have clearly failed.

  4. February 7, 2013 7:30 pm

    Brilliant analysis. Thoroughly enjoyed it. Wickedly contrarion.

    • John Cowan permalink
      February 10, 2013 4:52 pm

      John S – I would be interested in your studies of Rent Supplements. Where can I find them? John C

  5. February 8, 2013 9:31 am

    Good heavens, Mr. Cowan: Why on earth would I write you off? I live for intelligent debate, and you are providing it!

    There have been studies on both rent supplements — subsidies that bridge the gap between market rents and what tenants can afford — as well as a housing benefit program. Both demonstrate some real strengths to this approach. In fact, John Stapleton, whose comment follows yours, was part of a group looking at a housing benefit for Ontario. John S, do you want to talk more about what you learned?

  6. April 22, 2013 1:55 pm

    My thoughts about the proposed housing benefit for Ontario: http://lovelandlording.blogspot.ca/2013/04/brighter-prospects.html

    #Fail.

    I’m interested to read that K.Wynne claims any interest in a housing strategy – can’t even get a form letter response to my emails to her or any one else in the Liberal government.

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