3. HOUSING
ALLOWANCES COMPONENT OF THE CANADA-ONTARIO AFFORDABLE HOUSING PROGRAM COMPOSANTE DES ALLOCATIONS
DE LOYER DU PROGRAMME CANADA-ONTARIO DE LOGEMENTS ABORDABLES |
That Council approve the City's participation in the Housing Allowances component of the Canada/Ontario Affordable Housing Program and authorize the Director of Housing to enter into a Service Manager Administration Agreement with the Province to deliver the Housing Allowances component of the Canada/Ontario Affordable Housing Program.
Que le Conseil d’approuver la participation de la Ville dans la composante des allocations de loyer du Programme Canada-Ontario de logements abordables et qu’il autorise le directeur du logement à signer avec la Province une entente d’administration de gestionnaire de services pour offrir la composante d’allocations de loyer du Programme Canada-Ontario de logements abordables.
DOCUMENTATION
1.
Deputy
City Manager's report dated 11 January 2007 (ACS2007-CPS-HOU-0003).
2.
Extract
of Draft Minute, 1 February 2007
Report to/Rapport au:
Community and Protective Services Committee
Comité des services communautaires
et de protection
and Council / et au Conseil
11 January 2007 / le 11 janvier 2007
Submitted by/Soumis par : Steve Kanellakos, Deputy City
Manager/Directeur municipal adjoint,
Community and Protective
Services/Services communautaires et de protection
Contact
Person/Personne ressource : Russell Mawby, Director
Housing/Logement
(613) 580-2424 x44162, Russell.Mawby@ottawa.ca
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SUBJECT: |
HOUSING ALLOWANCES
COMPONENT OF THE CANADA-ONTARIO AFFORDABLE HOUSING PROGRAM |
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OBJET : |
COMPOSANTE DES ALLOCATIONS DE LOYER DU PROGRAMME CANADA-ONTARIO DE LOGEMENTS ABORDABLES |
REPORT RECOMMENDATION
That Community and Protective Services Committee recommend that Council approve the City's participation in the Housing Allowances component of the Canada/Ontario Affordable Housing Program and authorize the Director of Housing to enter into a Service Manager Administration Agreement with the Province to deliver the Housing Allowances component of the Canada/Ontario Affordable Housing Program.
RECOMMANDATION DU
RAPPORT
Que le Comité des services communautaires
et de la protection recommande au Conseil d’approuver la participation de la
Ville dans la composante des allocations de loyer du Programme Canada-Ontario
de logements abordables et qu’il autorise le directeur du logement à signer
avec la Province une entente d’administration de gestionnaire de services pour
offrir la composante d’allocations de loyer du Programme Canada-Ontario de
logements abordables.
On June 28, 2006 Council passed the Housing Delivery Plan (HDP) for the Canada-Ontario Affordable Housing Program (ACS2006-CPS-HOU-0008). In the report, the Housing Branch identified several concerns with the Housing Allowance component of the program including the lack of ability to use the Housing Allowances with in-situ tenants and the 5 year term of the Housing Allowances. Council recommended that if the Province did not support the City’s approach to any of the program components, that the City would not participate in the program component. Council also indicated a desire to protect the funding allocation under this program component.
Based on Council’s stated interest in keeping the funding allocation of $6.08 Million for the Housing Allowance component in Ottawa, the Housing Branch proposed to implement a pilot project for 50 units out of the 400 units allocated, and decide whether to deliver the balance of the units based on the success of the pilot, contingent upon Council approval. In doing so, the Housing Branch was able to preserve the funding allocation for the Housing Allowance component until the matter could be brought forward to Council for consideration.
Based on feedback from the community there is interest in the program, although the community has the same concerns as staff over the inability to use the funds in-situ and the liability after five years. But there is also agreement that there may be is a niche for the shallow subsidy offered by the Housing Allowance, and it is in the community interest to attempt to preserve this funding allocation. The experience of other jurisdictions is that the Housing Allowance component is expensive to administer because of the difficulty of finding interested households and matching these households to available units. We have had preliminary discussions with the Eastern Ontario Landlord’s Association, the Rent Supplement Office, the Legal Department, the Registry, and Canada Lands Corporation (re Rockcliffe) in terms of implementing a Housing Allowance pilot program, and believe that there is sufficient interest to merit delivering a pilot even though the program parameters may make successful delivery difficult.
Le 28 juin 2006, le Conseil a adopté
le Plan de création de logements aux fins du Programme Canada-Ontario de
logements abordables (ACS2006-CPS-HOU-0008). Dans le rapport, la Direction du
logement précisait que la composante d’allocations de loyer du programme
comportait plusieurs préoccupations, notamment l’impossibilité d’utiliser les
allocations de loyer à l’égard des locataires sur place et la durée de cinq ans
des allocations de loyer. Le Conseil a recommandé que la Ville ne participe pas
à la composante du programme si elle ne recevait pas de la Province un appui à
l’une des approches que la Ville préconisait pour l’une ou l’autre des
composantes du programme. Le Conseil a aussi exprimé son désir de protéger
l’affectation de fonds accordée aux termes de cette composante du programme.
Compte tenu de l’intérêt explicite du Conseil
de conserver l’affectation de fonds de 6,08 millions de dollars pour la
composante des allocations de loyer à Ottawa, la Direction du logement a
proposé de mettre en œuvre un projet pilote pour 50 des 400 logements
alloués, et d’offrir ensuite le reste des logements selon le succès du projet
pilote et l’approbation du Conseil. De cette manière, la Direction du logement
a été en mesure de préserver le financement accordé aux fins de la composante
des allocations de loyer jusqu’à ce que la question puisse être examinée par le
Conseil.
D’après les commentaires reçus, les citoyens
s’intéressent au programme mais y voient, tout comme les membres du personnel,
l’impossibilité d’utiliser les fonds sur place de même que l’engagement qui
subsiste après cinq ans. Mais on croit aussi que la faible subvention offerte
par la composante des allocations du loyer pourrait être utilisée et il est
dans l’intérêt de la collectivité de tenter de préserver cette affectation des
fonds. Selon l’expérience des autres secteurs de compétence, la composante des
allocations de loyer est coûteuse à administrer en raison de la difficulté à
trouver des ménages intéressés et à les jumeler à des logements disponibles.
Après des échanges préliminaires avec l’Association des propriétaires bailleurs
de l’Est de l’Ontario, le Bureau au supplément du loyer, les Services
juridiques, le Registre et Canada Lands Corporation (au sujet de Rockcliffe) afin de mettre en place un programme
pilote d’allocations de loyer, nous croyons qu’il y a suffisamment d’intérêt
pour justifier un programme pilote, même si les paramètres peuvent nuire à sa
mise en place réussie.
BACKGROUND
On June 28, 2006 Council passed the Housing Delivery Plan (HDP) for the Canada-Ontario Affordable Housing Program (ACS2006-CPS-HOU-0008). The delivery plan addressed three program components: Rental and Supportive Housing, Home Ownership, and Housing Allowances. In the report, the Housing Branch identified several concerns with the Housing Allowance component:
1. Fixed shallow subsidies that cannot be effectively adjusted to meet varying needs or opportunities.
2. The 5-year limit on funding with current program structure, which confers a potential liability to the City to continue the subsidies after the Provincial funding expires
3. The program requires participating tenants to vacate their existing housing in order to occupy vacant units elsewhere – cannot be used in-situ.
4. Administrative costs insufficient to cover program implementation.
Council approved the following recommendation which was in report ACS2006-CPS-HOU-0008:
“That if the Province does not support the proposed approach to delivering one or all of the three program streams of the Canada/Ontario Affordable Housing Program, that the City of Ottawa will not participate in that program stream but that Council request that the funding allocated to that stream remain in Ottawa, for redistribution to other program streams or for direct delivery by the Province”.
In September 2006, the Province confirmed that the concerns raised by the City would not be addressed by the Province, and that there would be no changes to the program parameters.
The Ministry of Municipal Affairs and Housing requested that the City reconsider the stated intent to not participate in the Housing Allowance component of the program. The Ministry confirmed that if the City formally withdrew from this component, the funding allocated to Ottawa ($6.08 M) would be reallocated to other jurisdictions, because those funds would be considered to be unallocated.
If, however, the City indicated intent to try to deliver the Housing Allowance component under the existing parameters, those funds would not be reallocated. The Ministry also indicated that if, in fact, the City was to encounter barriers in the delivery of the Housing Allowance component and not meet the expectations set out in the Delivery Plan, that there would be an opportunity for discussion about how to retain the funding allocation and achieve the program objectives.
DISCUSSION
Based on Council’s stated interest in keeping the funding allocation of $6.08 Million for the Housing Allowance component in Ottawa, the Housing Branch submitted a revised delivery plan as requested by the Province. We proposed to implement a pilot project for 50 units out of the 400 units allocated, and decide whether to deliver the balance of the units based on the success of the pilot. Our submission to the Province indicated that the revised delivery plan was contingent upon Council approval, which would not be possible before January 2007. In doing so, the City's funding allocation for the Housing Allowance component has been preserved until the matter could be brought forward to Council for consideration.
Based on feedback from the community there is interest in the program, although the community has the same concerns as staff over the inability to use the funds in-situ and the liability after five years. But there is also agreement that there may be is a niche for the shallow subsidy offered by the Housing Allowance, and it is in the community interest to attempt to preserve this funding allocation. The experience of other jurisdictions is that the Housing Allowance component is expensive to administer because of the difficulty of finding interested households and matching these households to available units. We have had preliminary discussions with the Eastern Ontario Landlord’s Association, the Rent Supplement Office, the Legal Department, the Registry, and Canada Lands Corporation (re Rockcliffe) in terms of implementing a Housing Allowance pilot program, and believe that there is sufficient interest to merit delivering a pilot even though the program parameters may make successful delivery difficult.
The Housing Allowance component of the Affordable Housing Program cannot be delivered within the existing staff compliment of the Housing Branch. We estimate that the pilot program will cost approximately $60,000 to roll out, based on one temporary part-time FTE and associated costs for one year. The funding will be taken from the one-time lump sum payment provided by the Province to start-up the overall Affordable Housing Program.
The Housing Allowances provided to tenants must be terminated within 5 years under this program. The expectation is that tenants will either find subsidized housing that is geared-to-income prior to the termination of the Housing Allowance or see an increase in household income that will lessen or eliminate the need for the Housing Allowance. However, if neither of these outcome occurs, there is a risk that City may need to step in to continue the subsidy. For 50 units, the annual cost of the Housing Allowance is approximately $144,000.
CONSULTATION
The Housing Branch has met with community agencies, the Registry, and the Eastern Ontario Landlords Association, as well as internal departments about this program and our response to the Province.
FINANCIAL IMPLICATIONS
The cost to administer the pilot program for the first year will be absorbed within the current affordable housing budget. The administration costs for future years will likely exceed the administration budget provided by the Province and result in a budget pressure.
SUPPORTING DOCUMENTATION
Document 1: Revised Housing Delivery Plan for the Housing Allowance program submitted to the Province in October 2006.
Document 2: Excerpt from Report ACS2006-CPS-HOU-0008: Key barriers to participating in the Housing Allowance program.
DISPOSITION
Director of Housing to sign the Service Manager Administrative Agreement for the Housing Allowances component of the Canada-Ontario Affordable Housing Program and remit to the Province.
Document 1:
Revised Housing Delivery Plan for the Housing Allowance program submitted to
the Province in October 2006.
Target
Households
Households will be on or eligible to be on the centralized
waiting list as administered by The Registry.
The HILS and associated affordable rents for Ottawa are:
Bachelor unit = $26,500 = $662.50 per month
1 Bedroom unit = $31,500 = $787.50 per month
2 Bedroom unit = $38,500 = $962.50 per month
3 Bedroom unit = $47,500 = $1,187.50 per month
4+ Bedroom unit = $55,000 = $1,375.00 per month
Households in receipt of rent-geared-to-income (RGI)
benefits are not eligible to participate in this program.
Provincial Target Populations
The City of Ottawa will reserve a minimum of 10% of the 400
units, or 40 units, allocated to Ottawa for VDV and will work with MCSS
designated agencies to enable take-up of these units.
Household
Selection:
Households will be selected from the
Centralized Waiting List (“The Registry”).
A targeted list will be pulled from the general waiting list based on
matching the unit size and geographic preference with the units that we have
available for this pilot program.
A letter will be sent to all
households on the Registry list that match the unit size and geographic
preference for the units that are available.
Households that respond to a letter explaining the program and household
eligibility will be placed on a separate waiting list (while still maintaining
their position on the CWL).
The City will attempt to target
households on the CWL that have recently left OW assistance and could benefit
from short-term assistance to make the transition off of OW. The City is investigating the possibility of
targeting youth leaving Children’s Aid Society foster care as has been done in
other municipalities. Preliminary
inquiries indicate that the number of individuals in this situation in Ottawa
might be small.
Unit
Selection:
Landlords will be selected primarily through existing
landlords with Rent Supplement units and an open process through the
cooperation of the Eastern Ontario Landlord’s Association. The City has already had discussions with
the Rent Supplement office and John Dickie, president of EOLA with respect to
this program. The City is confident
that the target goal of 50 units in the pilot phase can be met. A public notice requesting landlord
participation in the program may be issued.
Housing allowance payments will be reduced so that there is
no reduction of the shelter component of benefits from Ontario Works (OW) or
Ontario Disability Support Payments (ODSP).
Only self-contained units will be eligible. CMHC average market rents will be used to
define the maximum rent to be charged under this program does not exceed the
published Average Market Rents for the zone in which the unit is located. CMHC AMR rents do not distinguish between
whether utilities are included or not.
Annual income testing of selected households will be
undertaken as part of the contractual agreement with tenants.
Housing
Allowance Take-up Plan: 400 units, 40 units for VDV $6.8 M.
The City proposes to deliver the
program in the following manner:
Year 1 :2007 - Pilot Program
The City of Ottawa intends to
initiate a Housing Allowance Pilot Program to deliver rent assistance. Eligible tenants will come from the
Centralized Waiting List (The Registry).
The City will attempt to target victims of domestic violence, and other
groups likely to be in a position to move into a new unit. Landlords, both private and non-profit will
be eligible through provision of blocks of units.
The City has the goal of entering
into 50 contracts in the pilot phase.
If the pilot project is successful, the City will endeavour to enter
into agreements for the balance of the units in our allocation.
Year 2: 2008
No agreements will be entered into
after March 31, 2008.
Average
Subsidy
The Average subsidy is approximately $240/month based on the total funding envelope and the number of units expected to be delivered for a five-year period within that funding envelope.
Payment Flow – Program Roll-out
The Housing Branch must receive Council approval before going forward with the implementation of this pilot program. A memo will be prepared for going forward to Council in January explaining the cost to implement and risks to the City. This program will be addressed as relating to information previously distributed and not as a separate report that is required to go to committee and Council. We do not have meeting dates for the new Council yet.
We will at this point in time maintain the expectation that Council will agree to move forward on the Pilot. The Housing Branch is making preparations to move toward launching a pilot program.
Document 2:
Excerpt from Report ACS2006-CPS-HOU-0008: Key barriers to participating in the
Housing Allowance program.
Key barriers to participating in this program:
1. Fixed shallow
subsidies that cannot be effectively adjusted to meet varying needs or
opportunities.
The program sets the total budget and specifies how many units must be delivered by the Service Manager, in effect defining the amount of subsidy that can be applied per unit regardless of actual costs or tenant needs and ability to pay. An “envelope” approach that specifies the total amount of funding and allows flexibility in how that funding is used would ensure that the program is able to be adapted to support local needs.
2. The 5-year limit on funding with current program structure.
As currently proposed, the program imposes a significant potential financial risk to the City and to some of the participating tenants, because some participating tenants will likely be forced to vacate their units when the program expires unless the City is willing and able to step in and continue the subsidy funding to those tenants. One option is for the City to establish funding to bridge the close-out of the Federal AHP funding, or to increase the level of subsidy and/or the number of units. If the Province agrees to the City’s approach for this program stream, these alternate options will be costed, and in the meantime staff would implement the housing allowance program with AHP funding only. While recognizing and supporting the intention that this program only provides short-term assistance, it may be preferable to subsidize fewer tenants but with the capacity to continue the subsidies beyond five years if necessary.
3. The program requires participating tenants to vacate their existing housing in order to occupy vacant units elsewhere.
This does nothing to address the core program principle of reducing vacancies and imposes additional costs to tenants to pay for moving in order to benefit from the program. Further, the program could drive up rental costs in the private market, as tenants vacate units and rent new units with the housing allowance.
A more appropriate approach would be to allow the use of these allowances “in-situ”, to provide a longer-term assistance to tenants who are in danger of losing their current housing due to lack of income, and who might otherwise become homeless. This approach would dovetail well with other programs and services already in place, such as the Rent Bank.
Alternatively, unallocated Housing Allowance funds could be used to supplement existing rent supplement programs over the short term, allowing re-deployment of longer-term supplements.
4. Administrative
Costs
Funding to support the administration of the
Housing Allowance program is being provided as part of the Provincial
allocation, based on $15.60 per month for the first 50 housing allowances, and
$13.00 per month for the remainder.
Based on the 5-year time frame of this program, and the allocation of
400 units, this will result in a payment of approximately $319,800.
HOUSING ALLOWANCES COMPONENT OF
THE CANADA-ONTARIO AFFORDABLE HOUSING PROGRAM
COMPOSANTE
DES ALLOCATIONS DE LOYER DU PROGRAMME CANADA-ONTARIO DE LOGEMENTS ABORDABLES
ACS2007-CPS-HOU-0003 CITY WIDE / À
L'ÉCHELLE DE LA VILLE
Councillor Holmes acknowledged that this program was initiated by the province in response to requests from private sector landlords who had vacancies in the buildings. She recognized these vacancies existed as a result of a former provincial government eliminating tenant protection and allowing rents to increase to the point where the market could no longer sustain it. She wondered what would happen at the end of five years when this program is slated to end and what kind of buildings these subsides are being provided for.
Russell Mawby, Director of Housing, explained that there is potential for the City to take on the liability for continuing the subsidy payment to households who still need it. However, the program forces people to move to vacant units and he believed that is one of the biggest liabilities and drawbacks to the program. He reminded Committee that when Council dealt with this issue last summer, it was recommended that the City not participate in the program unless the province changed the program rules. The province subsequently advised staff that if this were the case, they would take the $6M allocated to Ottawa and redistribute it elsewhere. Therefore, staff are reporting back today to try and preserve that dollar commitment. He did remark that the program has not been successful across the province because while there have been a number of units identified that are available, tenants are not willing to take them because of the cost of moving and other disruptions.
In response to further questions made by Committee members, the Director provided the following details:
· the program would not be directed to people who currently receive a subsidy; it would be offered to people on the social housing waiting list who are living in private or market units in social housing and paying full rent; the program gives them the opportunity to benefit from a shallow subsidy for a short period of time
· should Council designate those units to publicly funded housing, there is a concern that even if they make the units available, the question is whether or not tenants will take them because it would mean they would still have to move from their present accommodations
· this program cannot be applied to a place where someone is currently living - they have to move to a vacant unit to participate
· it is a one-time program and the provincial funding being provided would not be offered in the future
· prior to entering into the program, tenants would be advised of the proviso that once the program expires they would no long continue to receive a subsidy
Councillor Bédard believed it should be the provinces’ responsibility to continue to fund those units. He maintained that if at the end of the five-year pilot, the City has to continue to pay the subsidy, then Council should not support this program. While the Director did not believe this was the provinces’ intention, he did indicate that there might be some pressure on the City down the road from tenants to maintain that subsidy. He wanted to bring to the Committee’s attention this potential liability down the road.
When asked how much of the provincial funding would cover the administrative costs of administering this program, Mr. Mawby indicated that the province is providing a very minimal contribution and will probably be just enough to cover half the cost over the five-year period. The department would have to absorb some of the administrative costs for whatever units they put forward out of the four hundred units that they have. He went on to state that even with only 50 units, they would still incur costs of around $60,000 a year (approximately half of which would be offset by the provincial contribution). It was therefore concluded, that for $30,000 the City would try to safeguard $6M.
That Community and Protective Services Committee recommend that Council approve the City's participation in the Housing Allowances component of the Canada/Ontario Affordable Housing Program and authorize the Director of Housing to enter into a Service Manager Administration Agreement with the Province to deliver the Housing Allowances component of the Canada/Ontario Affordable Housing Program
CARRIED