On May 31, 2022, the media were invited to an announcement where the provincial minister of municipal affairs and housing, John Lohr, unveiled the PC government’s latest plan to help ease the housing crisis. The policy, titled Land For Housing Initiative, is quite simple. The province owns at least 50,000 parcels of land—maybe as many as 100,000—and it wants to make that land available for various groups, like developers or affordable housing non-profits, to build housing.
In 2020, the provincial government commissioned a study into the housing crisis. The study has no handy one-line definition for what the crisis is, as it’s a huge problem with many smaller problems all wrapped up into one big disaster. Broadly speaking though, for some people, the crisis is that the high cost of housing can slow down the real estate sector, which is over 10 percent of Canada’s GDP. But for most people, the crisis is that their paycheck isn’t enough to guarantee a roof over their heads.
Halifax Regional Municipality needs lots of places for lots of people across the income spectrum to live; in March the province said the “housing deficit” in HRM was “at least 17,000 units and growing.” To make sure the lower-income side of the spectrum isn’t forgotten about, the Land For Housing Initiative proposes the trade built into its name. “To aid in offsetting some capital costs,” the plan states, “land sites considered suitable for housing will be made available to private and community housing developers in return for a commitment to create and maintain several new units at affordable rates.”
To the extent this policy is designed to increase the housing supply, a handful of developments that will take years to come to fruition is not a great answer. Each piece of land the province owns must be assessed to see if it can be developed into housing. Then the government puts out a partnership opportunity notice. Interested parties make an application, the government chooses one, then the selected bidder can start the development process.
What the steps are to development aren’t important to non-developers, but what is important is that this process takes time. Lohr’s mandate letter from Sep 14, 2021, directed him to make a full inventory of the government's lands to better identify which of the up to 100,000 parcels can be used for housing. His department has identified 37 so far. These 37 parcels are all years from having people live in any potential housing. In fairness, this process could become faster, but so far it’s glacial.
Make no mistake, this policy is a step in the right direction, but it is a tiny step and a very late one. The right time for this policy would have been about 10 years ago. Today, it will do little to make housing more affordable because affordable development through schemes like this is historically slow. So slow, in fact, that from 2011 to 2016, for every single affordable unit built, Canada lost 15.
That said, affordability is not the goal of this scheme. “Certainly, we'd like to see many affordable housing projects come out of this, but the reality is we're short supply,” says Lohr. The idea that a lack of supply is causing the housing crisis is a belief that has been criticized as a myth “based on misinterpreted data and the tendency of politicians to oversimplify complex problems,” as Nick Boisvert wrote for the CBC. Lohr continued to say the government would like to see a “significant portion” of these new units be affordable, but that the government didn’t have “a particular goal.”
To make affordability super confusing, the Canadian Mortgage and Housing Corporation has two definitions of affordable. One is if housing costs less than 30 percent of a household’s before-tax income.
But for the Land For Housing Initiative (and any program that has federal funding through the CHMC), developments that are proposed as “affordable” have to meet or exceed the affordability standards as laid out in the National Housing Strategy Co-Investment Fund. That affordability criterion says rents for at least 30 percent of the units must be less than 80 percent of the median market rent and maintained for a minimum of 20 years.
That second standard is based on market prices of rental units—not the income of renters. And paychecks, with some exceptions that are primarily in unionized workplaces, do not increase when market prices do.
Take Halifax for example, where the median income of renters in Halifax is $25,000 per year. In a one-person household, by CMHC’s income-based definition, the most that median renter can spend on affordable housing would be $7,500 in a year (30 percent of their $25,000 income), a maximum of $625 per month. But the market-based “affordable” rent for a one-bedroom apartment in Halifax would be $868 a month, or $10,416 a year. For the median renter, that rent is 41 per cent of their income. CHMC’s average is from October 2021. Based on today’s rental rates, the median renter would spend 62 percent of their income on the “affordable” rates.
When asked if affordability should be tied to income instead of market prices, the Nova Scotia NDP’s housing critic Suzy Hensen said, “Yes, I do.” Nova Scotia Liberal Party municipal affairs and housing critic Lorelei Lorelei Nicoll also said, “Yes.”
When asked if he saw any issues using market-based affordability criteria instead of income-based affordability criteria, minister Lohr replied in part, “we're concerned about affordability across the spectrum, and we're doing everything that we can to make housing more affordable for Nova Scotia. And so yes, this is a concern, and we're working on it.”
All in all, The Coast grades this policy as a D (or a level 2 using HRCE standards). The provincial government has demonstrated a minimal understanding of the problems and is putting forward a policy that addresses a tiny part of the issue. This policy heads the government in the right direction, and the affordable housing that does get built will help the people who get to live there.
But while Lohr seems to understand there is an affordability issue, this policy does not address that issue in any meaningful way. And although the government says it believes a lack of supply is causing both the housing and affordability crisis, this policy solution doesn’t add enough housing to address supply, either. Only time will tell if this is a setup policy for a more comprehensive suite of policies that will genuinely address the housing crisis. Or if this is a policy by a government that just wants to do the bare minimum on a major issue to try and coast to re-election.