Rent-Geared-to-Income subsidies:
Now and in the future
Housing co-ops were created with a mandate to provide affordable housing for low and moderate income Canadians. That can only be done if there are resources Rent-Geared-to-Income subsidies available for people who need them most.
Section 95 problem
What is the problem?
Many Section 95 co-ops have been struggling to manage their income-tested assistance – the subsidy they get to help low-income households with their housing charges. Subsidy funding from Canada Mortgage and Housing has been reduce both in real terms and relative to the overall costs of the co-op. This has happened because of lower mortgage interest rates and the way subsidy has been calculated over the years.
In 2005 the Government of Canada announced a partial solution to the problem. Subsidy resources will remain stable and predictable for co-ops in future. However, many co-ops have already had to reduce the number of households they can assist or put off other spending in order to create internal subsidy pools to help existing members.
Co-ops are ready to part of the solution to the affordable housing crisis. We welcome families of all income levels into our communities. We know that a diversity of life styles and experience make for strong healthy communities.
The end of the operating agreements
What is the problem?
Many housing co-ops in Canada are rapidly approaching a time when things are going to change very dramatically for the co-ops and the members who live in them.
These agreements will end by the year 2020 for all of the Federal Section 95 and most of the Federal Co-op Housing Program (ILM) co-ops. Some 55,000 co-op homes in Canada will be operating without any contract with government agencies
Some co-ops will be able to manage just fine and provide long-term, well maintained housing for their members. They may be able to create internal subsidy pools to continue to provide RGI supplements for members who need it most.
Many co-ops are going to feel like they have to make difficult choices. Some may try to continue to provide RGI assistance at the expense of future viability of their projects. Other may reduce the number of low income households in order to put money aside for future needs. Either way, there is the very real possibility that the co-op sector will lose some of its ability to provide housing for people who need it most.
What are the solutions?
The Co-operative Housing Federation of Canada has presented a proposal to the Government of Canada to help solve this problem. The proposal has two parts to it.
Step 1:
Continue the current level of federal subsidies to co-operative housing projects by extending their operating agreements. This would mean that co-ops would continue to receive their current RGI funding from the federal government after their mortgage has been paid and the operating agreements would normally expire. This will help to maintain real affordability for tens of thousands co-op homes across the country.
Step 2:
Immediately increase RGI funding available to co-ops so that more families that need RGI can find homes in co-ops.
CHF Canada will be seeking support from politicians across the county for this proposal.