Uphill battle for Hamilton’s affordable housing providers

‘Still just trying to play catch-up to what we’re losing,’ says Jeff Neven, CEO of Indwell

After 17 years of rent she could afford, Michelle Hruschka finds herself at a nerve-racking crossroads in west Hamilton.

She’s the sole holdout in a home on Dundurn Street North after the other tenants left at the new owner’s behest.

Hruschka, 63, who rents the first floor for $717 a month, worries where she’ll end up if she’s forced out.

Her $1,169-a-month disability pension will leave her with little — if anything — for life’s necessities in Hamilton’s escalated rental market.

“I’m very scared I’m going to end up with nothing and lose everything,” says Hruschka.

While Hruschka agonizes over chances on the private market — where an average one-bedroom apartment goes for $1,400 a month — she also faces a potential years-long wait for social housing.

“I’m only one of many, and it’s heartbreaking for me.”

In a 2019 community profile, city staff noted 15 per cent of Hamilton households — or 30,765 — were in “core

housing need,” meaning they had space or repair issues and spent 30 per cent or more of before-tax income for rent.

Nationally, the affordability crisis is of such concern, it’s the focus of competing party platforms in the Sept. 20 federal election. All aim to increase Canada’s housing stock to help ease the crunch.

The Liberals have set an overall goal of 1.4 million homes over four years. They plan to more than double their National Housing Co-investment Fund to $2.7 billion to help retain and build more affordable units.

The New Democrats aim for at least 500,000 affordable units in the next 10 years, with half of that total achieved in five years.

The Greens say they’ll “build and acquire” at least 300,000 units of “deeply affordable” housing over 10 years.

The Conservatives plan for one million homes over three years but are silent on affordable units.

In Hamilton, it has been a costly challenge to maintain an aging social housing stock of roughly 14,000 units, of which 7,000 are CityHousing.

Across the board, the repair backlog, based on building condition assessments is about $420 million, the city notes.

In April, the federal government announced it would provide $145.6 million in longawaited assistance to help the city repair nearly 6,300 units in coming years.

The city and its non-profit partners have welcomed the Liberals’ renewed focus after decades of flatlined investments in social housing.

Still, in August, the Parliamentary Budget Officer reported their $72-billion National Housing Strategy falls short of what’s needed to remedy the affordability crisis.

But that conclusion applies to all of the party’s election pitches, says Paul Kershaw, a professor at the University of British Columbia’s school of population and public health.

“No platform at this stage is going to be turning that around,” says Kershaw, who leads the Generation Squeeze research initiative that created a voter’s guide analyzing the housing platforms.

Unless Canada’s skyrocketing real estate market is tamed, “we are dreaming in Technicolour to think that we can just scale up the not-for-profit supply sufficiently,” he adds.

“If we continue to lose control of the cost of land, it is so much more challenging to build affordable rental.”

‘Still not gaining ’

Despite a hopeful resurgence in building activity, community housing providers in Hamilton agree they face an uphill climb.

“We’re still not gaining, let alone getting ahead of the challenge,” says Jeff Neven, chief executive officer of Indwell, which has built hundreds of deeply affordable units in Hamilton.

With anticipation of an election building in July, Prime Minister Justin Trudeau announced $5 million for Indwell projects while touring the Christian non-profit’s 139-unit Royal Oak Dairy project on East Avenue North.

In a partnership with Sacajawea Non-Profit Housing, the roughly $53-million project will include 13 units for Indigenous residents and space for the agency’s offices.

Apart from government funding, Indwell also raises money from a deep base of community donors and has set a nearly $4million goal for the Royal Oak Dairy project.

Neven worries operating agreements that government established with private partners to create affordable housing years ago are expiring — meaning those units will be reverting to market rents.

“So the need is huge, and all this housing we’re currently doing is still just trying play catchup to what we’re losing.”

To date, 4,082 units in Hamilton reached the end of operating agreements over the past 30 years or so, notes Brian Kreps, the city’s social housing program manager.

Some of those providers have sold buildings, hiked rents or still have affordable units, Kreps says.

The city has tried to encourage some to stay the course with incentives like rent supplements.

“We’ve been able to offer some of those to providers, but we haven’t had enough money to offer them to all.”

‘Real value’

Social assistance rates that lag behind the cost of living have sharpened the housing affordability crisis.

They have stagnated for decades, notes Open Policy Ontario, a social policy consultancy led by John Stapleton and research associate Yvonne Yuan.

For instance, while inflation in Ontario was nearly 61 per cent between 1994 and 2020, increases in the Ontario Disability Support Program (ODSP) for singles increased by 26 per cent and Ontario Works by 12 per cent during the same stretch.

“In other words, the real value of these two social assistance programs actually decreased,” Stapleton and Yuan noted in a presentation focused on the COVID-19 pandemic.

Put more starkly, ODSP has dropped in “real value” by 22 per cent and OW by 31 per cent since 1994, they noted.

Ontario’s minimum wage has increased in the past 10 years, plateauing at $14.35 an hour, notes Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction.

But that’s not enough, especially considering many low-income workers cobble together part-time jobs, in some cases, with no guarantee of hours from one week to the next, Cooper said.

“So that makes it really, really difficult to plan how they can pay rent or put food on the table.”

‘Hamilton is Home’

In light of the challenges, local non-profits like Indwell and Sacajawea have teamed up with other community housing providers to build 3,000 new affordable units in three years.

The initiative, called Hamilton is Home, takes a collaborative approach with the partners working together on potential sites, sharing expertise and pooling assets.

“The intention of us coming together is that we don’t need to be duplicating work right now,” says Lauren Blumas, director of corporate and legal with Victoria Park Community Homes.

One example is the limited partnership between Victoria Park and Hamilton East Kiwanis Non-Profit Homes for the former site of Mountain Secondary on Caledon Avenue where a mixed-income community of roughly 300 units is in the works.

The city spent $3 million on the 7.2-acre property in 2018 and council approved its sale to the partnership through a $5million forgivable loan last year.

Blumas says the large site off Upper James Street by Mohawk Road West had great potential to fill an affordability gap on the Mountain, but presented a big risk as a solo project.

“It wasn’t something that either organization was willing to do alone, but together was something we felt we could do.”

This past summer, diggers reduced the school to rubble. City approvals are still pending for a plan that includes stacked townhouses and two eight-storey apartment buildings.

With a budget of about $100 million, Victoria Park and East Kiwanis will contribute about $35 million, with the hope of covering the rest mostly through low-interest loans from the Canada Mortgage and Housing Corporation (CMHC).

The apartments will have a range of rates based on average market rent (AMR), as determined by CMHC data: 80 per cent AMR, 100 per cent AMR and 125 per cent AMR.

AMR skews lower than what private sector landlords ask for upon turnover. For instance, in October 2020, CMHC’s AMR for a one-bedroom unit in Hamilton was $1,033, considerably lower than the $1,491 in Rentals.ca’s report for the same period.

The next generation of community housing won’t reach the deep affordability of yesteryear, acknowledges Brian Sibley, executive director of East Kiwanis.

The CMHC’s lending rates are good, offers Sibley, “but it’s still a loan that we’ve got to pay back.”

A popular “misconception,” he says, is that building affordable housing is less expensive than market construction. “The cost is the cost.”

During the many years of negligible government funding, non-profits like East Kiwanis let their internal development capacities dwindle, Sibley adds.

The upshot means hiring private enterprise to carry projects through — including for the non-profit’s 60-unit solo project on Acorn Street off Sanford Avenue North.

Sibley estimates the budget for the eight-storey building on land — most of which East Kiwanis had already owned — is likely to settle at around $21 million. The hefty price tag — not to mention the potential for rising interest rates — makes it tricky to manage more than one project at a time, he says.

“We’re not-for-profits, so we don’t carry millions and millions of dollars in cash reserves.”