The province's financial watchdog says the need for affordable housing and the homelessness crisis will worsen by 2025
Demand for housing in Ontario will increase by over 80,000 households from 2018 to 2027 due to insufficient provincial and federal funding for housing and homelessness programs, according to a Financial Accountability Office of Ontario (FAO) report released on Thursday.
Ater accounting for expiring funding, the province’s financial watchdog said that even with new commitments under the National Housing Strategy (NHS), Ontario’s annual spending on housing programs will be consistently lower than 2018-2019 spending until 2024-2025.
From 2014 to 2019, the province spent an average of $856 million per year on housing, but the FAO projects that from 2020 to 2028, spending will average $696 million.
In a statement from Stephanie Bellotto, spokesperson for Minister of Municipal Affairs and Housing Steve Clark, the province said the issue is the lack of support from Ottawa.
“Under the National Housing Strategy, Ontario currently receives $490 million less than its fair share, when compared to households in Core Housing Need across Canada,” Bellotto stated.
The report uses the term “core housing need” to describe Ontarians who need housing-related financial assistance and do not currently live in acceptable housing, meaning housing costs that equal or less than 30 per cent of before-tax income.
The report states that the number of people in households in core housing need increased by 19.1 per cent from 2011 to 2018, while the number of households receiving support decreased by four per cent over that same period.
“Since 2011, the number of households in core housing need has increased while the number of households receiving housing support from provincial programs has decreased,” the report noted.
The FAO predicted that that number would only continue to increase in years to come, estimating the total number of households in core housing need will increase by 80,500 to 815,500 by 2027.
“This is due to the FAO’s expectation that population growth and higher housing costs will more than offset household income growth and the incremental support provided by provincial housing programs through the NHS,” the report stated.
Another key component contributing to the gap between demand and supply is the Canada-Ontario Housing Benefit (COHB), which provides a subsidy equal to the difference between 80 per cent of average market rent in the household’s area and 30 per cent of a household’s adjusted net income.
The FAO estimated that 55,300 additional households will receive housing support in the 2027-2028 year.
However, while rent-geared-to-income (RGI) housing guarantees that a household will be removed from core housing need, only 15,100 of the new households will receive RGI support. The rest, 40,200 households, will be primarily supported by rent supplements under the COHB.
But only about 30 per cent of those households supported by the COHB will be removed from core housing need in 2027-2028. The average annual level of support the COHB provides will be $6,600, which doesn’t match the average of $7,600 annually that vulnerable populations will need in that year to be removed from core housing need.
Mikaela Harrison, press secretary for the Minister of Families, Children and Social Development Ahmed Hussen, wrote in an email statement that while the COHB may not “completely remove” every household from core housing need, the program was intended to reduce the “depth” of need experienced.
“We know there is more work to do,” she acknowledged.
The FAO found that in 2018, 31 per cent of renters who received support from the province’s housing programs were still in core housing need.
The report also noted that the province’s target to end chronic homelessness by the end of 2025 will be unachievable, once again due to a lack of funding.
The FAO projected provincial spending on homelessness programs to grow at an annual average of 3.4 per cent, increasing from $403 million in 2020 to $446 million by 2023. However, that spending growth is less than half of the growth from 2014 to 2021, which grew by eight per cent.
With less households receiving housing support overall from 2012 to 2019, the wait list for social housing also increased by 27 per cent. The FAO predicts that wait list will only become even longer by 2027.
Overall, the report stated that the high rate of core housing need is driven by housing affordability, a major problem in Ontario. The province has the second-highest rate of core housing need in the country, and over 90 per cent of core need households in Ontario are living in residences considered unaffordable based on their income.