Majority of affordable homes approved under federal program not yet constructed

By Nojoud Al Mallees, The Canadian Press on January 29, 2023.

OTTAWA – The federal government has set aside billions of dollars to quickly build affordable housing across the country, but delays in construction suggest many of the projects approved for funding are missing their deadlines.

The Rapid Housing Initiative is a federal program launched in 2020 that provides funding to cities and non-profit organizations to build affordable homes for vulnerable Canadians, including those experiencing homelessness.

The federal government offered $2.5 billion during the first two rounds of project funding, with the condition that approved units must be built within 12 months in most places or 18 months in northern or remote communities.

But a document put together by the Canada Mortgage and Housing Corporation in response to a written question from a member of parliament shows the majority of units approved have not yet been constructed.

The first round of applications closed at the end of March 2021 and resulted in 4,792 units approved for funding, while a further 5,473 got the green light during the second round that closed a year later.

The response from CMHC, which is dated Nov. 30, says only 1,449 units have been completed

Neither CMHC nor Housing Minister Ahmed Hussen’s office would say how many projects missed the 12 or 18-month deadlines. A CMHC spokesperson, however, acknowledged some projects have been delayed.

“Due to unprecedented circumstances faced by housing developers over the last few years including supply chain disruptions, rising costs and severe weather-related events, some projects are expected to and will take longer, mainly due to infrastructure and construction challenges,” said Leonard Catling.

Carolyn Whitzman, a housing policy expert and adjunct professor at the University of Ottawa, says the federal government has touted the RHI as a success story because more units than anticipate have been approved for construction. The first two rounds of approvals exceeded targets by a combined 2,600 units, she noted.

But Whitzman says there are several obstacles hampering many affordable housing projects, including pushback from residents and a lack of support from provincial governments.

“In order to get supportive housing through rapid housing initiative or any other program up, you need really strong collaboration between all three levels of government,” Whitzman said

She says housing construction has also been affected by rising costs and labour shortages.

In November, the federal government announced the third round of the RHI, which will provide an additional $1.5 billion in funding.

The federal government has extended the construction timeline for that round to 18 months for most homes and 24 months for projects in northern or remote communities.

Prime Minister Justin Trudeau’s government made affordable housing a cornerstone of its agenda to support and expand the middle class. It announced its national housing strategy in 2017, which is a ten-year plan that pours tens of billions of dollars into affordable housing

But the Liberals have faced criticism for the execution of its plans.

In a report published in November, auditor general Karen Hogan found the government was not tracking its progress on reducing chronic homelessness, despite a stated goal of reducing such conditions by 50 per cent by 2028.

Hogan’s report found there are data gaps across the federal government that make it difficult to assess the success of programs.

CMHC, in its capacity as leader of the national housing strategy, has spent $4.5 billion since 2018. But the report found the corporation doesn’t know who is benefiting from its programs.

Whitzman said failure to track program success can lead to public distrust and raise skepticism about whether problems like housing affordability can even be addressed by the federal government.

“If you’re gonna put billions of dollars into a program, you’ve got to track the effectiveness,” she said.