Reducing poverty is usually seen as a task of the provincial and federal governments, but there has been little action from those levels and measures are available to city council to significantly assist low-income residents with the largest part of their cost of living. Increasing spending and tax fairness for the fifth of Hamiltonians living in poverty could boost the local economy and start to tackle the city’s most persistent challenge during the 2015 budget process that begins this week.
Statistics Canada reports that the poorest fifth of Hamiltonians use nearly a third of their income for housing. That’s twice the percentage allocated to shelter by the city’s richest fifth and underlines the affordable housing crisis that has over 5400 households on a waiting list for shelter they can afford.
Average shelter costs are lowered by 14,600 rent-geared-to-income units in the city. Many low-income residents actually spend over half their money just to put a roof over their head including 21 percent of Hamilton tenants.
Council could assist apartment dwellers by moving property taxes on multi-residential buildings toward levels imposed on other city residents. Apartments are currently charged 2.74 times the tax rate of single-family homes resulting in approximately one-fifth of rents paid by tenants going into municipal coffers.
Since the 1990s, provincial policy has directed cities to equalize property tax rates, but the only enforcement method has been a ban on raising taxes on those property classes where current rates are above the provincial average. That helped convince city council to slash industrial and commercial property taxes by 40 percent in the first few years after amalgamation, but reductions for apartments were not approved.
Council did decide to apply the single-family home rate to newly-built apartments – as a way to encourage increased construction activity and new tax revenues – but this hasn’t been done for the existing buildings that provide nearly all lower-rent units. Provincial law requires that any tax cut on apartment buildings greater than two percent be passed on entirely to the tenants – so reduced rates would be a direct way to put more money into the pockets of many of the lowest income residents in the city.
Provision of additional affordable housing also lies within the jurisdiction of the city – although this is more appropriately addressed by national or provincial governments who have income tax revenues. In Canada, however, federal housing programs were transferred to provincial governments nearly twenty years ago, and that was followed in Ontario downloading to municipalities in the late 1990s.
Starting in 2000, several plans for more affordable housing have been put together by Hamilton officials, but no effective action has meant the problem has only gotten worse. The current official strategy, initiated in 2011 to meet provincial requirements, calls for $30 million a year to construct more housing units, and another $13 million annually for rent subsidies and renovations to existing stock, but so far hasn’t received any city dollars. Staff are promising to bring a report to council this year “with a robust financial strategy for the investments needed to implement the Action Plan” but that will certainly be dependent on federal and/or provincial financial support.
The city’s annual capital budget of about $200 million allocates a half million to “repair and regeneration” of social housing. Last year and again in 2015 that $500,000 is being used for a building condition assessments with actual repairs slated for 2016-2023. Also in 2014, $571,000 went to repairs of a parking ramp at the city’s Sandford Avenue housing complex. Two other recommended projects were not funded – one to fix electrical panels that present a fire danger in two other city-owned towers (cost $700,000) and the other to deal with cracked foundations in townhouses on Montcalm Drive (cost $750,000) where a quarter of the units report wet basements.
Allocating more than half a percent of the capital budget to housing would require more taxation or a shift in priorities. Last year road construction and repairsate upalmost half the budget. Council could also begin to negotiate inclusion of affordable units in all new residential developments over a minimum size – an approach already taken by some other municipalities.