Hundreds of thousands of poor people in Ontario â€“ whether they work or receive social assistance â€“ spend more than half their income on shelter. This is a proposal to address this feature of poverty in Ontario by designing a new housing benefit.
A broad coalition from the rental housing industry, the non-profit housing sector, the community-based sector, as well as two private foundations, came together to develop these ideas.
It is no accident that the coalition includes Daily Bread Food Bank. According to the food bank’s 2008 survey of its clients, the average food bank client paid 77% of income on rent and utilities. When people have to pay the rent, they go without food. Forty-two per cent of the people in the food bank survey said they had gone without food for a whole day at least once during the past year.
Organizations representing the landlords who rent to the poor are also a part of this coalition. They know how housing markets work in this province. They know, for example, that the cost of housing is much higher in larger urban centres. Yet the housing benefit that people on welfare receive is based on the same formula no matter where the recipient lives. This proposal suggests a way to address that disparity.
The coalition also includes social policy consultants who are trying to draw attention to the unintended ways that tangled welfare rules defeat the very people doing their best to get ahead. Welfare rules and practices are partly responsible for inflation at the low end of the rental market. Some landlords inflate rents to match benefits, and both the poor and the government pay for it. There are ways to change welfare practices so this can’t be done so easily. This paper talks about how to do that.
Social housing â€“ housing that charges rent geared-to-income â€“ is a very limited resource in this province. It represents only 5% of the total housing stock and 18% of the rental units. The waiting lists are many years long.
There is no housing-related income program to help the working poor in Ontario. Â Thousands of working families in our province pay over half their income on rent. This paper proposes a housing benefit that would extend to the working poor and help to stabilize them in the workforce. It would also create a new, transitional mechanism for people moving from welfare to low-paid work, easing the housing burden while they attempt to escape from the welfare trap.
The new housing benefit we describe in this paper has contours similar to the recently introduced Ontario Child Benefit. It would create a new form of income assistance, outside of the welfare payment system. It would remain in place once a welfare recipient leaves social assistance for work, but phase out as income rises and self-reliance grows.
Under the current rent subsidy system for those on Ontario Works and disability benefits, it is possible, in some parts of Ontario, for the government to pay 100% of a person’s rent. This proposal is designed to make sure that tenants carry a portion of their rent as a personal cost. Why? Because poorer people should have a stake in seeking out the best value they can get for their housing money. When poorer people begin acting like consumers in the housing market, they bring competitive forces to bear on landlords, and help to stop rent inflation.
A carefully designed housing benefit could significantly improve both housing and poverty outcomes in Ontario. We argue that it would involve minimal new cost to government, provided there are significant reallocations of existing program spending to support the new design.
This proposal focuses on a Housing Benefit as one part of a broader solution for addressing housing-related poverty. While it is a key component from an income standpoint, it should be regarded as complementary to a range of other solutions needed to address the shortage in the supply of affordable housing.