The provincial government's rent freeze could create a funding gap for boards providing social housing, municipal representatives say.
Normally, cities and towns that provide rent-geared-to-income (RGI) housing get a bump from tenants whose incomes go up, since they pay about 30 per cent of their income in rent, as opposed to a fixed amount.
Under the province's rent freeze legislation, tenants whose income declines will still pay less rent. But those whose incomes increase will no longer see their payments go up between Jan. 1 and Dec 31, 2021.
For Sault Ste. Marie, that could cost the city around $400,000, local social services board CEO Mike Nadeau told <a href="https://www.sootoday.com/local-news/how-ontarios-rent-freeze-law-may-hike-your-sault-ste-marie-tax-bill-2874962" target="_blank" rel="noopener noreferrer">SooToday.com</a> — though it's "an imperfect science" trying to estimate costs for 2021 based on pre-pandemic data, Luke Dufour, the chair of the District of Sault Ste. Marie Social Services Administration Board, told QP Briefing.
He said he's spoken with local MPP Ross Romano's office, and they're "pretty much all on the same page" — that the gap is an "unintended consequence of a well-intentioned piece of legislation" and should be fixed.
Dufour said he plans to send a letter to Housing Minister Steve Clark next week outlining the issue, but that it isn't meant as a criticism of the government or the rent freeze, which he supports.
With the qualification that he's not an expert in legislation, Dufour said an exemption to the rent freeze for RGI units might make the most sense, since it wouldn't cost the government anything extra.
Bill Bradica, the chief administrative officer of the District of Thunder Bay Social Services Administration Board, said he estimates a $200,000 shortfall if the issue isn't fixed.
It would be borne through the board's levy to its 15 member municipalities, which they can't afford, he said.
"With all the other costs that they're facing, including increases from the public health unit and EMS services and policing, that they're really not able to afford even small increases like this," he said.
The board passed a resolution in October asking Clark to offset the revenue loss from the policy.
"We are concerned that with COVID that people may be struggling, but if their incomes do increase they would have additional funds to pay for an increase, and our cost of operating will be going up regardless," he said.
Bradica added that he was confused that co-op housing providers were exempted from the rent freeze legislation.
"It really doesn't make sense to us as to why co-ops were exempted and community housing was not," he said.
A number of municipalities have raised concerns about the potential cost, said Brian Rosborough, the executive director of the Association of Municipalities of Ontario (AMO).
“It will result in revenue reductions for municipal housing providers and DSAABs," he said, referring to district social services administration boards, which provide social housing.
The City of Hamilton said it's also concerned about the potential impact to the community housing sector, though it supports efforts to make housing more affordable.
"Staff are currently working with Hamilton’s social housing providers to understand the scope and financial impacts of this and will be reporting these findings back to council on December 10," city spokesperson Aisling Higgins said in an email.
Dave Purdy, the manager of housing services for the City of London, said the city hasn't finished analyzing the potential impacts, but is "closely watching" how it could be affected. He said he "remains optimistic" based on Clark's promise to consult with service managers over the fall.
A spokesperson for Peel Region said it's still assessing the costs to its housing system as well.
Rosborough said he's optimistic governments will come through with more help next year. AMO is treating the issue as part of its overall strategy for negotiating help for COVID-related expenses, he said.
"We’re not isolating this as a one-off," he said.
NDP housing critic Sara Singh said the government should act quickly to fix the gap.
"We've been pretty clear that we really can't pit tenants and community housing against municipal taxpayers," she said.
"I think that the government needs to understand that there is going to be an impact to municipalities and their bottom lines, and that's going to have an impact down the road on the services that they're able to provide."
Singh also called on the government to increase support for municipal housing overall, which she said has been underfunded for decades. Rent banks and subsidies would also help struggling tenants, she said.
QP Briefing did not receive a response from Clark's office or the ministry itself.
While AMO isn't pressing the Ford government on this issue specifically, Rosborough said it made clear when the rent freeze was announced that there will be costs to landlords — in this case, cities and towns.
"And I think there's some suggestion that the government is open to mitigating those. Nothing concrete, but as I said, it may be really a question of a bigger picture discussion around impacts in 2021," he said.
The federal and provincial governments came through with $4 billion in combined funding for Ontario municipalities this year, which has almost fully offset the losses communities faced due to the COVID-19 pandemic for 2020, Rosborough said.
He said he's confident that that's not the end of the support, and that conversations between AMO and higher levels of government are ongoing with regard to help for next year's costs.
"While this will certainly have an impact as other COVID-related activities do, we certainly expect that in 2021, as financial impacts of COVID, including this impact, are understood, that we will still be in a position to receive assistance from the federal and provincial governments to help offset these costs," he said.

Rent freeze could unintentionally hurt social housing providers, officials say

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