Has Covid Amplified the affordable housing problem? This has been a hot topic for a long time, not just in Canada & USA, but many other parts of the world. In doing my research for this article, wow, it is a hot topic that brings forward strong opinions and heated debates. Is it a right or a privilege? I did not want to approach this article with any bias, so what I have done is provided a list of things to think about. There are articles on all these topics, with various points of view on each. What it comes down to is a bunch of factors, and no clear solution. In fact, I am a bit overwhelmed after writing this, it has really opened my eyes to all the challenges that we face as a society when it comes to affordable housing. If you are ready to go down the complex rabbit hole of the affordable housing issue read on.
Not in my backyard – people want to solve the affordable housing issue, as long as it does not affect them.
Who wants density? – Density is great as long as my neighborhood is not included,
Low income tenants are destructive – low income tenants are loud, destructive, and disrespectful,
Drug addicts rent rooms – People who live in rooming houses are usually addicted to drugs, destructive criminals who fight a lot and cause problems in neighborhoods.
Low income handouts – Low income tenants are just looking for a hand out from the tax payers.
How do you house the un-housable? – Well there is a certain segment of society that for many reasons cannot either maintain a home, get along with others in a home, or be considerate of others in a home. Some things that may lead someone to this point could be caused by drug addiction, having a life without any positive role models, anger management issues, a life filled with abuse and trust issues, and various mental health issues. It makes these people very hard to fit in our societal social norms of what a peaceful housing arrangement consists of. Generally people live with or around other people do to like minded thoughts and interests. Some examples could be students who share a home, they are all in the same situation, so everyone understands that no matter how much they want to party, in order to be successful in school it requires some quiet study time. Another example could be work related, often when workers come to a city to work for a large company they will live together. When you deal with folks who have had some challenges in life and you try and put them together, unless you have a lot of supervision it generally does not work very well. Then if you integrate folks with major life challenges with others, it often ends badly. If you have been involved in the low income rental market, you will know the challenges go beyond what is listed above, but also includes issues around things like money management, personal hygiene, hoarding, and general cleanliness. These additional challenges can amplify the other issues, which can then lead to additional health and mental barriers. When you dig into what it takes to house a person or family, you will uncover challenges that you never even thought of. It is a very layered issue, way more complex then taking a person in scruffy clothes panhandling on a street corner, and providing them a shower, clean clothes and nice accommodations.
How is it possible to house people who can’t function in a “normal” living environment? (similar to above section). Is it realistic to take a person addicted to drugs or alcohol and just give them an apartment? What resources are in place to set them up for success? Cleaning, basic hygiene, neighbor interactions, are all real issues that cannot be ignored.
Zoning laws prevent density – City councils say they want density and affordable housing, however, they are reluctant to change zoning laws to permit density,
Push back on additional suites – Neighborhood groups are pushing back on cities looking to allow additional suites in single family homes and backyard suites.
Square footage requirements – Governments at all levels are reluctant to change building code laws that would allow for smaller square foot homes
Land use by-law changes – Municipalities are reluctant to change land use by-laws that would allow for more than one house to be built on a single lot
Rooming houses get banned – Municipalities are over regulating the requirements or banning rooming houses, making it impossible to set up a rooming house. This can include not allowing renting by the room, maximizing the amount of rooms that can be rented in a house (regardless of the square footage), building code rules that make it no longer financially viable, such as: solid wood or metal plated room doors, fire alarm system, out swing exit doors, emergency lights in hallways, metal doors on furnace rooms and not allowing locks on bedroom doors.
When youth age out of foster care and group homes – One little talked about area of the affordable housing issue is around what happens to youth that have been placed in group homes and foster care age out. Meaning they become too old for youth programs. That can be somewhere between 18 – 21 years old. Then we expect these children who likely faced a life of trauma to find affordable housing. Who is willing or able to take responsibility for these people? Who teaches them how to budget money, cook, clean, etc.?
Municipalities are over regulating the amount of rooms a homeowner can rent to boarders, such as only allowing an owner occupied home to rent three rooms (regardless of square footage).
Shipping containers could be a great housing solution, however, between zoning and building code requirements in many areas they are not permitted to be placed in a lot of areas.
The Tiny home movement – This has been growing, however, most zoning laws do not permit tiny homes. It could be a great solution if they can get around the zoning and code red tape.
Taking responsibility for the high cost of bad tenants – Tenancy boards, social groups, low income advocacy groups, are not willing to take responsibility for tenants who do not pay, or cause destruction in properties, making landlords reluctant to rent to riskier tenants. The blame gets placed on lack of resources rather than hiring cleaners, paying for damage, and just working on solutions rather than placing blame on landlords.
High cost of insurance – Insurance companies are not regulated and cause many landlords to either not properly insure a building, or not get into a certain type of rental business based on the cost. The high cost of insurance is causing many landlords to get out of the small property business.
Financial institution regulations – Many financial institutions will not openly finance properties such as rooming houses, or homes that are going to be rented by the room. They are also reluctant to finance many multi-family properties. They generally require larger down payments, and higher credit rating / income requirements from borrowers.
Developers need more units to make buildings financially viable due to the high cost of land.
Developers are reluctant to mix low income people in families with higher income level people in the same building.
Developers are finding many municipality guidelines for square footage, green space, and parking, are making it not financially viable to build affordable housing units. – Such as in one major city in the USA, the developer requires every unit to have a minimum of a 300 sq Ft parking space, and a minimum of 200 sq ft of green space. That means a 600 sq ft apartment requires a total of 1100 sq ft. What this forces developers to do in this city, is make high end luxury units.
Should developers be rewarded for making part of their projects affordable? What does that mean? In our area there are a couple of interesting ideas that of course are being met with skepticism. One idea is that a developer can buy more square footage approval by either adding some affordable housing units, or paying into an affordable housing fund. The program has faced criticism for a couple of reasons. I am going to over simplify, but basically here is why. The first reason is that developers building luxury buildings are willing and have paid into the affordable housing fund, but now the city has a fund building up that really does not solve any affordable housing problems. The second part is that since apartments are pretty large and amazing these days, when a unit is deemed “affordable” it does not mean it it free. A loose example would be lets say the market rent for a particular apartment is $1500 per month, the “affordable” rate might be $1100, which is still more than many people can afford.
New tenant expectations – The quality and size of apartments, as well as the expectations of tenants has changed dramatically over the past number of years. Many millennials are not buying homes in their twenties, part of the reluctance is of course due to the high cost of homes in most major cities, also expectations, after renting a two bedroom, two bathroom apartment, many with granite counter tops, huge square footage, soundproof walls and floors, it is difficult for them to enter the first time buyers market. When they find out the only homes in their price range are dumps, all of a sudden renting does not seem so bad. Many years ago apartments were not as glamorous, so moving to a home meant more space and amenities, and not a step backwards. Now, before you blame the millennials for driving developers to build these large apartments, it is also the older folks the baby boomers and pre-boomers driving the high end rental market. This crowd used to be huge into buying condos, but after being faced with issues around special assessments, rising condo fees, and the lack of flexibility should they want to trade up, many are choosing to rent. When you mix this with the red hot housing market, after they sell their home many have lots of cash, and expensive taste. This causes a demand for higher quality larger more expensive apartments. The smaller cheaper apartments that were built in the past are no longer worth building, because it can be easier to fill the larger more expensive apartments, with a generally better paying easier to manage clientele.
People who are used to living in squalor – Is it realistic to provide a room or a house to a person with poor hygiene, who was brought up in an environment of living in sub-standard conditions and expect them to keep a clean, sensible room without providing continuous support with cleaners, social workers etc.?
Do the social workers and housing advocates really want to solve the affordable housing problem, or just say they do? Do they have the self awareness to realize the risks involved housing some of their tenants, or are they just trying to put a band aid on the problem.
All citizens should receive a basic income – guaranteed monthly income – This has been a hot topic debated and tried in several countries, and right here in Canada not too long ago. See Ontario Basic Income Pilot, how it worked: “A basic income is a payment to eligible couples or individuals that ensures a minimum income level, regardless of employment status.” The object is that financial problems lead to housing issues, food security, mental problems etc. If it worked properly as a society it would significantly reduce healthcare, legal, crime rates, and make society better overall. Many low income advocacy groups have pointed out how the current system is not working. I mean a common scenario that gets played out is the underfunded welfare system. Give a single mom less money than they require to live on, tell her if she works money will be clawed back, so don’t try and better yourself. Then when she is late on rent and utilities, they get evicted, so now with no money and children by there side they have to find a new place. This can create a multi-generational family, that expects to run from landlords, and bill collectors. Maybe it is time for us to take a serious look at the basic living for all.
Capitalism / Stimulus / Money for all – This has been a topic of debate in many countries (also note above paragraph). In 1967, Martin Luther King Jr. said a guaranteed income would abolish poverty. The Balance.com offers a great article with more details about the pros and cons. Here is a website that shows everywhere in the world where it has been tried in one form or another: Vox.com. The interesting part about economic systems, is that over time as a society we need to be willing to change and adapt. The problem is that what prevents this is many organizations are hard liners on a system, until it does not work for them. Two instances in the past 12 years that show a pure capitalist economic system does not work is the 2008 financial crisis and of course COVID right now in 2020. Some of the economic buzz words during these times are phrases like: too big to fail, subprime mortgage crisis, credit default swaps, Unprecedented times, stimulus package, the new normal, human capital, and the biggest and most important on of all especially for the wealthy is bailouts. The other extreme is of course communisms and socialists theory’s first introduced in 1848 by German economists / Philosophers Karl Marx and Friedrich Engels with the publication of the Communist Manifesto not all new ideas, but perhaps published in the right place and right time, to have it still studied today. When we take a look at the world economic systems, it is easy to see that having an economic system leaning towards one way or the other always ends badly. Since governments are the major revenue collectors by way of taxes, they have to step in and do right by the people, or you end up with civil wars, revolutions, etc. like what has happened over time. Fortunately in Canada and the USA and thanks to democracy we may have differences of opinions, but as a collective we avoid serious conflicts, with a level of reason. This is regardless of the views of presidents or prime ministers, since they are seen more as civil servants rather than rulers. Is it time to use our money for a basic income. What if just for being born you get paid by the government? Would it solve the affordable housing issue? Would it have negative effects like accelerated inflation? Would it cause a generation of lazy workers? Would it end poverty? Would it save money on healthcare programs? Would it increase the health and well being of all citizens? How much would the government save on mental illness programs? How much would the government save on administration of social programs? Has COVID stimulus handouts proven that it is a good idea? Would it be good value for the dollar? Would it reduce overall taxes collected?
Do people know about their affordable housing options? In our area the provincial government handles the public housing program. When you read the website, it looks pretty great (Housing Nova Scotia) I also want to mention from what I have personally scene, Nova Scotia has some really nice public housing. In fact when Shelly first moved to the city and we were looking for a condo or townhouse, she mentioned an area that she referred to as having “cute little row houses”. It turns out the area she was talking about was a public housing neighborhood (so that should give you an idea of what housing is like around here). We also have some integrated public housing. This is where regular homes are purchased in nice areas, but they are designated as public housing units. From what I have scene first hand with some of our outreach work, is that it can be good or bad. When it comes to seeking affordable housing I think pride sometimes gets in the way, and people that would qualify often do not apply. I am not an expert on how affordable housing is distributed in Nova Scotia, but wow, on the website Housing Nova Scotia they appear to have programs for everyone, tenants and landlords, students, single people, families. I am sure it is way more complicated than it appears.
Can co-housing solve the crisis? Is it just the rebirth of hippy compounds, or a way that families can share resources. How do you select the correct people to be in the house, or housing complex? How would a mortgage work? What would be the exit strategy? In many ways it could be like a gated seniors community only with fewer amenities, The mortgages could be set up as individual shares, there are some vacation resorts set up this way already, so it would not be a new idea.
Is Habitat for Humanity the Solution to affordably Housing Families – According to Wikipedia here is how this organization is described. Habitat for Humanity International (HFHI), generally referred to as Habitat for Humanity or Habitat, is an international, non-governmental, and nonprofit organization, which was founded in 1976 by couple Millard and Linda Fuller. Habitat for Humanity is a Christian organization. The international operational headquarters are located in Americus, Georgia, United States, with the administrative headquarters located in Atlanta.[1] As of 2020, Habitat for Humanity operates in all 50 U.S. states and more than 70 countries.[2]
Is it a solution, well for some families it is a life changing affordable housing solution, that allows families to participate in home ownership that would otherwise never have the opportunity. The other part of the program that makes it amazing is that applicants get to participate in the construction of the home (guided by professionals of course).
Why do social programs set people up to fail? Picture single mom, bad choice in relationships, never taught to cook, clean or budget money. She meets a social worker, the worker sets her up with cash. Claims they will pay the landlord direct (reality is until they decide to re-direct the money). The money provided is way less than what is required to live on, so they are immediately set up for failure. The government programs that are designed to help, become a barrier, instead of a help. If they try to get help in the form of a roommate (they lose benefits) If they try and get into a relationship, they do not have an opportunity to nurture the relationship, because once again (they lose benefits). If they try to better themselves with a part-time job (they claw back benefits).
What kind of housing do people feel they are entitled to? I mean do people need to live along? Can two families occupy one home? What is wrong with having a roommate to help pay the rent? I can only speak to my experience, because I know it can be different for everyone. I will share my story as a renter in my past life as a young person just starting out. One experience I had was an arrangement with a friend for a year, because we wanted to live downtown in a building with an amazing location, and a pool. The rents of course were high, so we rented a one bedroom apartment, and agreed to one month on the couch and one month in the bedroom. I am not saying it was ideal, but to get that location it was great. Also one other experience was that I wanted to live in a student district, which was quite expensive, so at the time we searched the paper (yes this is many years ago) and found a bachelor apartment owned by an independent landlord, basically an old house chopped up into flats. Was it awesome?, no, did it have some mice? sure did, but we were able to make the most out of it, and with a little decorating creativity, made a pretty nice place. My point to this story is that I never felt “poor” or lived in dirty conditions (because with paint, bleach and some creativity, you can make just about any place nice). I also had to make sacrifices of privacy, square footage for location and my financial circumstances.
Landlord Abuse – Why are landlords often targets of abuse from tenancy boards and housing advocacy groups? Most landlords in Canada and USA are small business people. They often only have a few properties. It is a high risk low margin business. Most cannot afford the mortgage, maintenance, property tax, water, and any other common bills without rental revenue coming in. In reality it should be a pretty simple business – landlords provide housing in exchange for a rent payment. If there is an issue with the property, then they contact the landlord and they fix it. If the tenant stops paying rent, they get evicted. If the landlord is not great with maintenance / repairs, the tenant finds a different place to live.
Bad landlords – Are there bad landlords? Yes absolutely, but do governments, tenancy boards, affordable housing advocates ask why a landlord might be considered bad? The basics in the landlord business are you can purchase A, B, or C buildings. Then you have well resourced landlords (they buy a building and either have money, or put money aside for maintenance and repairs), or many landlords are under resourced, then if they buy buildings in areas where the majority of the tenant base causes maintenance, repair, rodent, and mold issues, they are accused of being bad landlords. The interesting part, is that there are very few repair and maintenance housing advocacy groups, who are willing to join forces and make a building they are living in better. I have read articles about this working in many communities. One major success story in my area is by a company called Vida Living who have a tag line of “Revolutionizing Affordable Communities For All” – they operate off 4 main pillars: Safety, Cleanliness, Community and Opportunity. The long term goal stated on their website is: VIDA Living is a new, community-focused effort to raise the standard of affordable rentals in North America.
That being said, yes there are some really terrible, greedy mean spirited scrooge type landlords out there. The type that would board up a building before they spend money on it. The type that does not care about tenants. The good thing is that, these are not the norm. The truth is that the property management and landlord business is virtually completely unregulated, this of course leads to many challenges. I think that before a landlord is judged the situation needs to be investigated.
Rent control – Is it good or bad? Does it work? Is it good for landlords? Is it good for tenants? This is a huge debate, It is also a really mis-understood concept. It sounds great on the surface, almost a big win for tenants, the challenge is that once you peel back the layers, there is a strong argument that suggests it may not be as good for tenants as they think.
Credit, criminal and landlord reference checks limit rental options – This is another area that I have read many articles about. We do credit checks and so do many other landlords we know. It becomes a real challenge for people especially in hot housing markets to qualify for an apartment, especially if they have bad credit or a criminal record. This can be a major barrier for a person trying to find an affordable place to live. A person with risk factors such as lack of ability to pay bills, or of making choices that led them to serve time or get a criminal record, marks them as high risk when property managers are reviewing an application, especially if they do not have a past landlord that can say great things about their rental history.
Gentrification – Are cities are more interested in getting money from developers, than helping low income residence stay in their homes? This seems to be a hot topic in many areas. As cities grow, standards of living increase, along with land values, many areas are being redone. What is happening is that landlords want to change, redevelop, and turnover existing tenants for new ones. This creates a problem for many long term residents, that may find themselves forced out of their long term home based on rental increases. In fact in my area a building that sold in a gentrifying area had a clause written in the deal to protect two long term tenants from being evicted or having any rent increases over a period of years. Not all landlords / building owners are that caring. The question becomes where are these people expected to go, and who should be helping them? Is it the new landlord / developer? Is it the City or county? Is it a higher level of government? Is it the low income housing advocacy groups like ACORN in Canada, or maybe it is a group effort.
Why people should care about affordable housing? If the gap between the have and the have nots grows in a community, crime increases, civil unrest increases, tax payers move out, making the community worse and worse. We have seen it in many areas of the USA where crimes of opportunity are so rampant people are not encouraged to go there. Think about that for a moment (Is the USA the land of the free?). Once the economy of an area collapses due to a lack of jobs, substance abuse problems increase. The community then gets worse and worse.
Well, when I started this article, I thought it would be just a few bullet points, but as it turns out, the affordable housing issue has not only been amplified by COVID but is a really complicated issue, full of various moving parts, levels of government, and of course various people and personalities.
Until next time,
Design your landlord experience,
Michael P Currie
Landlord by Design
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