Federal housing fund shutting out rural communities

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Michael Lewis

Special to CaDCR

The way Centre Hastings Mayor Tom Deline sees it, smaller communities are at a disadvantage when it comes to getting approved for the federal government’s Housing Accelerator Fund.

He is among mayors in rural regions in Ontario and across the country who have spoken out about Ottawa’s decision to deny their applications for funding through the $4 billion Canada Mortgage and Housing Corporation’s program for municipalities and Indigenous governments.

The application based HAF, divided into streams for smaller and larger centres, was unveiled in the 2022 federal budget with the objective of fast tracking more than 107,000 permits for new homes in the program’s first three years.

Over the next decade, the funding agreements with municipalities will be responsible for more than 750,000 newly permitted homes, the CMHC says.

Prime Minister Trudeau in April announced a $400 million top-up for the highly over-subscribed program, with only 179 of the 540 applications resulting in funding agreements.

“I know there only so many dollars, tax dollars, but you almost get the feeling because we are small, we get left out of the process. That’s not a very good feeling,” Mayor Deline said. “We have seniors to look after. We have young people who need housing.”

Mayor Deline said he’s aware of only one other small community in Hastings County in eastern Ontario along with “some of the native communities” that have been approved for funds to construct more homes at a faster pace.

He said Centre Hastings’ application to the CMHC detailed “a very aggressive policy” that would see the community of about 5,000 double its output to add another 800 housing units over the next 12 to 15 years. He said the community is grappling with growing demand for accommodation including low rise seniors’ rental apartment buildings.

Tom Deline
Tom Deline

Mayor Deline added that the region offers greater bang for the buck compared to major centres that have been approved for HAF grants, suggesting that lower construction costs mean Centre Hastings can build a third more housing than Toronto at a comparable investment.

He also noted the smaller municipalities are less able relative to big cities to raise funding for housing through municipal property tax hikes.

“It’s a little disheartening because of what we went through we didn’t get to the final stages. We’re ready to go,” he said adding that Centre Hastings is in the process of reapplying following the top-up announcement.

Mayor Deline said the municipality spent more than $250,000 on studies to support its HAF application, research that he said can be used for other applications and planning exercises in the future.

“I understand the housing needs in our biggest cities are great, but shutting out rural communities is unacceptable,” said Prince Edward County Mayor Steve Ferguson after the county learned its $14.2 million application was denied. He said neighbouring municipalities Quinte West and Belleville were also denied assistance to create affordable housing.

Mayor Ferguson said the county, on the eastern shores of Lake Ontario, was forced to apply under the large/urban application stream because its population is greater than 10,000.

“Perhaps not surprising, then, that the vast majority of funding in this stream has gone to large urban centres. In fact, according to our analysis, only two rural Ontario municipalities have been awarded funding in this stream, for a total of $12 million of the $3.5 billion awarded to date.”

He said he is calling on the CMHC and the government to review the program and any future programs under the National Housing Strategy to make the distribution of funds “more equitable across communities of all sizes.

“We are in the middle of a housing crisis, and the government of Canada’s approach risks leaving many rural residents without a place to call home.” Mayor Ferguson added that the county is considering another application given the top-up and after lobbying “just about everyone.”

Officials with the Town of Bancroft, another Hastings municipality denied program funding, will also resubmit an application once the next round is announced, said Mayor Paul Jenkins, adding that the town has received no feedback on its initial proposal.

Along with the mayors of Hastings, Prince Edward County and Bancroft, leaders in Ontario communities including Peterborough, North Perth, Mapleton and the northern six municipalities of York Region have all publicly responded to the denial of applications, saying they are missing out on millions that would have helped bolster housing supply.

“Unfortunately, not all applications could be funded due to the high demand for the HAF. The evaluation process was highly competitive, with many strong applications received,” a CMHC spokesperson said in an emailed statement.

“Although we are unable to speak to specific applications, to secure federal funding cities across Canada revised their applications to include more ambitious measures” such as the elimination of low-density zoning that excludes housing types such as affordable and social housing in residential areas.”

These measures could also include adopting more as-of-right zoning to modify limits on the number of units and storeys, the CMHC says.

“In assessing applications, the government balanced prioritizing the most ambitious proposals with ensuring agreements with communities of all sizes – including the country’s largest cities, mid-sized cities, suburban communities, rural and remote communities, and Indigenous communities – right across the country.”

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