Every little thing

Days ago we asked for some hot ideas on how to save the nation. The roar from the steerage section was deafening. Suggestions flowed – thoughtful and practical – which by the end of this week will be in the hands of the leader of His Majesty’s Loyal Oppositions, aka Skippy.

A theme when it came to addressing the nutso cost of housing in Canada was this: back off. The best thing government can do is get out of the real estate business, and stop increasing demand. That went from scrapping CMHC to treating houses like every other taxable asset. Let the free market be free, the people cried, and stuff will get sorted out.

Amen. So proud of you, flock.

And this brings us to today’s episode of ‘Every Little Thing she Touches goes Toxic’ (music by The Police) – an ongoing tale of a woman (we’ll call her ‘Chrystia’) and the crisis of affordability her good deeds are making worse.

Where to start? How about the miserable, star-cross shared-equity mortgage?

It was a dumb idea from the get-go, whereby taxpayers would chip in up to 10% of the downpayment on a home purchased by newbies. The gift would be repaid only after 25 years or when the property was sold, with a small amount of any gains going to the feds. The idea of the government giving people money to buy a leveraged residential asset was daft enough (since no renters benefit from Ottawa largesse), but restrictions put on income and max house price were unrealistic, unworkable and destined to spell failure.

So, fail it did. The plug has now been pulled. Instead of helping 100,000 dewy young couples get housed and shelling out $1.25 billion, the program received fewer than 19,000 applications, cost us $285 million. Of course, administering this turkey took millions more. And there will be residual costs – for up to a quarter century from now.

But wait. It gets worse. Didja hear about Hudson House?

This is a 23-storey rental building in Victoria that Chrystia visited three days ago, touting as a prime example of your tax dollars hard at work. Doing what? Making bank for the developer and owner, of course, thanks to a pot of money called the Apartment Construction Loan Program.

What is this program, you ask?

It hands over up to 100% of the costs involved in erecting new rentals. Developers make interest-only payments during construction on giant loans with 50-year amortizations at fixed 10-year interest rates. There’s also free CMHC insurance (developers pay no premiums). Another $15 billion is due to be thrown in soon because, ya know, Chrystia has so much extra money.

She said:

The completion of these 245 new rental homes is a prime example of how the federal government is building more homes for everyone, including families, younger Canadians, and persons with disabilities. Hudson House, which includes 39 accessible homes, will rent 227 homes at or below 30 per cent of the median local household income.

Well, not exactly. Turns out Hudson House is anything but affordable. Two-bedroom units start at $3,300. The cheapest one-bedder is almost $2,500. A studio apartment of 330 square feet is an eye-watering $1,680 for a space a couple of chihuahuas would find tight. The average rent paid in the city, by the way, is just over $1,500 monthly.

“Life at Hudson House is made up of efficient layouts, modern design, and Instagram-worthy views, with thoughtful touches that rethink what livability means in a rental,” says the developer. “Toss keys, mail, or leashes in a handy entry niche, sleep soundly on a murphy bed in select studio homes, and do all your laundry loads within your suite. Homes have just the right amount of detail and style for you to uniquely express yourself.”

So how did these guys qualify for $100 million in taxpayer money with dream terms to build something most people can’t afford?

Simple. It’s another rushed, flawed, kneejerk program in a federal housing response which is political, disjointed, patchwork and ultimately meaningless – like the shared-equity mortgage. Hudson House had to commit to offering just 20% of units renting for 30% of the median income in the area. Locally that’s about $112,000, so a unit renting for $34,000 a year ($2,800 a month) is considered ‘affordable’ even if its weensy. And in Victoria.

“How lucky you are to live in this amazing city — wow,” Chrystia gushed to reporters covering her visit.

And down goes another hundred million. So two hundred upper-income young professionals can live swanky on Blanshard Street, tucked safely into their murphy beds.

About the picture:  “This shot was recently taken os an ’empty’ Toronto home,” writes Leslie. “Do you think the neighbours finally reported it? That would explain the ‘vacant home tax’ notice just received. Trouble is, it’s not so vacant, is it? Who’s looking out for the little guys, right? From a long-time reader and sometimes provider of critter photos.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.