Housing driving a wedge between rich and poor

By Judith Maxwell

Rising home prices are often treated as a sign of prosperity, but they also drive a wedge between the rich and the poor.

In its Vital Signs 2010 report, Community Foundations of Canada has asked the question: “How much ‘house’ can Canadians afford?” Well, it all depends on your income, your down payment and mortgage interest rates, as well as the cost of the house.

And today, the average price for a house is 4.1 times the annual median family income, up from 3.1 times in 1995.

Broad averages like these hide many diverse stories. Some people can afford to spend $1 million on a house, others can’t make next month’s rent.

Benjamin Tal of CIBC Economics^[i] says that the most vulnerable groups are those who live on less than $50,000 a year. If they own a house, and not many of them do, he estimates that they are paying 51% of their gross income on mortgage payments plus hydro and property taxes. In contrast, people with incomes over $50,000 pay an average of 24% of gross income.

The Community Foundation of Ottawa has demonstrated the wedge between rich and poor in its Vital Signs 2010^[ii] report. Ottawa, like many other cities large and small, has a serious shortage of affordable housing, specifically apartments with rent geared to income.

For a family of four on social assistance (Ontario Works), for example, monthly assistance amounts to $1,844. This is not enough to cover the average monthly rent for a 3 bedroom apartment ($1,257) plus a nutritious food basket ($735). The family therefore has to choose between lower quality housing and being able to cover costs of food, transit and other necessities.

A lot of working Canadians face the same dilemma. Almost half of the people on low income in Ottawa do not receive Ontario Works benefits – they are the working poor. Their wages, even when they work 49 weeks a year, don’t cover basic shelter, food and necessities. Many depend on the food bank to get through the month.

These are untenable choices for families. The underlying problem is that Ottawa has a waiting list of 10,000 families looking for affordable housing but has only built an average of 164 new units per year over the past decade.

Real estate developers don’t build affordable housing because it is not a profitable business. Governments have reduced their contributions to this kind of housing, and not-for-profits, which are ready and able to build, don’t have access to capital.

This puts Canadians to a test. Do we let this gap between rich and poor continue to grow? Or can we get creative? Surely financial innovation plus a social conscience can free up resources to build more stable, decent and affordable housing.

Tom Carter^[iii] Canada Research Chair at the University of Winnipeg, says that good housing plays a stabilizing and facilitating role in the community. It improves:

• Physical and mental health
• Educational attainment
• Family life and social interaction
• Income security
• Labour force attachment
• Integration of immigrants, and
• Community development

Sounds like a good investment to me.

Judith Maxwell is the former Chair of the Economic Council of Canada, and Founding President of Canadian Policy Research Networks.

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^[i] Benjamin Tal, Consumer Watch Canada, “Assessing Vulnerabilities in the Canadian Housing Market,” CIBC Economics, May 25, 2010.
^[ii] Community Foundation of Ottawa, Ottawa’s Vital Signs, 2010.
^[iii] Tom Carter and Chesya Polevychok, Housing is Good Social Policy, Canadian Policy Research Networks, 2004.

How is the Community Foundation of Ottawa engaging citizens on the issues raised in Vital Signs?

On Tuesday, October 20, the Community Foundation of Ottawa held Checkup 2009, a public event open to anyone wanting to participate in a community conversation based on the 2009 Ottawa’s Vital Signs report. Taking place in the auditorium of the Ottawa Public Library’s main branch, the two-hour event was moderated by Kathleen Petty (host of CBC Radio’s Ottawa Morning), and led by a panel that consisted of Caroline Andrew (University of Ottawa professor and Director of the Centre on Governance), Ken Gray (Ottawa Citizen columnist and Editorial Board member), and Carl Nicholson (Executive Director of the Catholic Immigration Centre of Ottawa).

Attracting a capacity audience of close to 200 people, Checkup 2009 was indeed a lively discussion of Ottawa’s hot topics, as well as a number of issues that were true eye-openers for many people in the room, including the panelists and moderator. In one instance, a woman whose son was incarcerated for a year in the Ottawa-Carleton Detention Centre awaiting trial tearfully described her own treatment as a visitor to the facility and her struggles to help her mentally ill son receive the medical attention he needed. Other passionately-articulated stories included those describing the ongoing difficulties faced by Ottawa’s physically disabled citizens in accessing public buildings, as well as those grappling with a lack of affordable housing and the growing gap between rich and poor in the city.

“This is what the Ottawa’s Vital Signs program is really all about,” says Barbara McInnes, President & CEO of the Community Foundation of Ottawa. “While the report is full of fascinating stats and data on everything from health and wellness to how people make their way around the city each day, it’s really only the beginning of an important discussion that needs to take place amongst the citizens of Ottawa. Checkup 2009 was a great opening to that conversation – the one about what kind of city we want to live in and how we’re going to make that vision a reality.”

Ken Gray – a highly knowledgeable and prolific writer on municipal affairs – was particularly taken with his experience as a Checkup panelist, later writing in his Ottawa Citizen blog: “Because journalists are, of necessity, a mile wide and an inch deep, I felt rather like a tricycle between two Ferraris trying to keep up with the two other panelists who actually know of what they speak. Nicholson discussed Ottawa sleeping through a revolution what with 22 per cent of the population in the city born in other lands. With the best voice since James Earl Jones and quoting Martin Luther King, Nicholson is very learned and impressive. Andrew has a depth of knowledge of political affairs that a city hall plodder like myself can only envy. She is so nice she can say you are full of beans and you thank her for it.” 

“Kathleen and all three panelists deserve a world of thanks for their contributions to this event,” responded Barbara, “and we think Ken’s pretty impressive, himself!”

Checkup 2009 was the first in a series of community conversations planned as part of the Ottawa’s Vital Signs program. Planning for the 2010 report will revolve significantly around ideas and feedback received at Checkup events in the early part of the year, to be followed by a similar reflection on the findings in the resulting report.

“From the beginning, Ottawa’s Vital Signs was designed as a vehicle to engage the entire community on issues of importance, and to stimulate public dialogue on how we can work together to improve the quality of life in our city,” says Barbara. “We expect the Checkup series to bring us even further along the way towards realizing that goal.” 

Ken Gray’s Checkup speech was published as his column the day after the event, and can be read here 

Read Ken’s blog about his experience as a panelist

Taking our communities’ Vital Signs

With just one week to go until the launch of Vital Signs 2009, community foundations across Canada are getting ready to present research findings to their communities.

The launch of 16 local reports and our national Canada’s Vital Signs report on October 6 marks the fourth year of the national Vital Signs program. And although every community puts a lot of effort into their reports, I think some of the most significant contributions that Vital Signs makes to its communities takes place long before and long after, the reports are released.

Months in advance of gathering statistical data for their reports, community foundations meet with a wide range of organizations, often bringing them together to ask ‘What does our community want and/or need to measure?’ In some cases, they discover gaps in research or realize they can pool resources to learn more. These meetings are not the stuff of front-page news, but do they lead to change? You bet.

During community consultations last year, the Community Foundation of Ottawa made an alarming discovery. Although 1,000 women were using shelters to flee domestic abuse, no one knew how many were being turned away because the shelters were full. The research that followed found more than 5,000 women were being turned away, galvanizing the media and the community.

The community is also engaged after the research phase, when citizens are invited to rate their community’s progress. Online surveys take place months before reports are issued. Some community foundations hand out postcards at events to encourage participation; others are using Twitter and Facebook to access growing social networks. In Vancouver youth used text messaging to rate their perception of the community. The goal? Reach as many citizens as possible to build understanding of local issues and offer a concrete way to share their own views.

Launch day brings lots of local and national media attention, but Vital Signs doesn’t end after the 11 o’clock news. Rather, October 6th is meant to act as a springboard to attract Canadians’ attention and engage them in an ongoing discussion.

In the city where Vital Signs was born, the discussion has already spanned a decade – transforming the way the Toronto Community Foundation defines and responds to the strengths and challenges of Canada’s largest city. That’s because the information gathered throughout the Vital Signs process is a goldmine of community insight and understanding. It helps all the participating community foundations set granting priorities, work more effectively with donors, and act as a catalyst within their own community.

For instance, Toronto’s Vital Signs has led to the creation of Vital People, a granting program that supports valued leaders in the non-profit sector. Then there’s Vital Ideas, connecting donors to high-impact community initiatives and providing grants to community groups so they can multiply the impact of their work by sharing their learning with others. The impact stories can be found in every community across the country.

Vital Signs is only one of many important indicator initiatives in Canada, but it’s a powerful formula for building community vitality: engage the community in the gathering and disseminating of local knowledge and then put that knowledge to work via community philanthropy.

Stay tuned, we’ll have much more to share with you in the months and years ahead.We will update this blog regularly, so visit often or subscribe to our RSS feed.

(Monica Patten is the President and CEO of Community Foundations of Canada)