Defining “Affordable Housing”

The mixed-income housing development proposed for the former Tartan Downs racetrack in Sydney will contain 55% “affordable housing” units — meaning 240 of the 430 units will be rented at 80% of market rent.

Kent MacIntyre of the Urban Neighborhood Development Association (UNDA), the organization overseeing the project, is using the Canada Mortgage and Housing Corporation (CMHC) definition of “affordable,” which is also the definition used by Housing Nova Scotia, the two entities to which they will be applying for funding.

But as I pointed out after a special CBRM council session devoted to the issue of affordable housing last November, this isn’t the only definition of “affordable” used by these outfits.

Paul LaFleche, deputy minister of Municipal Affairs and Housing, gave a presentation during that council meeting in which he defined “affordable housing” as housing that is adequate and suitable and “costs less than 30% of the household’s pre-tax income.” This same definition can be found on the CMHC’s website. (With the added explanation that the term applies to “all forms of housing tenure: rental, ownership and co-operative ownership, as well as temporary and permanent housing.”)

LaFleche even provided a handy slide to show what would be considered affordable housing at various income levels:

NS Gov't Affordable Housing Presentation (Slide)



National Housing Strategy

I wondered why both Housing Nova Scotia and CMHC pay lip service to one definition of “affordable” while employing a different one when evaluating funding applications, so I reached out to Dr. Catherine Leviten-Reid, the CBU prof who has spearheaded much of the affordable housing research in the CBRM. She agreed it is “absolutely a contradiction” to define affordable as no-more than 30% of a household’s pre-tax income and then approve projects in which units rent at 80% of market value — or, even more problematically, at less than 30% of median family income (as determined for each city) — but she could offer no explanation for it.

She pointed me to this critique of the federal government’s National Housing Strategy (NHS) — which will be the source of federal funding for the Tartan Downs project — by Marc Lee, a senior economist with the Canadian Centre for Policy Alternatives’ BC Office.

Lee quotes the Parliamentary Budget Office (PBO) — which reviewed the strategy in 2021 — on the subject of two funding streams, the National Housing Co-Investment Fund (NHCF) and the Rental Construction Financing Initiative (RCFI), each of which has its own definition of affordable:

The PBO notes that “The National Housing Co-Investment Fund only requires that 30% of units be offered at 80% of median market rent. And, its prioritization and incentivization scoring provides no reward for offering more than 51% of units at 80% of median market rent.”

The RCFI has different affordability criteria, requiring that 20% of units meet a benchmark of rent at less than 30% of median family income (as determined for each city), as opposed to median market rent. The PBO states “30% of median total income for all families in the area is generally higher than the rent for new private market rental developments.” In Vancouver, this calculation would mean that 20% of the units would be available at $2,063 per month, while the remaining units would rent for more.

Stephen Pomeroy, a senior research fellow with the Centre for Urban Research and Education (CURE) at Carleton University, dissected the RCFI in this January 2021 analysis, finding that it has become the “centrepiece” of the NHS, “massively enhanced (from original $2.5 billion to $25.75 billion)” since 2017, despite being out of alignment with the stated goals of the strategy.


Deeply affordable

At this point, it’s probably worth remembering the stated goals of the National Housing Strategy, as blared from its home page:

Canada's NHS


(Pomeroy’s analysis notes that the government’s Fall 2020 statement “implied that this homeless goal has now been elevated to reducing chronic homelessness by 100%.”)

But meeting these goals — particularly reducing homelessness — requires not just affordable but what Leviten-Reid terms “deeply affordable” housing, and 80% of market value doesn’t produce a “deeply affordable” rent. (Especially since there can be a time limit on the “affordability” — as in, the developer agrees to keep a certain number of units “affordable” for a given period of time, after which they are free to raise the rents.)

Leviten-Reid referenced CMHC’s recently released rental market survey data for 2021. While CMHC doesn’t calculate median market rents, it does give average market rents and the average rent for a one-bedroom apartment in CBRM is $721 (in Sydney it’s $749). Said Leviten-Reid:

So 80% of that is like, $577…[F]or a low-income individual then, that is not 30% of [their] income on rent.

According to the NS Community Services website, Nova Scotians who require help with their “basic needs” can receive a monthly allowance called a “Standard Household Rate,” and currently, a single person with no dependents who owns or rents their home is entitled to $686 per month, which is expected to cover “food, clothing, shelter, fuel, utilities and personal items.” If this were your only income, you’d have to dedicate 84% of it to rent to live in that “affordable” $577 one-bedroom apartment.

But even someone with another source of income would struggle. Consider the example from the government website of a person who works, as well as being on Income assistance:

If “Maggie” rents that one-bedroom apartment at $577 per month, she’s spending 48% – almost half — her monthly income on rent.

CMHC rental market stats for NS, 2021



There is a small bright spot in this story, which is the success of the Rapid Housing Initiative (RHI). As Marc Lee explained, as of end-September 2021, only $363 million of NHS spending represented “new federal investments (grants and contributions) in the construction of new dedicated affordable housing” and “39% of this is the Rapid Housing Initiative” which was “only announced in Fall 2020 and was not part of the original NHS.”

As Leviten-Reid told me:

Really, it’s the housing being developed under the Rapid Housing Initiative that is responding to the needs of those who need deeply affordable housing, given how it defines affordability.

I wrote earlier about one such RHI project so I’m just going to quote myself:

Take the case of Adsum Women and Children. The non-profit secured $4 million in funding from the RHI to build “Sunflower Court,” a 25-unit affordable housing development in Lakeside. As Adsum explains on its website, it has assembled:

“…a team of local architects, designers, contractors and construction professionals including Passive Design Solutions, Cobequid Consulting and DORA Construction to bring its vision to life.”

But the key is this: the private companies will not end up with an ownership stake in this development, they will not milk it for profit over the coming years. As Adsum’s Sheri Lecker told me:

“The contractors mentioned, and others, are providing services and construction, they are not investors in the project.

“Adsum for Women & Children is the owner.  Rents will be used to maintain the housing which will be truly affordable, as in rents geared to income (30% of household income).  Rent for a 3 bedroom, therefore, may be as low as $357/mo (30% of the standard household rate for a family of 3+ on income assistance).”

So what’s my point? I think my point is that the Tartan Downs project, as exciting as it undoubtedly is, does not seem to be targeting those most in need of housing in our community.

And I think we need to be very clear about what we mean when we use the term “affordable.”


Featured image: Houses by Juniper Littlefield via the Affordable Housing Association of Nova Scotia