Affordability of 1,900 subsidized housing units in jeopardy as funding agreements set to expire

London could start losing ground in its efforts to alleviate the housing crisis unless City Hall intervenes.

Deeply discounted rent-geared-to-income (RGI) housing is partially supported by government funding agreements that are in place for the length of the building’s mortgage — usually 35 years.

Once an agreement expires, the loss of mortgage funding from the municipality can create a financial shortfall for non-profit agencies in possession of aging buildings that require more maintenance.

“It’s hard to help the people that are in the deepest need without getting these subsidies,” explains Greg Playford, a board member of Homes Unlimited.

Across Ontario, 6,500 affordable units have already been lost as agencies are forced to raise rent to cover the lost subsidy.

A new report to city council warns 2,918 affordable units in London will have their funding agreements expire by 2030.

“Without some form of funding, it is not feasible for all projects to continue to provide affordable housing,” reads the report to council’s Community and Protective Services Committee (CAPS).

“It’s a serious problem,” says Playford. “One many of us have seen coming for quite a few years.”

Homes Unlimited has developed a possible solution for four of its Odell-Jalna properties (246 units, 210 RGI) which could become a model for other organizations.

The proposal requires city hall to forgo the savings it would have accrued when the mortgage funding agreements expire — and instead continue directing those dollars to subsidizing the units.

In 2021, city council approved a municipal strategy that aims to create 3,000 new affordable housing units in just five years.“We must not lose sight of maintaining the affordability we have,” warns city staff in their report recommending the Odell-Jalna proposal.

Adding, civic administration at city hall, “views this proposal as an innovative approach and pilot (project) that might provide similar strategies for other housing providers facing similar challenges.”

The CAPS Committee will consider continuing to fund the units after their agreements expire at a meeting on Feb. 1.

Playford believes the proposal could see hundreds of Londoners and their families benefit for decades into the future.

“We’ve been providing affordable housing for 50 years, and want to do it for another 50 years, so we’d like to see the savings reinvested.”