John Barber
The Globe & Mail

A bracing wind of change blew through the East End when a small group of politicians and would-be developers gathered on Kingston Road yesterday morning to announce something Torontonians haven't seen for years: an innovative affordable housing program backed by both the federal and provincial governments.

Although the $2-million they gave away was a pittance compared with the hundreds of millions of dollars the two governments have promised to invest in affordable housing locally, it was enough to demonstrate a new determination to make a difference in Toronto.

So far, Ontario and Toronto have been bystanders to the new national program that is now supplying affordable housing across the country, especially in Quebec and British Columbia.

Held up first by a Tory government that was disinclined to provide matching funds -- and more recently by a Liberal government that felt it could not afford to do so -- the new national program is finally seeping its way into the local political landscape. And the project announced yesterday indicates that the two governments are prepared to be creative in how they make it work.

Rather than concentrating exclusively on affordable rental units, the governments have teamed up with Home Ownership Alternatives, a non-profit trust, to develop 382 affordable condominium apartments in three projects located in Scarborough, Markham and Pickering. Building on a model pioneered by non-profit developer Mike Labbé, the program uses creative financing to help working people with household incomes of no more than $45,000 to own their own homes.

First-time owners carry their new apartments with payments as low as $600 a month in some of Mr. Labbé's previous buildings, which were developed without the help of any government funding. If the model works as well with subsidies as it does without them, it could easily grow into a major new force in the underserved low end of the local housing market.

But even a delighted Mr. Labbé, who has spent years promoting his innovative technique of creating affordable home ownership in various government lobbies, acknowledges that housing policy in Ontario remains strangely undeveloped.

"It's a very odd situation," he says, noting that the flow of federal funds has been "horribly delayed" in Ontario. The previous Tory government's reluctance to get involved is an obvious reason for that. Another is the fact that little remains of the institutional structure that once helped build new, affordable housing in Ontario -- mainly co-ops and other non-profit groups. Although the money is there, the programs need to be rebuilt from scratch.

The federal program assumed that provinces would match Ottawa's $25,000 subsidies for every new unit that could be rented at below-market rents. But currently, the only subsidy available to Ontario developers is a $2,500-a-unit tax break.

Recognizing the enduring logjam in Ontario, federal Housing Minister Joe Fontana recently announced his willingness to bend some rules to get things going.

One option he is considering is for his government to begin disbursing the $350-million earmarked for affordable housing in Ontario without the immediate participation of Queen's Park -- as long as the province agrees to pay back the loan in the future.

Such a gesture would be "magnificent," according to one city official. It would go a long way to ensuring the successful revitalization of Regent Park, which is scheduled to begin soon but is probably not viable without substantial aid from senior governments.

Another option, which makes sense in a city with a rental vacancy rate of about 4 per cent, is for senior governments to offer rent supplements to fill up empty apartments with new tenants who couldn't afford them otherwise.

Both options will be on the table when federal and provincial housing ministers meet at the end of this month. In the meantime, yesterday's announcement on affordable home ownership indicates that Ontario might finally be ready to join the game.

jbarber@globeandmail.ca