February 9, 2021
Affordable Homeownership as a Means of Breaking Out of the Poverty Cycle
According to the District of Muskoka, a home priced at less than $335,000 is deemed affordable. In the District there are currently fewer than 20 homes listed as actively for sale, none for less than $400,000. Local people and those who live here year-round are being priced out of the Muskoka housing market by people moving in from the GTA or by those purchasing older homes and renovating them as rentals for short-term stays.
Rentals are equally challenging – there are currently more online ads searching for a home or apartment to rent than there are listings. Any units that are available, even a one-bedroom, are at least $1,200 per month, not including utilities. That is 44% of gross monthly income for someone making $26,918 per year, the median employment income in Muskoka.
The Canada Mortgage and Housing Corporation (CMHC) definition of “affordable housing” is based on costs less than 30% of a household’s before-tax income. In Muskoka, over half of tenant households are forced to spend more than 30% of their household income on housing. For many households, it exceeds 50%.
The shortage of affordable rental units and affordable homes for purchase is a critical issue for those who have lived in the Muskoka region for years and for those who hold the majority of service jobs we all rely on.
The Habitat for Humanity vision is a world where everyone has a safe, decent, and affordable place to live. Today, more than ever, the residents of Muskoka need a suitable place to shelter, live and work. COVID-19 has created many new challenges for local communities, while exacerbating issues that existed prior to the pandemic, including access to affordable housing for Muskoka families.
While Habitat has expanded its service model to include desperately needed affordable rental units in Muskoka, the organization’s mission is centered on the creation of affordable homeownership opportunities. In Canada, homeownership is the single greatest means of enabling people to build a brighter future for themselves and their families. Homeownership provides people with stability, safety and a pathway to improved financial status. People can use home equity to start a business, finance their children’s education, plan for a secure retirement, and pass on financial security to the next generation. Affordable homeownership is a tool people can use to break out of the cycle of poverty.
Homeownership and equity-based housing models also help municipalities manage their limited resources, relieving pressure on social and emergency housing. Municipal, provincial and federal governments are now focused on the housing crisis. New investments in rental housing will shelter more people but will do nothing to provide people with an opportunity for multi-generational financial advancement. In order to break the cycle of poverty, investment needs to be made in the full housing continuum, including affordable homeownership.
Habitat for Humanity delivers on all aspects of affordable housing, from developing and building to renting or selling and finally to providing mortgages and support. According to a recent Boston Consulting Group study, for every dollar received by Habitat for Humanity, $4 in social benefits are returned to the communities served by the organization. For every Habitat home constructed, $175,000 in social return on investment is generated.
Kimberley Woodcock
Chief Executive Officer
Habitat for Humanity Ontario Gateway North
