Rental crisis fund hits $43.5M
Province pays 10,000 claims a month
Kelly Cryderman, Calgary Herald
Published: Tuesday, July 01, 2008
A provincial emergency fund designed to help renters in dire straits has ballooned to more than six times its original size -- going to $43.5 million from the $7 million announced by the Stelmach government.
More than 62,000 requests for emergency cash were granted in less than a year following the spring 2007 unveiling of the Homeless and Eviction Prevention Fund.
The fund, which is now paying out about 10,000 claims a month provincewide, allows people to quickly obtain a cheque to cover rent shortfalls, saves renters from eviction or provides a damage deposit to newcomers.
Due to demand, the government had to top up the fund throughout the 2007-08 fiscal year.
Along the way, rents increased and then plateaued, and the Alberta government filed at least 30 fraud charges against people who are accused of making false claims to obtain money from the fund.
Critics say there is a place for such an emergency fund, but the money is being blown through quickly because there haven't been other restraints placed on the market, such as temporary rent caps or moratoriums on condominium conversions.
"That's ad hoc planning and it results in runaway spending," Liberal housing critic Dave Taylor said.
"You haven't addressed the problem, you're still trying to manage the crisis," said the Calgary-Currie MLA. "We have created almost a kind of welfare where we didn't need to."
However, Housing and Urban Affairs Minister Yvonne Fritz noted the catalyst for the fund was an affordable housing task force report which recommended $7 million as a starting point.
Still, she suggested her oil-and-gas- rich government is taking note of the rapid use of public money.
"We know there's tremendous uptake of the fund and the importance that it's having out in the community," Fritz said last week.
Last August, Iris Evans, then minister of employment, immigration and industry, said her government wasn't "necessarily prepared for the magnitude of the homelessness issue" and predicted the fund would eat up $21 million by years end.
Across the province, buying a home remains out of reach for many low and middle incomes earners, and Calgary still has the highest average rent for a two-bedroom apartment among the country's major cities. In 2007, average rents soared about 17 per cent.
However, housing prices in Alberta have seen some small decreases in the last few months, the city's vacancy rate has risen from last year's record low of 0.5 per cent, and there is now a greater variety of housing options to chose from.
"This is the fruit of the free market," said Sam Kolias, chairman and CEO of Boardwalk Rental Communities, a company that describes itself as Canada's largest apartment landlord.
Kolias said the government's decision to set up the fund was "a most wise investment" as it helped ease a serious housing crunch last year without interfering with the market with measures such as rent caps. He believes this year housing will be much less of an issue.
"There's a lot less people moving to the city," Kolias said, noting a small number of Boardwalk units have seen rent decreases.
But in the last few months, use of the Homeless and Eviction Prevention Fund has continued unabated.
In the new 2008-2009 budget, the provincial government set aside $44 million for the fund. Employment and immigration spokeswoman Dorothy Schreiber said in April, May and up until June 15, the fund has paid out $15.5 million in almost 25,000 claims.
And Schreiber said as of March 31 this year, there had been 30 fraud charges associated with the fund, and three convictions.
Hazel Orpen, Calgary manager for community housing support program at the Canadian Red Cross, said rapid use of the fund "really speaks to how vast the problem is, not only in Calgary but across the province."
Orpen said even though the city's vacancy rate is up, utility costs are also going up and "we're not seeing a decrease in the amount of rents."
Taylor acknowledges the Stelmach government is making good progress on creating 11,000 affordable housing units in five years, however "in the interim, how much more is it costing the taxpayers?"
© The Calgary Herald 2008