Calgary Herald
December 7, 2008

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Millions of more dollars are being poured into a provincial fund to help Albertans make rent, swelling this year's tab for the program to nearly $80 million--bringing the two-year total to $121 million.

The growing cost of the home-less and eviction prevention fund, created in April 2007 amid a stretch of exorbitant rent hikes and near-zero vacancy rates, is raising some eyebrows and igniting a debate about whether it should be kept intact, downsized or scrapped altogether.

The emergency rent aid program began as a $7-million initiative, but within a year, ballooned to $43.5 million.

Another $44 million was set aside in the spring budget, but the province has burned through that cash. A $33.5-million infusion was passed in a provincial bill just days ago.

At this price, NDP Leader Brian Mason contends temporary rent controls would have saved the province millions and would have helped more people in cities such as Calgary, Edmonton and Fort McMurray, where affordable housing is scarce.

"Instead of putting taxpayers on the hook and essentially subsidizing higher rents, a more appropriate response would be to deal with the real issue, which is gouging of tenants because of a shortage of housing in the market,"Mason said.

But Housing Minister Yvonne Fritz considers the issue of rent controls over and done. The Alberta government last year rejected this measure, which was recommended by a government-appointed committee.

While acknowledging the homeless and eviction prevention fund has increased substantially, Fritz said tenants' need for financial assistance has driven its growth. The program offers short-term aid to people with limited incomes who face the prospect of being evicted or who can't cover damage deposits or first month's rent.

The province granted 62,000 requests from roughly 27,000 households last year. This year, 92,000 claims have already been approved.

"I would challenge people to show me one individual that will come to me and say I didn't need that fund, what I needed instead was a rent control." Fritz said.

"I know for a fact that fund has kept people in their homes."

The fund is under review, though, like many other government programs in the wake of shrinking revenues and tanking crude oil prices.

Fritz said she and Employment and Immigration Minister Hector Goudreau, whose department administers the fund, are looking at all government programs that help low-income renters, evaluating what works best.
She's also considering the Edmonton Social Planning Council's recommendation to downsize the homeless and eviction and prevention fund and instead pour extra dollars into enhancing the existing rent supplement program.

The social policy think-tank argues financing of the "Band-Aid" emergency fund has reached excessive levels and should return to its $7-million-a-year starting point. It believes the rest of the millions would be better spent on expanding the number of low-income earners who receive ongoing rent supplements and offering them more options as to where they can live.

"Once you get to spending more money on a short-term type fund, then you have to ask the question are there other better solutions?" suggested John Kolkman, research and policy analysis co-ordinator for the ESPC.

Although the availability of rentals has increased since 2007, average rents in Calgary have not budged downward.

A Canada Mortgage and Housing Corp. rental market report showed the city's vacancy rate was two per cent earlier this year, but the average cost of renting a two-bedroom apartment was $1,096 per month, making Calgary the most expensive major city in the country.

Gerry Baxter, executive director of the Calgary Apartment Association, expects emergency rent aid may become more necessary as the economy slumps and job losses mount.

"That particular program, I think, is something most of us suggest should remain as long as it has good, tight policies and controls," he said.

But Scott Hennig of the Canadian Taxpayers Federation suggests the fund might be dissuading landlords from drop-ping their rents, even though the vacancy rate has improved and the economy is worsening.
The Alberta Liberal party's housing critic, Calgary MLA Kent Hehr, believes rent aid has ballooned to $121 million in two years for one reason: the province rejected temporary rent controls.

"They chose to do this approach to line the pockets of landlords and realy, I think it's done very little to keep people in their homes long-term,"Hehr charged.

While Mason argues temporary rent controls should still be brought in, Hehr said the time may have passed.

Both politicians agree it would be unwise to immediately pull the plug.

"It was the wrong thing to do in the first place,"Mason said, "but right now, just cancelling it all of a sudden wouldn't be the right approach."

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