On-reserve housing is among the worst in Canada. In some First Nations communities, poor housing conditions threaten the health and safety of residents. The lack of adequate, affordable housing contributes to health and social problems. The need to deal with the problems of on-reserve housing has been well documented; First Nations leaders have said adequate, safe housing is a top priority. Of the approximately 76,000 houses on reserve, more than half are considered to be substandard due to structural, plumbing, heating or electrical deficiencies. It is estimated that more than 36,300 existing houses need to be rehabilitated and another 5,275 replaced.
There is also a critical need for more housing due to an increasing young population who will be starting families of their own, and the desire of many First Nations people who had left the reserve, to return to their communities. Approximately 8,000 households on reserve live in overcrowded or multiple family situations. Many First Nations have long waiting lists of members who would like to return to make a contribution to their communities, but there is no housing available. The pressure to make more housing available will grow as the on-reserve birth rate is twice the Canadian average.
The current DIAND housing program was developed as a construction and major renovation subsidy program. The purpose of the capital subsidies was to provide supplementary assistance to construction, but the prevailing legal and social limitations have meant what was supposed to be only a subsidy has become the principal source of construction funding. The subsidies were never intended to cover the full cost of construction and have been frozen for more than twelve years.
CMHC's current Non-Profit Housing Program provides ongoing subsidies to reduce debt financing costs to a 2% interest rate. While this approach has provided quality housing projects, accounting for almost 20% of all on-reserve housing, First Nations have encountered problems with the subsidies being tied to fluctuating interest rates.
The Crown ownership of reserve lands has restricted private capital investment as well as the number of privately owned and financed housing. Reliance on federal subsidies as the primary source of construction capital and the lack of private financing ha ve meant construction of smaller houses. Often these houses were built to minimal standards and not able to withstand severe weather conditions, and proved to be inadequate for the number of people living in them. The situation will only worsen unless t he problem is addressed.
The lack of community-wide rental regimes on most reserves means that there are few, if any resources with which to carry out essential maintenance and repairs. In combination with the often modest initial construction the result is a housing stock that has deteriorated rapidly. The need for premature replacement and renovation has severely limited progress in improving and expanding the housing stock.
There are also legal barriers. Both the Indian Act and Crown ownership of reserves impede direct home ownership and capital investment, as well as limiting the powers of First Nations' governments. The collective nature of First Nations' land ownership means that many First Nations view individual land possession as a foreign concept. This has restricted investment and the development of market type housing.
The cost of on-reserve housing is also affected by practical and geographical considerations (such as costs involved in getting building materials on site, and the winter freeze which impedes water transportation). Seventy percent of reserve communities are in rural or remote areas. As well, many communities have little employment and approximately 46% of reserve households depend on social assistance. Household incomes from all sources on reserve are about half what they are off reserve. Lower household income contributes to a greater dependency on social housing.
The federal government's new approach to providing housing assistance to First Nations on-reserve incorporates the best of the fundamental concepts used in the changes to the existing system. It is based on the basic principle of working in partnership with First Nations, supporting their efforts to take the lead in developing specific housing policies and programs that address specific situations. By incorporating some fundamental changes to the existing housing policy, a solid framework can be established which will enable First Nations to achieve immediate and sustainable improvements to on-reserve housing conditions. The goals of the new approach are:
This new approach is based on the First Nations Innovative Housing Demonstration Initiative launched in l995. The initiative was based on the principles of local involvement, innovation, cost effectiveness and linkages to economic development and employment. First Nations may want to look at the use of Social Assistance transfers or Work Opportunities Programs as a method of providing job training opportunities with the potential for full or part time employment as well as a method of reducing the cost of housing.
The policy will be implemented on a voluntary basis. First Nations who choose not to opt into the new policy will continue to operate under the existing DIAND on-reserve housing program.
However, effective in 1997, CMHC's Non-Profit Housing Program will be modified to provide full subsidies to cover the difference between project costs and project revenues. CMHC will also support the further development of First Nations' expertise in housing delivery and administration.
The new approach is founded on four key elements:
1) First Nations Control: Community Based Housing
Participating First Nations would acquire more flexibility under the new policy. They will develop community based housing policies, programs and a comprehensive, multi-year housing plan tailored to meet the needs of their communities. These policies and programs will help strengthen accountability and provide for redress mechanisms. The transition from annual subsidy allotments to multi-year planning will give First Nations an opportunity to assess their long-term housing needs and plan better to meet them. This will also allow them to link training programs and social assistance programs to their housing plan.
By combining several programs, First Nations can provide employment and opportunities for members to gain and upgrade skills. By including renovation and repair programs within the multi-year plan, First Nations can establish and maintain the inventory of quality housing. In developing their plans, First Nations will need to consider how they are going to finance the various housing activities they anticipate for each year. First Nations will also be encouraged to establish housing authorities which will be responsible for implementing the local housing plan.
2) First Nations Expertise: Capacity Development
In developing and managing their community based programs and multi-year housing plans First Nations will expand and enhance their program and management capacity. DIAND and CMHC will offer training and skills development support to assist First Nations in developing their housing expertise.
3) Shared Responsibility: Shelter Charges and ownership
First Nations may institute community-wide shelter charge regimes to help finance their housing plans and promote individual involvement and responsibility. Where community-wide shelter charge regimes are established, shelter allowance payments will be allowed for eligible social assistance households to be funded by First Nations out of their housing funds.
4) Better Access to Private Capital: Debt Financing
Where First Nations choose, a portion of their new construction and renovation requirement will be financed through long-term loan financing. First Nations will continue to have access to Ministerial housing loan guarantees. In addition, along with First Nations and the financial industry, the government will continue to explore new ways to access and secure private capital.
The local housing policies will enhance community accountability and feedback. They may include the type of housing assistance available, how individuals can apply, how decisions are made and resources allocated, how programs are managed and the roles and responsibilities of various participants, from Chief and Council to the housing authority to the individual household.
The new approach has been developed within the tight fiscal constraints of the federal government. The goal of the new approach is to get more housing per dollar spent than was possible under the previous approach. This comprehensive policy will make it easier for First Nations to maintain their existing housing stock, and because they will control the pace and direction of development, they can target resources to meet immediate needs and priorities.