TORONTO - Many Canadian cities are short of affordable rental housing. Waiting lists for low-income housing are years in length, and new-build construction of rental housing has fallen over the last two decades.

In Building Affordable Rental Housing in Unaffordable Cities: A Canadian Low-Income Housing Tax Credit, C.D. Howe Institute authors Marion Steele and François Des Rosiers propose a better way to build more low-income housing in expensive Canadian cities. A made-in-Canada Low-Income Housing Tax Credit (LIHTC) could leverage private sector expertise in site location, building, and management to build more and better low-income rental housing.

The LIHTC would provide a federal tax credit that provincial housing authorities would disburse to housing developers based on local needs. The tax credit could work with existing provincial and local housing policies, such as Rent Supplements and housing allowances, to make all of these programs more effective.

The LIHTC could provide a better way for Canada Mortgage and Housing Corporation (CMHC) to disburse funding among provinces to build social housing. The concept stands out as a means of leveraging the recent $2 billion short-term stimulus funding for social housing into a long-term investment.

For the study click here. http://www.cdhowe.org/pdf/commentary_289.pdf