Exploring Rent Geared to Income (RGI) vs. Rent Geared Funding (RGF)

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The comparison between Rent Geared to Income (RGI) and Rent Geared Funding (RGF) policies in subsidized housing for social assistance recipients is elaborated. RGI serves as a rental policy fulcrum, while RGF discusses the challenges of low rent scales causing issues over decades. The analysis delves into the discrepancies in rent scales for different benefit unit sizes under RGI and the impact on social assistance recipients.

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RGI or RGF? (Rent geared to funding) Still crazy after all these years Adapted from a 2013 ONPHA Presentations of Michael Oliphant, Joy Connelly John Stapleton Open Policy Housing Lab: July 20, 2015

RGF or RGI? 60,000 social assistance recipients (40,000 ODSP 20,000 OW) live in RGI housing but a very small number pay RGI scale rents RGI is a rental policy fulcrum that has been in place for decades as the social policy underlying affordable public housing For social assistance, RGI is the tiny exception while the rule is artificially low non-RGI rent scales. still crazy.... 2

But I would not be convicted By a jury of my peers Still crazy after all these years Oh, still crazy Still crazy Still crazy after all these years http://youtu.be/Ksa4VjKE3RY?t=2m42s Paul Simon 1975 still crazy.... 3

Rent Geared to Income Social Assistance Recipients Social assistance rents in subsidized housing have remained near the same low levels for decades they are NOT Rent Geared to Income (RGI) These rents almost made sense in the late 1970 s. They make no sense now They are too low and cause other things to go awry They are : still crazy after all these years still crazy.... 4

Rent Geared to Income and Social Assistance Recipients the rent scales - OW Column 1 Column 2 Column 3 Benefit unit size (number of individuals) Rent attributable to benefit unit (monthly) Non-benefit income limit (monthly) $85 1 $360 2 175 737 3 212 861 4 254 1,001 5 296 1,141 6 339 1,284 7 381 1,424 8 423 1,564 9 466 1,707 10 508 1,847 11 550 1,987 12 or more 593 2,131 still crazy.... 5

Rent Geared to Income and Social Assistance Recipients The rent scales: ODSP Column 1 Column 2 Column 3 Benefit unit size (number of individuals) Rent attributable to benefit unit (monthly) Non-benefit income limit (monthly) $109 $440 1 2 199 817 3 236 941 4 278 1,081 5 321 1,224 6 363 1,364 7 405 1,504 8 448 1,647 9 490 1,787 10 532 1,927 11 575 2,071 12 or more 617 2,211 still crazy.... 6

ODSP still crazy.... 7

Ontario Works still crazy.... 8

Rent Geared to Income and Social Assistance Recipients How many social assistance recipients are in subsidized housing in Ontario? OW: 22,380 recipients representing 55,673 people in 2013 going down! ODSP: 39,257 representing 59,141 people in 2013 - going up slightly Total: 61, 637 households; about 115,000 people so it is a lot of people! -2015 guess about same These households represent almost ( 1 in 4) of all subsidized households. As Seniors represent about 1 in 3, SA is more than a third of the non-seniors portfolio still crazy.... 9

Why did social assistance rents not move up? It s all about subsidies and incentives: Originally to maximize federal incentives and some municipal contributions Then kept to avoid a windfall to municipalities Then under Who does what (1990;s) a.k.a. Local Services Realignment, they became part of the devolution deal and now entrenched. still crazy.... 10

So rents are artificially low. Who cares? After all, social assistance recipients get paid up to a shelter maximum and the rents are way below the maximums. If rents go up, they get more money and 100% goes in rent it s a wash. And didn t municipalities give up education funding in a trade to pay for housing and other things? still crazy.... 11

So rents are artificially low. Who cares? Here is who cares! Municipalities who have limited funds to pay for subsidized housing, repairs, add-ons and are starved by artificially low rents in social assistance Priority setters: the more recipients who become tenants, the less money to municipalities- yet recipients are among most vulnerable Policy analysts: artificially low rents create many perverse incentives still crazy.... 12

So rents are artificially low. Who cares? Here is who cares! Social assistance recipients in subsidized housing who watch their rents shoot up (esp. above shelter max) when they earn money and move over to RGI! Last Last thing I remember, I thing I remember, I was Running was Running for the passage passage back to back to the place I was the place I was before. "Relax before. "Relax, " said the night man are programmed to are programmed to receive receive. . You You can check But But you can never leave! you can never leave! The Eagles: Hotel California: 1977 http://youtu.be/mnkJcjBCG88?t=3m50s for the door ; I door ; I had to find the had to find the , " said the night man, " , "We can check- -out any time you out any time you like, We like, still crazy.... 13

ODSP shelter components vs RGI rents and non-benefit thresholds Benefit Unit Size ..Non- benefit thresholds Maximum Monthly Shelter Allowance Family Size Rent scale rents 1 $440 $479 $109 199 236 278 321 363 2 3 4 5 6 817 941 1,081 1,224 1,364 753 816 886 956 990 still crazy.... 14

OW shelter components vs RGI rents and non-benefit thresholds Maximum Monthly Shelter Allowance Amount in dollars Non benefit thresholds Benefit Unit Size Rent scale rents $85 $360 737 861 1,001 1,141 1,284 1 2 3 4 5 6 or more 376 609 662 718 774 801 175 212 254 296 339 still crazy.... 15

So rents are artificially low. Who cares? Here is who cares! Social assistance recipients in subsidized housing who pay utility costs and other costs out of their basic entitlements as opposed to their shelter component; and Who face outside rents and market rents that are extremely high. still crazy.... 16

So rents are artificially low. Who cares? Here is who cares! Social assistance recipients in subsidized housing who have to face the non-benefit thresholds that switch them to RGI after less than 10 hours of work a week! Social Assistance reformers like Sheikh and Lankin (Brighter Prospects) who would like to set one broad overall social assistance rate (collapse basic and shelter) yet the OW and ODSP rent scales are in the way! still crazy.... 17

Social assistance non-benefit thresholds Let s take a look at just one threshold: The $440 monthly threshold in ODSP Meant to honour RGI 30% rule (according to HSC in 2007) Meant to start RGI early so a massive rent increase would not occur when someone left social assistance i.e. smooth out the curve But the threshold are based on artificially low rents still crazy.... 18

Social assistance non-benefit thresholds $440 equals the division of 30% of the single ODSP rent of $109 less a $75 a month earnings exemption (109/.3 +$75 =440) When the rule was first established, minimum wages were $3.00 an hour You could work 146 hours a month before you d go to RGI now: less than 37 hours! A question: Why base incentive structures on 30 year old artificially low rents? still crazy.... 19

Social assistance non-benefit thresholds The shelter component is $479 meaning that you start paying 100% of rent out of your own pocket before you realize full time minimum wage earnings ($479 is 30% of 19,120 but ODSP breakeven is $29,040) This is what happened to Linda Chamberlain she was still on ODSP and paying 30% of her income on rent well over the $479 component Meaning that every time she reduced her work hours until she got back below the shelter maximum, she was better off! (I had to find the passage back to the place I was before) (Hotel California) still crazy.... 20

Brighter Prospects: One Overall Social assistance rate Why bother? Social assistance shelter component in ODSP was exactly 21.6% higher than OW component until this year. ( an irritant) Component draws attention to inadequacy of shelter benefits No one but recipients in subsidized housing (and rare rural and special situations) get anything but the maximum CAP gone in 1996 no reason to have 2 components Modernization calls for less administration, more autonomy etc. still crazy.... 21

Brighter Prospects: One Overall Social assistance rate BP recommends one rate and recommends moving social assistance to RGI @ 30% What s not to like? Everyone goes to RGI: uniformity Recipients have standardized rents & don t lose out You could annul the non benefit thresholds $440 hour rule) Rents are standardized municipalities get more $$$ Province moves to standard rate schedule in OW/ODSP No one loses out except .Ontario coffers still crazy.... 22

Brighter Prospects: One Overall Social assistance rate Big Problems: Moving to RGI is very expensive Violates Local Services realignment and gives municipalities more $$$ through higher rents Province look like a poor negotiator Brighter Prospects can t recommend going to the max of the shelter component .. Why? They are recommending that there would be no shelter component. still crazy.... 23

Other Issues: Who lives in the Household WHY DO WE CARE WHO YOU LIVE WITH IN SUBSIDIZED HOUSING? still crazy.... 24

The (Simplified) Decision Making Tree Live Alone? No Yes Living With Parents? Roommate? Spouse? Financially Independent? Financially Dependent? Living With Parent Does Not Qualify Dependant Adult Co-Res Single Single Couple If financially dependent and your parents are not on SA, you don t qualify If financially dependent and your parents are on SA, you qualify as aDependent Adult still crazy.... 25

So where are we now? We need big brave solutions! Move to yearly income reconciliation Stop dependency rules that disallow transition Get rid of non benefit thresholds or: Cap rental increases at social assistance shelter maximums; or Get rid of the shelter maximums and go to RGI for everyone; or Do something different and get on with it! Don t stop social assistance recipients in subsidized housing from working! still crazy.... 26