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March 21, 1997
(Municipal and Provincial Affairs)

The following is being distributed at the request of Newfoundland and Labrador Housing Corporation:

Budget results in changes at Newfoundland and Labrador Housing Corporation

Yesterday's budget signalled several changes at Newfoundland and Labrador Housing Corporation (NLHC). The details of the budget decisions affecting the corporation were announced by Art Reid, minister responsible for housing.

SOCIAL HOUSING

Newfoundland and Labrador Housing Corporation will continue its very significant role in the provision of social housing province wide, Mr. Reid said, and this role will likely expand as negotiations are under way with Canada Mortgage and Housing Corporation (CMHC) to take administrative responsibility for its housing in the province. This would increase to more than 30,000 the number of individuals served under NLHC accommodation programs.

"Government sees an ongoing role in subsidized housing because this is an area where we can make a real difference to the fabric of our society," the minister said. "Decent, affordable housing is key to the overall health and stability of the family and to the development and educational attainment of young people," the minister said.

MAINTENANCE EFFICIENCIES

Mr. Reid announced that the corporation will be seeking greater efficiencies in the maintenance and operation of its social housing in order to meet budget targets. Improved maintenance systems will be a big focus for the corporation over the next year, he said.

RENTAL RATE STRUCTURE

The corporation will also make changes to its rental rate structure for social housing tenants in order to achieve cost savings required by government.

Currently, all tenants in non-profit housing pay rent based on 25 per cent of their income. NLHC has re-designed its rental structure so that a sliding scale of rental rates will be applied depending on family size and household income. That scale will range from 25 to 30 per cent of income.

"This change in rental rates for social housing tenants will be sensitive to the needs of the corporation's lowest income tenants, particularly those with a number of children," the minister said. "This is in keeping with government's focus on assisting those most in need, particularly children and young people."

Tenants with higher incomes and fewer or no children will see an increase in their rents, the minister said. Increases will be implemented as leases expire starting in July.

Mr. Reid noted that NLHC's move is in keeping with social housing agencies in most other jurisdictions across the country which have, over the last few years, raised rents to assist in maintaining social housing.

HOUSING REPAIR/ASSISTANCE PROGRAMS

The minister announced that NLHC will once again deliver housing repair and assistance programs known as the Residential Rehabilitation Assistance Program (RRAP), Emergency Repair Program (ERP) and Housing Adaptations for Seniors' Independence (HASI). These programs are cost- shared with the federal government.

"The continuation of these housing repair and assistance programs is good news for families and seniors across the province," Mr. Reid said. "It will also provide much-needed employment in the home building industry in all parts of Newfoundland and Labrador, creating or maintaining about 175 jobs. The total value of the programs will be approximately $3 million with assistance being provided to about 400 households."

LAND DEVELOPMENT

The housing corporation's role in land development will be changing, the minister said, but the exact nature of these changes has yet to be defined and approved by government.

"The vision for land development involves a move away from the traditional role to one involving greater partnering with the private sector," Mr. Reid said. "Because of the number of stakeholders involved and the complexity of the environment, any changes in the corporation's land development operations will be made gradually."

DIVESTITURE OF ASSETS

Newfoundland and Labrador Housing Corporation will continue to divest of its market rental housing þ apartments and houses rented at rates similar to housing owned by private landlords.

"Government feels there is no role for the housing corporation in this area," the minister said, "and divestiture of these assets provides opportunities for private sector involvement."

Mr. Reid noted that NLHC has now sold 80 per cent of its original market rental portfolio. The sale of these assets will continue to be handled in such a way as to avoid disruption of the real estate market and to obtain a good return for government on this public investment, he said.

Contact: Karen Humphreys Blake, NLHC, (709) 724-3054.