Indigenous housing crisis can be solved using market forces

Only the private sector can deliver the high-quality housing that reserves need. Government waiting lists will never catch up

Joseph Quesnel

Adequate housing – especially in remote and northern locations – is an intractable problem facing First Nation communities.

The high cost of housing in these locations and the never-ending cycle of backlogs plague reserve communities across Canada. The federal government must pledge to make housing a commitment on the same level as safe drinking water for reserves or the availability of broadband internet.

The government emphasis on Indigenous housing seems to be on the amount of money pledged and spent, or on the number of housing units built. It’s good the federal government is rolling out specific targets. However, the real focus should be on working with Indigenous communities to deal with the policy and governance problems that prevent access to mass levels of market housing on reserves.

Until the government removes restrictive land ownership policies on reserves, First Nations must find clever ways to roll out market housing. Only the private sector can deliver the high-quality housing that reserves need. Government waiting lists will never catch up to need, especially with burgeoning populations in many communities.

One of the principal difficulties, however, is that the consensus within government circles is on transferring management over housing rather than fixing it. Devolving deeply flawed programs or increasing funding for broken programs will only make the problem worse.

First Nations should lead the needed transformation and challenge the conviction – held by those in government and many First Nation leaders – that the government should provide, fund and manage reserve housing. The absence of viable alternatives doesn’t make it any easier to see beyond this thinking.

There’s nothing wrong with some degree of social housing to ensure affordable access on reserves. The answer is to move toward a shared responsibility model, which brings in local governments and private lenders.

Governments have key support roles to play to ensure this happens. That involves creating the legal and regulatory framework for markets to operate in, ensuring orderly planning of growth and adequate infrastructure, and accelerating investments with the right incentive structures when needed.

Government may also provide transitional remedial housing for those who need it, in ways that ensure the same effort is required for the same benefits in all parts of the country.

Many Indigenous communities have already found the optimal balance between private and public involvement in housing. These case studies must be examined and emulated for all.

However, much of the main transformation has been staring us in the face for some time.

In 2008, the Institute on Governance (IOG) – a non-profit think-tank – released a paper on how to improve First Nations housing. Many of its insights and recommendations still hold true and the government should re-evaluate them as it prepares its legislative agenda.

The first area is ensuring housing is treated like a business. That means day-to-day housing decisions are divorced from community politics. And it means instituting a variety of housing tenure, from quasi home-ownership to rental regimes, to rent to purchase, to rent subsidies.

That means rent is collected. Communities that use this model also started charging for utilities like drinking water and electricity. And they began developing several other sources to complement government funding (e.g., from individuals, financial institutions and revolving loan funds).

Well-run Indigenous housing policies also correctly view housing as a problem of governance. The report’s authors concluded that for housing to work on First Nations, they needed political will, community support, and managerial and technical capacity. Indigenous communities need to accept housing as a local issue.

However, housing is often the responsibility of other entities.

The vast array of federal programs and policies surrounding housing on reserves means it’s still viewed as a government responsibility. This needs to fundamentally change. The government must stop smothering bands with controlling policies and its we-know-best mentality.

The Harvard Project on American Indian Economic Development long ago identified that economic development on reservations was first and foremost a political problem. Governments must create the institutions to allow markets and services to flourish, and then must largely step out of the way.

Canada’s Indigenous communities are no different. They also play a critical role in creating fair and transparent rules.

The Harvard Project researchers also concluded that: “Making the federal government bear responsibility for improving economic conditions on Indian reservations may be good political rhetoric, but it is a bad economic strategy. When tribes take responsibility for what happens economically on reservations and have the practical power and capacity to act on their own behalf, they start down the road to improving reservation conditions.”

Canada’s Indigenous communities should view housing through the same lens.

Housing is fundamentally a political issue, requiring transformational leadership and community support to succeed. First Nation governments must adopt clear and enforceable rules for housing on reserve

The best-run Indigenous housing programs have firewall policies between elected politicians and independent housing committees. The authors define this transformation as a classic case of “short-term pain” (in the form of rents, utility charges, evictions, restrictions on the use of property and householder maintenance responsibilities) for “long-term gain” (in the form of improved housing, enhanced individual pride and perhaps equity, and indirect benefits in terms of better education and health outcomes).

The problem is Indigenous leadership and government don’t want to deal with some of the elephants in the room, the first being that the property restrictions on reserves severely limit First Nation lending options for housing.

The federal government should reopen the conversation about market housing and private property ownership on reserves. This doesn’t have to be a scary conversation, but one in which the government will help bands every step of the way.

The other elephant in the room is the governance problem at the heart of many housing issues on reserves. It’s easier for governments just to announce spending targets than to ask First Nations to deal seriously with ongoing housing authority issues.

The IOG report proposes an outside accreditation system for First Nation housing, in which bands would have to adopt certain governance and managerial standards to enter a housing regime. The key is that Indigenous bodies run these entities and the federal government gets out of the way.

Government should make way for a much more prominent private sector on reserves and encourage bands to seriously address the governance problem at the heart of the housing issue.

Joseph Quesnel is a senior research associate for the Frontier Centre for Public Policy.

Joseph is one of our Thought Leaders. For interview requests, click here.


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