Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019

Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
   Designing for Systemic
   Impact : Rent Subsidies and
   the Canada Housing Benefit
..                                                                    Presented by

                           Adrienne Pacini, Principal, Strategic Design, SHS Consulting
        Esther de Vos, Director, Policy, Research and Education, Capital Region Housing
          Jay Martin, Senior Manager, Human and Social Services Team, KPMG Canada

Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
Nice to meet you!

Adrienne Pacini               Esther de Vos                Jay Martin
Principal, Strategic Design   Director, Policy, Research   Senior Manager, Human
SHS Consulting                and Education                and Social Services Team
                              Capital Region Housing       KPMG Canada
Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
in Canada
Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
Rent Supplements in Canada
• Generally geared to helping achieve affordability in the private
  rental market.
• Essentially, two models in use today:

    1. Private Landlord                      2. Direct-to-Tenant
    Where the supplement is paid             Operates more like a portable
    directly to the private market           benefit and paid directly to the
    landlord and the recipient pays up       tenant living in private market
    to the threshold of affordability (25-   rental.
    30% depending on the province or

: Esther de Vos, 2019                                                           4
Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
Rent Supplements in Canada
Policy Objectives

The objectives of the current
models are understood as:
1. Creating housing affordability     3. Achieving a mixed-income
   in the private rental market for      neighbourhood
   low income households              4. Mitigating rent inflation
2. Addressing (in some cases)            (particularly for the private
   insufficient supply of social or      landlord model)
   affordable housing

: Esther de Vos, 2019                                                    5
Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
Rent Supplement design
• Most current models are aimed      • Designed more so as a
  at a particular demographic          “rationed allowance” rather
  (low-income households)              than a universal benefit
• Some programs exclude              • Administered by the
  households receiving income          provincial/territorial
  assistance, some do not              governments
• Most have some form of             • Seen as an alternative to social
  residency requirement and            housing as social housing
  eligibility criteria (similar to     tenants are not eligible for rent
  that of social housing)              supplements

: Esther de Vos, 2019                                                      6
Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
A New Canada Housing Benefit
The National Housing Strategy articulates the following about a
new Canada Housing Benefit:

• It will be in partnership with         • It may be open to those living in
  provincial and territorial               social housing, on a waitlist for
  governments                              social housing or those living in
                                           private market rental without
• It will be a new tool to address
                                           housing affordability
  housing affordability challenges
                                         • Much is still unknown about the
• It will be flexible to address local
                                           program design, benefit amount and

: Esther de Vos, 2019                                                           7
Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
Designing for Systemic Impact
Possible Objectives for the New Benefit

• Addressing housing affordability
• Increasing the supply of affordable housing
• Creating neighbourhood diversity through a mixed-
  income approach
• Addressing the financial sustainability of social housing
• Creating a more flexible and localized approach to
  respond to those in housing need

: Esther de Vos, 2019                                         8
Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
Program Design
Possible Design Options for Canada

• Universal benefit model
• Housing voucher/portable housing benefit to specific
  demographic in housing need
• Private Landlord – eligible to a specific demographic in
  housing need

: Esther de Vos, 2019                                        9
Designing for Systemic - Impact : Rent Subsidies and the Canada Housing Benefit - April 2019
Looking to
Canada + Australia
… The same but different.

Some similarities                       Some differences

• Pockets of very high and rising       • Substantial cash transfers for renters
  housing prices                          paid through the (federal) social
• Subsidized social housing (rent         security system – to supplement
  capped at 30% of income) operated       social housing supply
  by provinces and not-for-profits      • Municipalities tend to stay out of
• Nearly 200,000 on waiting lists for     housing. Very few have
  subsidized social housing               homelessness or poverty strategies

: Jay Martin, 2019                                                                 11
Canada + Australia
Context: Canada and Australia have some of the world’s least affordable housing markets

                                                   Pockets of very high housing prices
                                                   have left parts of Canada and Australia
                                                   the least affordable housing markets in
                                                   the world.

                                                   Many towns and cities, particularly in
                                                   regional areas, remain more affordable.

                                                        Chart Source: HuffPost Canada, median multiple for each
                                                   market indicates ratio of median house price to median incomes
                                                                                                        (Q3, 2018)   12
Rent Assistance in Australia
• Rent Assistance was introduced in 1985,                   • Rent Assistance is not paid for renters
  and has been extended to new groups                         living in social housing operated by
  over time.                                                  governments, although it IS paid where
                                                              social housing is provided by not for
• Requires renters to pay a minimum rent,
                                                              profits. In these cases, it acts as an
  then pays 75% of actual rent, above the
                                                              operating subsidy to not for profits.
  threshold, to a maximum amount
• Eligibility linked to income support                      • In June 2017, median monthly Rent
  payment or child benefit, and reduced                       Assistance payment was $286 and
  for private income.                                         median monthly rent was $953.

• All amounts and payments are uniform
  across Australia. There are no provincial
  or local differences in amounts or
                                          Source: Parliamentary Library Research Paper, “Housing and the social security system”;
: Jay Martin, 2019                                Australian Institute for Health and Welfare 2017, Housing Assistance in Australia   13
Expenditure on CRA (real $2013-14 and nominal) 1984-85 to 2014-15

                                                                                                          In real terms, over the last 30
                                                                                                          years, Rent Assistance
                                                                                                          spending has risen from less
                                                                                                          than $240 million per year to
                                                                                                          over $4.5 billion per year
                                                                                                          (real $ 2013-14) – an increase
                                                                                                          of nearly 20 times.

                                                                                                          Cost drivers are primarily
                                                                                                          increased numbers of eligible
                                                                                                          people renting (due to
                                                                                                          decreased home ownership)
                                                                                                          and higher rents.

Source: DSS in Gounder (2016) Appraising affordable housing in contemporary Australian economic infrastructure supply discourse; Parliament of Australia,
Housing and the social security system, October 2016.                                                                                                       14
Proportion of low income renters spending more than 30% of gross household
income on rent 2007/18 to 2015-16

Despite massively increased expenditure, a considerable, and growing, number of
households live in rental stress.
Source: Productivity Commission Report on Government Services 2017, Volume G      15
Cash Transfers
Selling Points

• Improve affordability at a low    • Can support mixed
  per dwelling cost (no capital       neighbourhoods / diversity.
  spend).                           • People able to make own
• Low administrative overhead.        decisions regarding
• Can avoid poverty traps &           type/location of rent.
  ‘housing cliffs’ – when
  households ‘fall out of’ social
  housing eligibility.

: Jay Martin, 2019                                                  16
Cash Transfers

• Need to pick a value and an uplift   • Don’t address non-financial
  process that balances meaningful       barriers to renting.
  assistance with sustainability.      • Risk contributing to / worsening
• Can be difficult to predict costs,     price inflation.
  especially over time, and can end    • Can contribute to workforce
  up expensive for government.           disincentives – because it needs
• No guarantee housing will be           to cut out at some point.
  affordable, available, or ‘decent’

: Jay Martin, 2019                                                          17
Where Australia Landed

• Uniformity in payments (vs.         • Maintenance of dual system (vs.
  responsiveness to local contexts      tenure neutral)
  and individual situations)          • Housing free market-oriented
• Co-payment for part of housing        policy (vs. controlling possible
  costs incurred (vs. guarantee of      rental inflation)
  affordable housing)                 • Reliance on ‘mom and dad’
• Adjusts with changes in cost of       investors to supply and manage
  living (vs. cost of housing)          housing (vs. incentivizing
• Shallow subsidy to many (vs. deep     developers / governments to
  subsidy to a few)                     construct and manage new supply)

: Jay Martin, 2019                                                         18
What’s Working in Australia

• Rent assistance does make             • No separate eligibility process – all
  housing more affordable than it         income support payments are
  would otherwise have been.              wrapped up together, and
• Limited interference in the market      delivered in one go.
  – the subsidy is hidden and           • Cost of administration is relatively
  landlords don’t know how much it        minimal.
  is or who gets it.
• Supports people to make choices
  regarding rental location, amenity,
  etc., and to not have to move
  when their circumstances change.

: Jay Martin, 2019                                                                19
Challenges in the Australian System
•   In unaffordable markets, does not             •   Extends workforce disincentives (high
    necessarily deliver affordability – despite       Effective Marginal Tax Rates) into high
    substantial spending.                             incomes
•   Linkage to cost of living means it has        •   Market reliance means government
    fallen behind as a proportion of housing          doesn’t have control over other levers –
    costs, despite spending increases.                e.g. neighbourhood diversity / amenity of
                                                      subsidized housing
•   Massive cost increases in spending over
    decades – making increased depth
    financially difficult.
•   Growing difference between cost of
    private rent (after assistance) and social
    housing maintains substantial incentive
    to try to get into social housing
    (including through reducing income).

: Jay Martin, 2019                                                                                20
Calls for Reform in Australia
• Increase the rate of payment for                                            • Cash out all forms of housing
  rent assistance and link increases                                            subsidy with government
  to the cost of housing.                                                       relinquishing its role in supply.
• Consider if eligibility should be                                           • Deliver equity between similar
  tightened (i.e. fewer people eligible                                         people with similar needs in similar
  for more).                                                                    housing.
• End split responsibilities between
  province and federal government
  for housing.

For further discussion see:
•   2015 Senate Economics References Committee, Out of reach? The Australian housing affordability challenge. Canberra: Parliament of
•   2015 Reform of the Federation Discussion Paper. Canberra: Commonwealth of Australia.
•   2016 Housing and the social security system. Parliamentary Library Research Paper. Canberra: Department of Parliamentary Services
– the –

Co-designing within
Complexity : Learnings from
the Canada Housing Benefit
Solutions Labs
Our context :

CMHC identified the design of a
Canada Housing Benefit as a
complex problem requiring an
innovative human-centred
approach through a solutions lab.
This presentation :

1. How do we identify a complex
2. What is a solutions lab approach and
   what makes it different?
3. What did our process look like?
4. What did we learn?
SHS Consulting :

We are a team of urbanists and
strategists creating solutions to
foster community inclusion and
housing opportunities for all.

SHS Consulting :
                    Development   Innovation +
Policy + Research   Consulting    Strategic Design

Our team :

Christine Pacini               Adrienne Pacini                 Cheryl Hsu
•   Founding partner at SHS    •   MDes, Strategic             •   MDes, Strategic
    Consulting with 35 years       Foresight and Innovation        Foresight and Innovation
    of experience
                               •   Housing research, policy,   •   Strategic design, systems
•   Housing policy,                and strategic design            change, health and food
    affordable housing                                             systems research
    development, strategy
Our travels :


                                                                  St. John’s
                                      Prince Albert

                                  Saskatoon                    Halifax

: SHS Consulting, 2019                                                    30
Our conversations :

        4                 6         11        50+ ~200
  provinces +            cities   co-design     hours of    workshop
   territories                    workshops   engagement   participants

: SHS Consulting, 2019                                                    31
Part 1 :

How do we identify
complex problems?

Complex Problems

It likely feels
like you’re
dealing with

Complex Problems

According to Rittel
& Webber (1973)…                                   6.   Wicked problems do not have an
                                                        enumerable set of potential solutions.
                                                   7.   Every wicked problem is essentially
1.   There is no definitive formulation of a
     wicked problem.
                                                   8.   Wicked problems are symptoms of other
2.   Wicked problems have no stopping rule.
3.   Solutions are not true-or-false, but better
                                                   9.   The existence of a discrepancy
     or worse.
                                                        representing a wicked problem can be
4.   There is no immediate and no ultimate              explained in numerous ways.
     test of a solution.
                                                   10. The social planner is liable for the
5.   Every solution is a “one-shot operation”;         consequences of the actions they
     every attempt counts significantly.               generate.
                                                                             Source: Rittel and Webber, 1973.   34
Complex Problems

Not only is              “We had a solution that
housing                  was searching for a
affordability a          problem to solve.”

: SHS Consulting, 2019                             36
Part 2 :

What is a solutions lab
approach and what
makes it different?

Solutions Labs

Embedded design labs are
temporal entities, within
organizations that utilize design
knowledge and capacity to
enhance innovation processes.
: Jonathon Romm, Institutt for Design, Oslo, Norway

: SHS Consulting, 2019                                38

Co-design is a creative, inclusive
approach to problem-solving, and
developing and evaluating

: SHS Consulting, 2019               39

Principles for co-design

Co-design is                   Everyone is an expert in     Co-design is iterative and
participatory—people           their own domain, and        inclusive—from concept
involved in the problem are    brings value through their   creation to testing and
involved in solving the        experience and through       evaluation of ideas.
problem.                       contribution to the design

Co-design takes a human-       Co-design embraces           We have a bias towards
centred approach, with the     ambiguity by withholding     “showing” instead of
person at the forefront of     the urge to quickly get to   “telling” by making ideas
the problem you’re trying to   “the answer”.                tangible.
solve by building empathy.

: SHS Consulting, 2019                                                                   40
Bringing People to the Forefront

The balanced breakthrough
model describes the place
where innovative solutions


The sweet spot for innovation
is where we find a solution
balancing desirability,
                                   desirability           viability
feasibility, and viability.

: SHS Consulting, 2019                    Source: figure adapted from Brown, 2008 and Stanford d.School   41
Bringing People to the Forefront

In design, we start by
exploring what solutions
might be desirable for future
beneficiaries of the CHB.


                         Start here!   desirability           viability

: SHS Consulting, 2019                        Source: figure adapted from Brown, 2008 and Stanford d.School   42
Part 3 :

What did our process
look like?

Our challenge :

How might we guide a range of
stakeholders through a co-design
process to envision future
possibilities for a Canada Housing
Benefit in their communities?
: SHS Consulting, 2019               44

Moment of                               Moment of
divergence                              divergence

                          Moment of                  Moment of
                          convergence                convergence

 : SHS Consulting, 2019                                            45

    Discovery                        Co-Development                                                       Roadmap

Problem Finding                                                      Solution Development
Discovery, vision, and insight                                       Discovery, vision, and insight
•     Literature review                                              •   Workshop 2
•     Stakeholder interviews

                                 Problem Framing                                                      Refining and articulating
                                 Focusing on the definition of the                                    potential ways forward
                                 problem we’re trying to solve                                        •   Data synthesis
    : SHS Consulting, 2019       •   Workshop 1                                                       •   Insight development     47
Problem Finding
Discovery :
Key Questions                               Tools + Methods
1.     Who is in greatest need of housing   • Literature review
                                            • Stakeholder interviews
2. What are their pain points or
   moments of success along their
   journey?                                            +
3. What barriers and enablers to
   change exist within the system?
4. What competing priorities exist
   among stakeholders?

: SHS Consulting, 2019                                                              48
Problem Framing
Workshop 1 :
Key Questions                            Tools + Methods
1.     How might we empathize with the   • Personas of potential benefit
       journey and needs of the people     recipients
       who will use the Canada Housing
                                         • Empathy maps of current
2. What does the program have to
                                         • Success criteria development
   address to be successful?

: SHS Consulting, 2019                                                     49
Empathy Maps

: SHS Consulting, 2019   53
Success Criteria

Think about the success criteria as design
constraints to help you focus your thinking.

                                all of the possible
                                solutions to your

                                the solutions that fit
                                within your design
                                constraints or success

: SHS Consulting, 2019                                   57
Pause :

and Sense-
… Also known as our

Solution Development
Workshop 2 :
Before starting, we brought back
our synthesis work and confirmed:
• The articulation of the problem that
  the benefit will aim to solve (in the
  form of a “How might we…”
  question; and
• The success criteria that we will use
  as a guide to design the elements of
  the benefit.

: SHS Consulting, 2019                                           59
Solution Development
Workshop 2 :
Key Questions                              Tools + Methods
1.     What might a desirable housing      • Mapping the elements of the
       benefit look like for recipients?     benefit on a canvas
2. What new relationships, roles, and      • Low-fi prototype-building
   responsibilities might we need to
                                           • Group presentations
   consider in delivering this

: SHS Consulting, 2019                                                     60
Benefit Canvas

The objective for idea generation is to think
creatively and move outside the limits of every day
constraints to discover innovative solutions.


                                                    4.                      6.
                                                  build                   focus
                                                 on other                on th
      1.                                                                       e
                                                  ideas                  topic
    go for             2.
   quantity           be                                        5.
                    visual           3.                     encourage
                                   defer                    wild ideas
                                   d g e m ent

Benefit Canvas

                              ACTIVITY INSTRUCTIONS
Begin to cluster your ideas
around themes to see new      As a group
solutions emerge.             1. Work on your own first, then take turns share
                                 your ideas with your group. As you are
                                 sharing your ideas, start to cluster similar ideas
                                 along themes and patterns.
                              2. Take a look at the themes that have emerged:
                                  •   Which ideas stand out?
                                  •   Can any of the ideas be combined into a
                                      more comprehensive solution?
                                  •   Are there any similar innovations from
                                      other spaces (e.g. technology) that you
                                      can draw inspiration from?
                                  •   Write down any new solutions that
                                      emerge from discussion.                     64
Low-Fi Prototyping
                         • It brings your idea out of
                           your head and into the real
Why                      • It allows the group to react

                           to, build on, and interact
                           with ideas in an
                           unconventional way.

Is it just arts
                         • It forces people to take a
                           leap of faith and articulate,
                           build, and execute an idea.
and crafts?              • It helps keep the humans at
                           the centre of the design
: SHS Consulting, 2019                                     67
Part 4 :

What did we learn?

We learned :

Our job was, in large part, to
facilitate an appetite for
working through complexity

with a human-centred lens.

: SHS Consulting, 2019           70
We learned :

Our job was also, in large part,
to advocate for that human-
centred process, including

involving individuals with lived
experience and expertise.
: SHS Consulting, 2019             73
We learned :

Take the time to understand
who you should involve in the
process, how you will involve

them, and at what point in the
: SHS Consulting, 2019           74
We learned :


: SHS Consulting, 2019       75
We learned :

Get to prototyping quickly, but
with alignment and intention.

: SHS Consulting, 2019            77
We learned :

This process is most successful
when you can create a space of
trust, transparency, presence,

and other conditions for
: SHS Consulting, 2019            78
We learned :

Close out the process by asking
your group, “what did we
achieve alignment on?”   +

: SHS Consulting, 2019            83
We learned :

Do not underestimate the
power of a good space, good
food, and adequate       +

refreshment breaks!

: SHS Consulting, 2019        84

That was fast!
Want to discuss further?
Have an idea for a Solutions Lab?
Let’s continue the conversation.
Adrienne Pacini
Principal, Strategic Design

@adriennepacini :
     Thank you.
     Questions? Comments?

                   Adrienne Pacini :
                   Esther de Vos :
                       Jay Martin :

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