In 2007, the Alberta Affordable Housing Task Force recommended that the Government of Alberta enhance capital resources for affordable housing supply. The task force estimated the need for 12,000 affordable housing units at a cost of $480 million annually over five years for a total cost of $2.4 billion. The Department of Municipal Affairs responded by creating the municipal block funding and housing capital initiatives programs to fund the development of 11,000 affordable housing units for low-income Albertans.

In September 2011, the department reported that it had met its objective of approving funding for the development of 11,000 affordable housing units. In total, the department’s investment of $1.1 billion combined with $1.1 billion of investment from partnerships with municipalities, non-profit groups and the private sector resulted in $2.2 billion of investment in affordable housing across the province. As of April 2013, 5,900 units have been built.5 The remaining units are in various stages of development.

What we examined

We examined the department’s systems to plan, award, monitor, report on and evaluate the two affordable housing grant programs. Our objective was to determine whether the department had adequate systems to deliver grant programs to increase Alberta’s supply of affordable housing. Our audit was not an assessment of whether the programs’ goals were met, but rather an audit of the systems management used to deliver the grant programs.

What we found

The department approved funding to its partners for the development of 12,000 affordable housing units over a five-year period, which met the program objective of increasing supply in Alberta. However, we found several areas where the department’s systems to deliver grant funding for these two programs could be improved.

Grant eligibility criteria

The department’s eligibility criteria could have been better aligned with the programs’ objectives. The eligibility criteria of need and affordability were assigned fewer points than we would have expected for a program designed to provide additional affordable housing options to Albertans in need. Some grant applicants had high combined scores for need and affordability but were not approved for funding.

Documentation of decisions

The department’s awarding process was not well documented. Significant judgement was applied by the department in selecting who would receive grant funding. However, the rationale for these critical judgements was not well documented.

Monitoring of recipients

The department has not sufficiently monitored grant recipients to ensure they comply with their obligations. Many of the grant recipients we visited did not comply, in some aspect, with the grant agreement because they charged rental rates higher than allowed or had ineligible tenants living in affordable housing units.

Evaluation of grant programs

The department does not have an evaluation strategy for its affordable housing grant programs. It has not conducted evaluations of these programs to assess whether the programs are effective. Also, the department does not have sufficient data or comprehensive performance measures to evaluate and assess the performance of the two programs.

What needs to be done

We made two recommendations to the department to improve its monitoring processes and develop an effective evaluation system. The grant agreements require municipal block funding and housing capital initiatives grant recipients to provide and maintain affordable housing for 10 and 20 years, respectively.

Therefore, it is critical that the department establishes and maintains effective monitoring processes to ensure these housing units remain affordable, available and the savings are passed along to Albertans in need.

The department should also evaluate whether its affordable housing grant programs are operating efficiently, achieving value for money and meeting their objectives. Evaluations become more difficult if performance targets or benchmarks are not established or considered as part of the program design. However, evaluations should still be conducted and can be useful to identify lessons learned that the department could apply to future housing grant programs.

We did not make recommendations related to our findings for the planning and awarding processes because grant applications are no longer being accepted. However, we expect the department to apply lessons learned to its other housing grant programs.

Why this is important to Albertans

The department has invested $1.1 billion dollars to increase Alberta’s supply of affordable housing. Albertans need to have confidence that this investment is supporting the development of housing options that serve the needs of low income Albertans. For Albertans to receive value for money from these programs, those who qualify to live in these units should benefit from increased availability and lower rates for affordable housing.

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