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An economic analysis of public housing in Yellowknife, Northwest Territories Steele, Margaret Jean


For many years, social housing policy in Canada has relied upon supply-side programs. Recently, these programs have come under criticism for failing to serve the needs of poor households, precipitating a philosophical shift toward income supplement programs. While evaluations of past programs support this shift, most studies have been done at the national level and may not reflect the housing needs of specific regions or communities in Canada. This study evaluates a supply-side housing program for one community in northern Canada - Yellowknife, Northwest Territories. Drawing upon the tools of welfare economics, the study evaluates the Public Housing Program in Yellowknife in terms of economic efficiency and equity. The study analyses the program from the viewpoints of the Canadian public and the residents of the N.W.T. In both cases, the Net Present Value, calculated from measurable costs and benefits, is negative suggesting the program is not economically efficient. Non-tenant benefits of between $446,082 and $966,955 per year are required to justify the program from the national perspective and between $123,724 and $320,304 from the territorial perspective. The analysis suggests the program is promoting a small degree of equity. Benefits from the program are greater for households with lower incomes and decline by approximately $11 for every $100 increase in annual household income. The program supports horizontal equity with respect to age of household head, but there is some inequality with respect to sex as female-led households receive significantly greater benefits than their male counterparts. The results of the study are consistent with the economics literature. As expected, justification of the Public Housing Program in Yellowknife must appeal to notions other than economic efficiency. Advocates of the program may find support in the equity achievements of the program or in recent research suggesting that public housing programs have smaller work disincentive effects than programs of cash transfers.

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