Why not reinvest in housing co-ops?

I live in a housing co-op, and like it quite a bit. It seems like most co-ops have seen the amount of subsidy they receive from the federal government shrink substantially over the last few years.

The amount of subsidy that we receive at my co-op is tied to the interest rate of our mortgage. Normally a low mortgage rate is good for homeowners, but in our case lower mortgage rates have resulted in a dramatic subsidy reduction. In recent years, there have been thousands of lost subsidized units across the country, and in B.C. 800 subsidized units were lost in one round of mortgage renewals.

When we renewed our mortgage in 1999, the federal government reduced Rising Star’s subsidy from $122,000 a year to $61,000. This added up to $350,000 in lost subsidies since 1999, and has forced a decline in the number of subsidized units at Rising Star from 24 in 1998 to 11 in 2005; from 73% to 33% of our total units. The co-op has not been able to offer subsidy to any of our incoming members for the past seven years.

What has happened since the heyday of co-ops. Why is it that the federal government under Mulroney was more generous than subsequent Liberal governments.

Are housing co-ops still a relevant answer to this problem?