April 5 2024

A new report from the Broadbent Institute and the Friedrich-Ebert-Stiftung Canada, called Dreams and Realities on the Home Front: Canadians’ Call for Government Action on Housing Affordability, found 80% of people surveyed want the federal government to start building housing again. The report surveyed residents of the BC Lower Mainland and the Greater Toronto and Hamilton Area, and the research identified who is most affected by the housing crisis, and what policy changes are seen as needed.

Financialization and end of federal investment reasons for housing crisis

The report recognized that, “the disappearance of public investment in affordable housing supply over decades and the increasing financialization of housing—where mortgages and homes are treated as assets for financial investment—are major factors contributing to the present affordability crisis.”

Non-market housing preferred

Of the 80% of respondents who want the federal government to get back into building housing, over half want more non-market housing. In this paper, non-market housing is defined as housing “at below-market rates or is tailored to people’s incomes to make them more affordable.” A strong majority of homeowners (74%) and renters (87%) want to see the government get back into housing, with 47% of homeowners and 51% of renters preferring the non-market housing approach.

Impact of housing crisis varies according to age and income

People with modest incomes, younger people, and renters are the ones most affected by the housing crisis.

More than one-third of respondents (37%) say that they would not be able to afford their current housing situation if the cost of their monthly rent or mortgage payments increased by 10% in the next year. But among people aged 18 to 29, that figure jumped to 53%. Similarly, 50% of people with household incomes below $100,000 said that they could not afford a 10% increase in rent or mortgage payments.

What is key? — Making people aware the housing crisis resulted from the federal govt. not building affordable homes and from financialization

The survey also revealed that many Canadians aren’t aware of the root causes of the housing crisis, or of strategies that would solve the housing crisis. Instead, they place much of the blame on immigrants and international students, and overestimate the impact of foreign investors.

Statistics and expert opinion have shown that these groups actually have a low impact on the housing market. More needs to done to communicate the cause of the housing crisis to the general population, so they can place the blame squarely where it belongs: on the federal government cutting funding for affordable housing, and on the financialization of housing.

Governments building housing, plus affordable-housing legislation, is the only effective solution

Federal Conservative leader Pierre Poilievre claims that the solution to the crisis is that the government should get out of home building. But the reality is that the federal government has already been absent for decades.

The ongoing affordability crisis is because federal and provincial governments stopped building affordable housing in the 1990s and allowed the financialization of housing. But it is also important that, when federal and provincial governments build housing, they ensure that the housing stays affordable.

Unfortunately, the current National Housing Strategy only requires affordable housing built by for-profit companies to stay affordable for 10 years after construction. It’s safe to assume that for-profit owners will spike the rents as soon as they can, severely impacting the people who rely on affordable housing the most: women, 2SLGBTQIA+ people, BIPOC, and people with disabilities. In contrast, public, non-profit and co-operative housing stays affordable.

Governments must eliminate the affordable-housing deficit, but the private market must also be reformed. We need provincial governments to reform property taxes to target real estate speculators and to then use the funds for affordable housing and infrastructure. We also need stronger renter protections that prevent landlords from doing unnecessary renovictions.

A combination of increasing the inventory of affordable housing that stays affordable, plus legislation, is what is needed to fix the housing affordability crisis.