We need to see housing as a home, not just an investment
Federal government ministers have just gathered for their annual late summer cabinet retreat, knowing that housing affordability is a top priority for Canadians.
This is because, for a growing number of people in Canada, the housing market is broken. At its core, Canada’s housing market is afflicted by decades of financialization – the treatment of housing primarily as an investment rather than a place to live.
The cost of home ownership remains close to all-time highs relative to incomes. Tight rental markets have given landlords tremendous bargaining power to raise rents sky-high. And homelessness is pervasive across the country, from street and park encampments to people getting by in RVs or couch surfing.
Housing affordability is worse than in 2017 when the federal government announced the National Housing Strategy (NHS), which recognized in legislation that “housing is essential to the inherent dignity and well-being of the person” and that “the right to housing is a fundamental human right affirmed in international law.”
In practice, the NHS has failed to live up to those ideals. If anything, the NHS is supporting the ongoing financialization of Canada’s housing stock by emphasizing low-interest loans to private developers building market rental housing.
To remedy this, the federal government should amplify its support for non-market housing, including low-cost financing for co-ops and non-profit rental housing. The feds should also put federal land into use for the development of non-market affordable housing, and double down by acquiring additional public land.
New units can be produced at lower cost by cutting out developer profits, pressing local governments to waive development fees, and eliminating the GST on new rental housing.
Once these upfront costs of getting new housing built are covered, the stream of rental income from new housing can be used to repay the initial investment.
Another needed change is for Indigenous communities, which saw a paltry $4 billion allocated for Indigenous housing in the 2023 federal budget – rather than the $56 billion investment in urban, rural, and northern Indigenous housing recommended by Canada’s own National Housing Council.
If it was ambitious, the federal government could build one million new non-market and co-op housing units over the next decade. It could create housing policies with specific targets for Indigenous peoples, seniors, people with disabilities, immigrant families, lone parents, and people fleeing domestic violence.
By renovating the National Housing Strategy (NHS), it can genuinely and positively impact those who bear the brunt of Canada’s housing and homelessness crisis. The feds should also continue the Rental Construction Financing Initiative to provide low-interest loans for all rental housing projects – tied to more stringent criteria on providing affordable units – as higher interest rates continue to raise the cost of building.
In addition, federal support for the community housing sector to acquire existing affordable rental buildings would go a long way to keeping properties out of the hands of real estate investment trusts (REITs) aiming to renovict tenants to charge higher market rents.
British Columbia’s new $500 million Rental Protection Fund for non-profit housing providers to purchase existing rental buildings should be a model for a federal program.
These investments are not particularly costly from a budget perspective because, in most cases, the federal government would retain land or other assets.
An ambitious fiscal effort is needed for the federal government to make housing a human right. All of the tools above are available; what’s missing is the political will.
Marc Lee is a senior economist with the British Columbia office of the Canadian Centre for Policy Alternatives.
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