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Housing is in the news in Canada. Housing is always in the news in Canada. Because housing in Canada is a relentless catastrophe.
Going all in on the private rental market won’t solve Canada’s housing crisis. As corporate landlords gain a bigger stake in the market and small landlords drive class divide, we need public housing more than ever.
Writing in the Globe and Mail, freelance journalist Rob Csernyik argues we ought to normalize renting. Apparently, we are destined to rent. The goal, or dream, of home ownership is structurally out of reach, and yet we cling to it. Desperately. And we oftentimes take risky measures to reach it. But there is another way, evidently. “By not only normalizing but embracing renting we can redefine what it means to live in Canada,” writes Csernyik. “This alone won’t solve housing gaps and spur necessary construction, but shifting public sentiment can offer an impetus for that necessary journey. More importantly, we can unlock economic gains that are currently sidelined.” Renting frees up economic opportunity, so the logic goes. This economic liberty is good for everyone — renters and workers, landlords and businesses alike. To live in harmony, after all, the economy has work for everyone.
Csernyik is on to something. Sort of. Individual housing ownership as we practice it produces cascading negative externalities. Lots of them. It harms urban infrastructure. It shapes retirement — or a lack thereof. It creates homelessness. It makes people miserable. But is the answer to double down on market ownership and reinforce a society of renters and rentiers? This idea makes little sense in a world in which large institutional investors are buying up housing stock en masse and fighting to control the rental market. It makes even less sense in a country in which class divide is entrenched and oligopoly and monopoly in rental markets is a looming threat.
The Owning Class
Remember that in the scenario proposed by Csernyik, Canadians should give up on the dream of homeownership and instead elect to rent. However, the houses that everyone will soon be renting will still belong to someone. So, who are these people to whom we are to cede the entire field of ownership?
According to Statistics Canada, in 2020, the “typical landlord” was “a couple, living in a big census metropolitan area and working.” Through an analysis of tax data, they found that “just over four in five rental income earners were in couple families (81.0 percent), close to half of rental income earners were aged forty-five to sixty-four (46.7 percent), and most lived in the census metropolitan area (CMA) of Toronto (21.2 percent), Montréal (13.5 percent), or Vancouver (10.7 percent).” Moreover, two-thirds of these folks took home other sources of income through “wages, salaries, and commissions.” As we know, wealth compounds and creates a world in which structural class divides are insurmountable — owners are all in the same club and everyone else is out in the cold.
Institutional investors are a growing threat to housing. Your institutional practitioners are wholly uninterested in attempting to live up to the myth of landlordism as the provision of safe, sanitary housing at an affordable price. Their interest is in endless capital accumulation and the maximization of profits. That’s what they do. The well-being of their renters is, at best, a secondary concern. Institutional investors, however, aren’t actually the primary source of rentals in Canada.
Statistics Canada found that among non-institutional landlords — which remain the “typical landlord” — “the median wage, salary and commission income of rental income earners with wages was $59,800 in 2020, which is more than 50 percent higher than tax filers without rental income ($38,570).” It’s not exactly the difference between an oligarch and you and me, but it’s a structural class difference that entrenches a have-and-have-not divide and a control over access to a fundamental human need: shelter. Throwing our housing needs at the feet of mom-and-pop landlords — per Csernyik’s proposal — will not save us in the long run.
In 2021, University of Waterloo’s Martine August, an assistant professor in the school of planning, argued that financial landlords — corporate giants — were on the rise in Canada. Her piece is an outstanding breakdown of the problem with these institutions. According to her, those giants are made up of “private equity firms, asset managers, publicly listed companies, real estate investment trusts (REITs) and financial institutions” who are “united in their treatment of apartment homes as financial assets.”
These institutions, she notes,
"operate with a single-minded focus on delivering investor profits. This leads them to subordinate other objectives, including social, environmental or equity-related goals, as a result. When it comes to apartments, finance capital values high revenues over preserving affordable, high-quality apartments for all residents."
As you’d expect, financial landlords drive rental prices higher to consolidate their hold over rental stock. In the wake of their success, one would expect the proportion of noninstitutional rentiers to fall in proportion to a rise in their institutional counterparts. It doesn’t make sense to defend or advocate for any sort of landlord, but if you had to have a sort, I’d vote for the noninstitutional lot. Still, the institutional ones are growing fast, accumulating tens of thousands of units. “In some communities,” August writes, “financial firms have effective monopolies over the local market.”
In case anyone thinks for a second this trend is good for renters in any way, or that governments have kept up in fighting for affordable rentals, August cites urban planner Steve Pomeroy, noting that “for every one affordable unit created by government funding, approximately 15 become unaffordable due to the financialization of rental housing.” The trend is bad for renters and it will no doubt get worse. Even purpose-built rental units won’t save anyone if they are structurally exploited by investors who are pricing renters into oblivion.
The Answer Is Public Housing
We don’t talk about non-market housing enough in Canada. And we certainly don’t talk about public housing enough in Canada. Writing in the Nation, Matthew Gordon Lasner, as associate professor of urban studies and planning at Hunter College, makes the case for public housing. It could be done well, affordably, and effectively, he argues — producing positive knock-on effects for people and the economy at scale. It’s a persuasive case.
There are more and more initiatives for public housing in the United States. At the national level, Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders are sponsoring the Green New Deal for Public Housing Act. Rep. Ilhan Omar has introduced the Homes for All Act, which promises a massive expansion in public housing. It would further guarantee housing as a human right.
Omar’s bill would plough $1 trillion into the construction of twelve million new, permanently affordable public and social housing units. The only plan in Canada that comes close to this sort of ambition is the terrifying prospect of a private developer buying $1 billion worth of single family residences and turning them into rental properties. This would, of course, be a large step toward Csernyik’s happy country of renters.
Even at the local level in the United States, plans like Seattle’s Social Housing Initiative, demonstrate a willingness to advocate for nonmarket housing. Seattle’s initiative, which seems set to pass, will create a Social Housing Developer to expand and manage public housing in the city. Government plans in Canada, meanwhile — contra Csernyik’s mad scheme — maintain the quixotic promise to “unlock homeownership.”
This is a shame because Canada has a potent arrow in its quiver if ever it makes the sane decision to build out its anemic social housing. The Canada Mortgage and Housing Corporation (CMHC), originally the Central Mortgage and Housing Corporation (CMHC), was created to house new families in postwar Canada. In the 1960s and 1970s, the CMHC was integral to building public and social housing. By its peak in the 1970s, the CMHC was constructing hundreds of thousands of social housing units every year. Needless to say, had the CMHC instead suggested that Canadians just make peace with renting, the social housing stock that does exist in the country would be even more threadbare than it is.
The federal government has the spending power to invest in projects across the country. If they decided to make public housing a priority, they could get more built. The same, of course, applies to the provinces. The problem isn’t so much an inherent one — that it truly can’t be done — as it is a lack of political interest or will and a stubborn believe that the market will save us. It won’t. Particularly a market of renters and rentiers. It strains credulity to imagine that more renters can set things right. It is a deeply flawed argument that entirely sidesteps the matter of who will own the stock that is available to rent. It’s time for a change and a massive shift to high-quality public housing.