By: Yildiz Subuk, Staff Writer
Housing as a necessity
In 1976, Canada agreed to recognize housing as a human right, adhering to the Universal Declaration of Human Rights (1948) drafted by the United Nations. A right to housing does not necessarily entail that the government has to provide every single person with housing, but it does mean the government must uphold proper policies that allow citizens to have an adequate place to live. Some rules governments must abide by are: ensuring marginalized groups do not face barriers regarding access to housing, having access to services such as water, electricity, schools, and employment, as well as not having to worry about bad-faith evictions or displacements from residence.
According to Canada Mortgage and Housing Corporation (CMHC), housing that is affordable should take up less than 30% of a household’s monthly income. A recent report by Royal LePage finds that nearly 53% of Canadian households will spend more than that 30% standard on housing. 33% of Canadians specifically spend over 40% of their income on housing. Housing is clearly no longer affordable.
Current social housing programs help ensure that people have affordable housing. Social housing provides low-income individuals with housing options that are below current market price. In Canada, social housing is provided by provincial governments and non-profit organizations, however before 1996, the federal government was in charge of the housing sector. The Canadian government during the ‘90s had already begun to allow private investors, including real estate investment trusts (REITS) and landlords, to have more freedom over the housing market. With the cut of the co-op housing program in 1992, the start of a worsening issue was set in motion.
A historical overview of housing policies
Before the ‘90s, Canada had a couple different plans put in place to help lower to upper middle income citizens with housing needs. The 1930s brought government assisted aid for housing to Canada. It all started with the 1935 Dominion Housing Act, which mainly provided $20 million in housing loans to Canadians. The Federal Home Improvement Plan of 1937 helped finance interest rates on homes. In 1938, the National Housing Act (NHA) was introduced, and it allowed for the construction of low–rent housing units. The root of social housing can be traced back to the NHA, as it marked the beginning of the Canadian government prioritizing housing for low-income people.
Gregory Suttor, housing research consultant and lecturer in UofT, outlined the changes in housing policies from the ‘60s to the ‘90s in section 5.4 of his PhD thesis “Canadian Social Housing: Policy Evolution and Impacts on the Housing System and Urban Space.” During the ‘60s, the goal of social housing was to expand the range of the program to help a diverse range of Candains. The ‘70s and ‘80s saw the growth of government involvement in the housing sector.
Three temporary federal programs were introduced in the ‘80s to help Canadians with housing affordability. The Canadian Homeownership Stimulation Program offered grants to homebuyers. The Canada Mortgage Renewal Plan helped cover part of mortgage and property tax costs when renewal rates high. The Graduate Payment Mortgage Plan reduced monthly mortgage payments. The Canadian government stepped up when housing affordability reached a point of exhaustion. There were plans put in place to ensure housing cost does not exceed 30% of a household’s monthly income, so what changed after the ‘80s? Why did the Canadian government deprioritize housing affordability? The answer lies in neoliberalism infiltrating Canadian thinking.
Housing as capital gains
During the ‘90s, there was a clear shift in how the Canadian government viewed housing — before this period, housing was viewed as a necessity. The government had policies put in place that helped Canadians buy houses at an affordable rate, and provided forms of aid for lower-income Canadians, such as grants for homeowners and an emphasis on social housing programs.
“It took the severe [recession] of the mid-1990s and the global triumph of neoliberal ideas rippling across Canada to end the social housing era,” writes Suttor in his thesis.
Neoliberalism is the belief that the government should not interfere in the economy, promoting a focus on individualism. It follows the argument of “if you are poor, it’s your fault,” as if people are free to move up in society through hard-work alone. Neoliberalist thinking has been critiqued for its ignorance of social inequity, as it does not account for the fact marginalized groups tend to have barriers that disadvantage them significantly compared to others.
In 1992, Conservative leader Brian Mulroney announced that the co-operative housing program, which had built 60,000 homes for lower to middle income families, was to be cut. This decision provided short-term economic growth, but a long-term problem. Providing affordable housing, a basic necessity, was no longer the concern of the federal government. During the ‘90s, REITs were introduced. REITS, which were created in the ‘60s by US President Dwight Eisenhower, combine the finances of multiple investors to buy out different properties. This is done so investors can generate income from properties, without having to do the work of managing the property itself.
Due to the recession of the ‘90s, the federal government decreased its interventions from the housing sector, allowing private investors to buy large amounts of housing units in Canada. REITs began renovating housing units, driving up the property value significantly as well as the amount to rent the properties. A lot of landlords began benefiting from policies that made rent laws less strict. The “1991 Loophole” was a policy introduced in 1997, which omitted rent control on any houses built after 1991. The plan was to not place constraints on new developers looking to build more rental units, but this plan backfired as more units were not built, and instead the developers set the rent prices high. This loophole indicated how housing had shifted from being a necessity to becoming more of an investment during the ‘90s.
The shift in government policy, as well as the introduction of REITs — which have collectively over nine companies, generated $39 billion in capital — has indicated that the government does not view affordable housing as a priority. Instead, housing has become focused on providing actors such as REITs and landlords with assets. Shifting focus from providing housing for everyone to making it a hot commodity has had a long-term impact on many Canadians, one that’s increasingly worse today.
Steps forward
There are solutions to fixing the current housing affordability issue. With better government regulations, more stringent laws protecting tenants such as rent increase regulations, as well as not allowing private investors the ability to buy up so much of the housing sector, the government can provide many Canadians with better housing. The Canadian government has the solutions right in front of them, but they still allow greedy private investors to occupy such a large portion of the housing sector. This negligent decision has proved to be reckless — actively depriving many Canadians from access to affordable housing.
