The housing crisis in Canada continues to push full steam ahead. Despite a recent dip in prices and talk of a precipitous drop, Canadians are still dealing with untenable housing costs. The cooling of the pandemic price surge has done little other than to bring stratospheric costs back down to merely outrageous prepandemic levels. The challenge set by the crisis is worst in British Columbia and Ontario and particularly serious for those seeking affordable housing.
Last week, Prime Minister Justin Trudeau discussed plans to create 17,000 units, with a focus on affordable builds alongside $200 million for a rent-to-own scheme. Although the money for the projects was budgeted in 2021 and 2022, in the face of rising costs — and yet another Bank of Canada interest rate hike — the prime minister is focusing on affordability.
These new units, while welcome, are a drop in the bucket. In June, the Canada Mortgage and Housing Corporation (CMHC) noted that to restore affordability by 2030, the country would need 3.5 million new homes. That means Canada must reach a total of 22 million homes in the next eight or so years to hit the affordability mark. This assumes that the housing agency isn’t off the mark again and that number isn’t, or won’t become, higher. So far, the country is on track to hit roughly 19 million.
The CMHC defines “affordable” as 30 percent of household income. For many, there’s nothing affordable about this number, especially in cities such as Toronto, where the average one-bedroom apartment costs $1,446 a month, or metro Vancouver, where it recently hit $2,176 — and $2,498 in Vancouver itself. Purchase prices are astronomical too. Even with a “correction,” prices will remain out of reach for many, especially if the country falls — or is pushed — into a recession.
Affordable housing as it’s defined isn’t affordable, and there isn’t enough of it anyway. The CMHC itself notes that Canada routinely misses the affordability mark. Looking at purchasing prices, just over twenty years ago, it notes, a household in Ontario had to spend roughly 40 percent of its income to buy “an average house” in Ontario and 45 percent in British Columbia. As of 2021, that price had risen to 60 percent — and the housing-stock-to-population ratio isn’t keeping pace with affordability needs, especially in Ontario.
The affordable housing crunch is particularly felt by new Canadians. In July, Fawziah Rabiah-Mohammed, Abe Oudshoorn, Cindy Brown, and Luc Theriault wrote in the Conversation that while newcomers are central to Canada’s population growth, and therefore the workforce and economy, they face “rapidly escalating housing costs and low housing availability.” Such a scenario makes for “a lethal combination for newcomers.” Canada treats its immigration policy as economic policy first and foremost, with all the exploitation that comes with such an approach. This means that its newcomers are left even more in the lurch than their compatriots when it comes to one of the most fundamental human needs.
Low-income and disabled individuals face their own wretched housing struggle. Weak social support structures — including criminally low disability support program payments — make life next to impossible for those who must often choose between basics such as shelter and food. For instance, the Ontario Disability Support Program (ODSP) pays a maximum of $1,169 per month — a figure that has not risen since 2018 and is well behind what it would have been had there not been major cuts to the program in the 1990s. Advocates are calling for a doubling of the ODSP rate and the same for the province’s financial need-based work program, Ontario Works. Doug Ford’s government is not likely to listen.
The federal government plays a role in housing policy throughout the country, especially through spending, but provinces and cities are essential to better housing policy. As we cast a wary eye toward a postpandemic world down the road, each order of government ought to be looking at and implementing structural changes to housing that will ensure homes for all. Such reforms are likely to be products of intergovernmental cooperation and modeling across jurisdictional lines. Canadian federalism is messy. So too will be the major housing solutions the country needs, with leadership, and incentives, coming from wherever they may come from, including federal programs.
First and foremost, ending the financialization of the market is essential. Large buyers who scoop up stock and dominate an already tight market are a scourge. Treating the sector as an investment space instead of a space in which fundamental human needs are met facilitates exploitation.
Affordable housing won’t be achieved through the market and a profit model. As Canadian Centre for Policy Alternatives economist Marc Lee finds in the context of BC in 2021, “Comparing private for-profit with non-profit development: for-profit development leads to much higher rents, from 43 to 49 per cent higher rents for equivalent units or $600 to $1,300 per month.”
Lee makes the case for nonprofit development, arguing that scale and affordable building costs can be met if we adopt a different lens on what housing is, what it should do, and who should provide it. “Ultimately, we need to break away from a dominant mindset that sees private sector property developers as the primary builders of housing,” he writes. “Scaling up the non-profit development of non-market housing on public/community-owned land is the key to achieving the public goal of affordable housing over the long-term.” Lee is correct that nonmarket housing, such as co-ops and nonprofit development, is required. But the most powerful antidote to the crisis is social housing. We need social housing. Lots of it.
Rather than be lulled into complacency by the federal government’s announcements and reannouncements — the sort that get lots of attention but get us nowhere near where we need to be — we need to rethink housing in Canada. As the country stares down rising inflation, further rate hikes, supply chain issues, and an ongoing pandemic, it is well beyond time to rethink the housing question and commit to doing what it takes to reach housing for all. We need social housing now.