Canada’s housing crisis is deepening. While each party pretends to want to do something about it — and while some, perhaps, earnestly wish to do so — taking sufficient measures to secure affordable homes is another matter. Most recently, Justin Trudeau’s new housing minister, Sean Fraser, has committed to continuing the long and rich Liberal tradition of sucking and blowing at the same time.
Last week, Fraser told Bloomberg News that the government’s goal on housing was not to decrease the value of anyone’s home. This statement was surprising to no one. In a country where housing equity is often seen as a retirement strategy, and where wages haven’t matched productivity or inflation, no politician in their right mind is going to step up to a microphone and say that they’ll reduce home values for the sake of affordable housing.
To be charitable, Fraser’s argument may not be as contradictory as it seems. “Our goal is to build more units that are at a price that other people, who don’t currently have their needs met, can afford,” he told Bloomberg. The premise of this plan is that a government can, through targeted incentives — or, in theory, through directives or state building programs — create certain kinds of stock that will ease price pressure for some types of housing without devaluing other types. After all, what does the value of a $1.6-million-dollar downtown home have to do with a $600,000 suburban bungalow? And what does the price of single-family homes have to do with purpose-built rentals? Well, a few things.
For one, in the absence of market controls, developers will build whatever nets them the most money. For another, families will shop around, wait, make concessions, and engage in bidding wars for different types of housing. Demand fluctuates, influencing searches and creating pressures across the housing market. As assistant professor of economics at the University of Toronto Rob Gillezeau put it on Twitter regarding Fraser’s have-it-both-ways play, “if he genuinely thinks that government could somehow reduce the market price of additional units of housing without shifting the value of existing housing stock . . . that would raise some serious concerns about basic policy competency.”
The issue of housing in Canada, as it progressively worsens, can’t be written off by parties as just a regular policy file. Housing, as a fundamental human need, it too easily gatekept by NIMBYs, ignored by governments, and exploited by the market and investors in ways that do real harm to so many people. However, the founding director of the PLACE Center, Mike Moffat, nevertheless believes that elements of Fraser’s seemingly boilerplate strategy might be viable. He also took to Twitter to discuss the plan, noting that, pending polling results, certain sections of the public would generally support policies that would reduce some prices without affecting their own (“the value of their 4 bedroom home in Oakville,” as he puts it). Those palatable measures are ones that promise significant increases in rental apartment, small starter homes, and senior housing builds. In theory, a savvy government might thus be able to sell the idea that they can get more people into affordable homes without tanking equity across the board.
Reducing home values doesn’t necessarily entail drastic drops in selling prices, which could leave middle-class homeowners destitute. The rate of price growth for specific home types can be moderated while actively increasing other types of housing to achieve long-term market and price equilibrium. This, of course, requires a substantial increase in housing development, focusing on the right kinds of homes. It also necessitates collaborative efforts among various levels of government — municipal, provincial, federal — to prioritize the construction of nonmarket and purpose-built rental units, ideally in densely populated, walkable neighborhoods. Left to their own devices, developers, NIMBYs, and captured local governments will fail Canadians on housing ten times out of ten.
Mass construction of new types of housing tailor-made to meet demand will ease prices. Alongside a surge in public housing development, however, comes the question of which price changes would occur and to what extent. But this empirical matter takes a backseat to a moral imperative. Shelter is an essential human need and moral right. It ought to be a political right, too. While the government’s ability to enhance affordability for certain individuals without diminishing it for others might be debated, the primary focus must be on guaranteeing safe and reasonably priced housing for every person residing in Canada.
Trailing the polls to the Conservatives and staring down an election within the next two years, the Liberal government has no choice but to do something big on housing. Justin Trudeau recently claimed that housing wasn’t a “primary federal responsibility.” It’s a comment that smacks of weariness and disconnect. As Aaron Wherry argued for CBC, while Trudeau is technically correct — housing is a matter of shared jurisdiction with provinces and municipalities — it is still very much his problem. The federal government has plenty of power over housing, including spending power, moral suasion, and convening capacity. So housing is a primary federal concern, and if the Liberals can’t accept that, they won’t be governing for long.
The best hope Liberals have now is that they use their powers to induce other orders of government to build the kinds of homes people need, particularly nonmarket and purpose-built rental stock. They must aim to alleviate prices where needed, while also addressing challenges that come from or are exacerbated by domestic population growth, immigration, urbanization, and speculation. Homes must be accessible to both homeowners and renters who are excluded from the market or at risk of homelessness. What ultimately matters most now is ensuring housing for everyone across the country and across income brackets. Housing is a fundamental human need, and it ought to be a fundamental human right, too.