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Daniel Blaikie, NDP MP for Elmwood-Transcona and son of former NDP stalwart Bill Blaikie, has become something of an online celebrity in recent weeks. In a House of Commons speech that went viral, he lashed out at Conservative Party of Canada Leader Pierre Poilievre’s housing message, one that predictably lays all the blame for Canada’s dangerously overheated market at the feet of the Trudeau Liberals.
Instead, he argued, much of the pain felt by renters, immigrants and young Canadians is the result of the failure — one shared by both Conservative and Liberal governments — to build affordable government housing the way we did in the 1970s and 1980s. “Housing prices in Canada have been doubling for a long time,” Blaikie said. “They doubled every few years under the last Harper Conservative government. So don’t tell me that this is a product just of the last little while. It’s a problem, and it’s a growing problem. But it’s been growing for a long time.”
He’s right. The failure of government to build affordable housing isn’t the only reason why house prices in this country have shot through the roof over the last two decades. Interest rates that only seemed to keep going down and immigration levels that boosted demand for housing were also key drivers. But the decision by the Chrétien Liberals to get out of the business of government housing, and the refusal of the Harper Conservatives to get back into it, has resulted in an approximately 500,000-unit shortfall of affordable housing. As Blaikie noted, if you multiply the 15,000 to 20,000 units the federal government used to build every year by the 25 years that have passed since the Chrétien government cut funding for them, that adds up to … well, approximately 500,000 units.
Building more affordable housing is a key part of any strategy to bring some sort of sanity back to our housing markets, and it’s one a Poilievre government would almost certainly avoid. Another key part is more market-oriented housing, which the NDP and people like Blaikie sound far less unenthusiastic about. But the beating heart of any successful housing strategy in this country involves going after the biggest enemy in all this: our own behaviour.
As cartoonist Walt Kelly famously observed in 1970, “We have met the enemy and he is us.” So it is for housing in Canada, where politicians on both sides of the House of Commons talk a good game about affordability and opportunity and then fall over themselves to prop up the existing system — and pour rocket fuel into its engines as required. The Harper Conservatives did this when they laid the groundwork in their 2006 budget for the spread of zero-down, 40-year mortgages — the same volatile financial cocktail that nearly blew up the U.S. banking system a few years later. The Trudeau Liberals have done it through new tax incentives for homebuyers and shared equity programs backstopped by the Canadian Mortgage and Housing Corporation, including a new tax-free savings account for first-time buyers. And make no mistake: if the federal NDP was ever to form government, they’d probably do it, too.
But all of these demand-side supports are simply adding fuel to a raging fire, one that’s already singed the lives of millions of young and new Canadians. We’re even worse when it comes to the supply side of the picture. Witness the outbursts of NIMBYism that inevitably greet any attempt to add density in established neighbourhoods, regardless of its merits or the impact it might have on affordability. The latest ludicrous outburst occurred in Stouffville, Ont., where a proposed townhouse development — townhouses! — along the community’s Main Street was met with the usual complaints from existing residents. They even posed for the stereotypical “older homeowners with arms crossed” photo, either because they are unaware of the trope they’re perpetuating or because they simply don‘t care.
There’s been some progress on this front in places like Vancouver and Toronto, where the politics have become so glaringly obvious that even the most tone-deaf elected official can read the room. But even there, it’s been the result of hundreds — or heck, maybe thousands — of small battles, each one exacting its own toll and taking its own extra time. The truth of the matter, when it comes right down to it, is that most homeowners don’t want housing to be more affordable if it means the value of their property has to go down in the process, or that more people are going to move into their neighbourhood. And that, of course, is exactly what has to happen.
Don’t even get me started about the idea of taxing some portion of the capital gains in our homes, a policy that would help take some speculative activity out of the market and reduce upward pressure on prices. As Generation Squeeze has written repeatedly (and backstopped with public opinion research), there’s a good case for taxing homes worth more than a million dollars, and doing it in a way that protects seniors or other existing homeowners who didn’t do anything other than be in the right place for a long time. But unless younger voters coalesce around this issue in a way that’s never happened before, it’s a case that leaders from our major political parties will never make.
The real problem, in other words, is us. It’s tempting to think we can solve the housing crisis by doing things that only affect other people or electing a government that will push some magic button in its midst. But until we confront our own attitudes, biases and behaviour here, we’re never going to do more than just tinker at the edges. And maybe, just maybe, that’s how a lot of people would prefer it.
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Comments
Max, it can't *POSSIBLY* be a coincidence that today marks the exact 1-year anniversary of the best Jen Gerson column ever published at TheLine, still on their main page:
https://theline.substack.com/p/jen-gerson-no-one-is-going-to-fix
...which expressed similar points. Good of you to keep those points in discussion, we've all got to just lean on it. How about an expensive-homes tax that doesn't affect seniors until they die? Just suck the money from the estate, the kids did nothing to earn it, not even live in one place a long time.
Instead of subsidizing mortgages, why not budget the same amount to just build affordable housing, and sell it at a slight loss? Between the fact that builders don't like the "affordable" niche (lower profits) and a willingness to lose 4% rather than make 6%, it should greatly increase the "affordable" supply. If it's spending-neutral, what would the complaint be?
Wait a blessed moment here.
I'm disgusted by the tone of the entire piece: it's even worse than middle-aged "kids" plotting to put their folks in old folks' homes.
You might want to ask yourself about the $30K that's handed as a gift to purchasers of "investment" homes for the purpose of renting them out. They also "do nothing" ... but rake in rent for positive cash-flow, and sit back waiting for property values to rise. Then when the equity's such that they can use the proceeds as a down payment, they sell that one, and buy two more.
First came the condos, and all the built-for-rental apartments became unavailable to renters.
Then came the end of the Foreign Investment Tax, and the end of majority-Canadian-owned real estate.
Call it setting the stage for globalization, before any of us had heard the word. But mainly it made houses and apartments both rife for "foreign investors." They expected a tidy cash-flow, too.
They "did nothing" to earn that.
That is where the problem really got going. And nothing will be done about that, because it's a popular way for councillors, MPPs and MPs to "invest."
Millennial owners aren't hard done by, either: and they've not lived long enough to be able to distinguish between hype and truth.
During the first decade after we purchased, property prices escalated considerably, right along with mortgage rates. And then, faster than they'd escalated, the market crashed, and anyone forced to sell at that time would have come away with a loss, as property values plummeted back to where they had been 10 years earlier.
Unfortunately, grown-up middle-class kids expected to have what they want, when they want it, just as they did when they were little, and don't expect to do without, or save over a long time. At the same time as the "seniors" with income are paying for the costs of raising their kids. The "child benefits" available when ours were little were on the order of $12-15/month.
So enough already with the grumpy whiners who *aren't* homeless (and likely never will be),
Tall apartment towers are bad for the environment, bad for kids, bad for pets, and very bad to live in during a pandemic.
Anyone who thinks not ... well, there are new tall condo towers going up all around the city. How about one of those for those advocating theft of old people's property.
I was, I must admit, sorely tempted to make this post very, very short, by repeating Dennis Kucinich's most famous quote.
I have to admit I'm a bit astounded that NO publishes these hate screeds against seniors. And I have to wonder if they were all born orphans, raised by nobody, with no grandparents either.
(PS: renters have rights now: not so much when I was one.)
Max has missed the most glaringly obvious contribution to our current housing nightmare: individual investors, hedge funds and corporations own over 30% of the nation’s housing. Unfortunately, housing has gone from being a place to call home to an investment opportunity for far too many people in our country, and many other countries too. Too many homes owned by investors means that there are a lot fewer available for first time buyers and others looking to own a home. This pushes home prices ever higher and further exacerbates the problem.
In essence, greed is driving the skyrocketing increase in housing prices, although of course it’s not the only reason for the current situation, but it is certainly a major contributing factor. Legislation recently brought in by the federal government in an attempt to curb foreign ownership of housing is ineffective, grossly inadequate, is full of loopholes and doesn’t go nearly far enough; basically it’s a joke.
Foreign ownership of housing units in Canada should be prohibited; a particularly egregious affront to BC residents was the foreign ownership of one of the most expensive houses in the province by a student with no visible income and making no contributions to tax revenue. Canadian housing should be reserved for Canadian citizens not foreigners entities be they individual or corporate. If you want to own a housing unit in this country and you’re a foreigner, you need to wait five years and then take out Canadian citizenship.
Coupled with the foreign ownership issue are the negative effects of money laundering, especially in BC and Ontario. Again, the federal government has seriously dropped the ball on this issue apparently not wanting to ruffle anyone’s feathers. Billions of laundered dollars entering the real estate market also can’t help but contribute to the high cost of Canadian housing. There needs to be a very serious frontal attack on this illegal activity by both the federal and provincial governments. Seize any housing units that are proven to be purchased with illegal, laundered money and build affordable housing with the proceeds.
My suggestion to address the issue of investors owning a large share of housing in Canada is to bring in legislation that limits individual Canadian citizens to the ownership of two units of housing, including vacation homes. Coupled with a possible additional tax on houses over a million or a million and a half in value, these measures would at least start to address this major factor in our country’s housing crisis. However, I won’t hold out much hope for this suggestion as predatory capitalism is a hallmark of this country’s economic underpinnings. Maybe as housing becomes ever more costly and unaffordable; when more people are homeless and many more struggle to pay their mortgages and rent; maybe then the people of this country will demand that governments bring in such measures.
Another major factor contributing to the current housing crisis is the federal government’s current quota for immigration. Yes, immigration is essential, but surely the current numbers are not sustainable given the lack of housing for the current population never mind the additional 450,000 to 500,000 immigrants expected to arrive in Canada each year for the next five years. Housing construction in Canada is at an all time high with the construction trades working flat out. Consequently , it would be prudent to lower the immigration quota until there is adequate housing for all of us already here, including immigrants.
Lastly, we need to start building smaller housing units that incorporate features like passive solar design, increased insulation requirements, solar panels and wind turbines in appropriate locations and more energy efficiency overall. The scourge of the “McMansion Syndrome” means that far too many construction materials, far too much labour, and far too much land is being used to build housing that satisfies someone’s desire for ego gratification. Think about how many smaller but entirely adequate, functional, and better designed buildings could be built with the same amount of resources. This necessary change in attitude and style of construction would also help address the climate crisis that will only get worse in the coming decades. Start building smarter and smaller and we will more proactively address these two issues at the same time.
All good points; the McMansion syndrome is huge, and I've never understood why the building codes can't be upgraded for energy efficiency.
Here in Alberta only Jayman Homes offers solar panels, better insulation, HRV, better insulation and windows I think as standard on all their homes.
You have hit the nail, squarely on the head in addition to Max's points. In Ontario, our failing Premier Doug Ford's plan to rape and pillage the Greenbelt under the guise of affordable housing is the biggest scam going. You can guarantee that ZERO affordable homes will be built, just the continuation of the “McMansion Syndrome” for the top 10%.
Our governments are only interested in filling the pork barrels of their corrupt donors and the developers have no interest in producing Net-Zero homes. The building code and regulations will continue as it is full of loopholes to keep the developers happy and maximize their profits.
I'd just like to ask folks, a little late, for some temperance in their antagonistic comments. The fight is not amongst ourselves, nor is (all) the blame, Max's assertion notwithstanding. Aside from buying into the myths of free trade and other attributes of investor-first globalization, starting with Mulroney (following the Reagan/Thatcher pas de deux) and continued since by every federal gov't. Not to mention provincial gov'ts, such as the 80s BC SoCreds, for one early example but now the norm.
In my opinion.
This is the continuing neoliberal experiment. Financial capital is given more and more global mobility. Buy (and sell) anything, anywhere, any time, with minimal gov't hindrance or oversight. Individuals are expected to look out for themselves, particularly in retirement; massive increases in real estate value support that, until they can't possibly, any longer. The notions and distinctions of state and society are minimized. Anything not bolted down is commodified. The benefits of citizenship in a place like Canada (or the USA, more saliently) drift slowly away, as do the historical, "we're in this together" ties that bind societies together.
All this occurring in the context of (resulting in) a suite of ecological problems, any of which can do us in, regionally and/or globally.
Again, in my opinion.
There are copious intelligent books on the subject(s), at various levels of granularity and abstraction.
Individuals are not the problem, beyond blind acceptance of the bill of goods we've been sold and falling into the trap of demonizing their fellow citizens.
Undoubtedly, others will have opposing views, and may believe history is correctly being written.