Our Housing Crisis is not Going Away
If our society is to be great, it has to work for everyone.
The provision of suitable housing that meets the needs of owners and tenants alike is essential. Yet there is an ever growing shortage of affordable housing. Governments, community groups, professions – in short, everyone – recognizes this gap in our basic need. But filling that gap is an expensive proposition. Perhaps too great for any government.
A current philosophy known as Neoliberalism holds that the state’s influence in the economy should focus on privatization and austerity. According to this thinking, the government’s role in income re-distribution should be replaced by market-oriented reform policies. Some of these policies play a direct role in housing supply.
But neoliberal policy is not able to create new affordable rental housing, because private money is not really interested, and the scarcity of housing means that developers can charge whatever they want and people that can pay will pay. And those at the bottom of the heap are fighting to subsist on the scraps. In 2015, according to the Canada Mortgage and Housing Corporation, 37,000 new rental apartments were built in Canada, however, in the same year, the net demand increased by 50,000 units.
The over-privatisation of the housing market has resulted in an increase of a unit’s price at the same time as it has restricted the affordable housing supply chain. In Toronto for example, an individual must earn approximately 23 dollars an hour to afford a living space. To sustain an average household, multiple income sources are required, at a time that the many people work for minimum wage, or are forced into multiple contract jobs with zero benefits.
With no money for social housing and only limited incentive for private developers to build affordable housing, the majority of people are forced to move farther out from the core, relegated to density pockets in the suburbs where transit has not yet reached. Those with average income cannot afford vehicles that are deemed environmentally bad anyway. But cars are still needed despite the affordability problems, while planning rules have made minimum parking requirements obsolete. This makes the scarcity of parking another profit source and another impediment to affordability. Policies that focus on making developments more intensive on the few remaining green field sites have reduced the liveability of an average household, while giving the remaining land-rich individuals greater profits from building the scarce resource that is housing.
Another major problem is that we need to grow our population to remain viable as a country. Population growth in the ‘50s and ‘60s was accomplished thanks to traditional families and the baby boom. This was accompanied by a parallel movement from rural areas to urban centres, in search of better jobs, community services and better health care – a trend that was spread across generations, while financial choices resulted in the reduction of family size. The gradual reduction in birth rates plus longer life expectancy, in turn, meant our population began to age and shrink. We have attempted to counter these trends by encouraging population growth through immigration. One result of this policy has been a renewed urban growth.
Our cities are changing and densifying in ways that disadvantage the average wage earner. The growth of knowledge companies and the enticement of off-shore investment has created a new condo market that has encouraged rich people to invest in the economy, and has made a few individuals wealthy. The unintended consequence of this shift in focus has been a tipping of the balance of our communities. With private companies turning their attention to building prestige units for the top-of-the-market knowledge workers, who can afford to buy condos or to grossly upsize existing bungalows.
And yet, repurposing old-style industrial land to accommodate the knowledge economy generates another imbalance: the very people who service the city are the first to have to move out of the urban core as a result of the increased cost. The bright new postcard view of a city comes at the expense of the vulnerable and the struggling. If our solution to the problem is to be through private companies, then with wealth comes privilege.
Furthermore, this growth in urban density required by new planning rules further fuels the development of nodes surrounding the city. These nodes are touted as balanced mixed-use centres, but they are neither big enough to support the shops and services that make life easy, nor dispersed enough to allow the growth of sustainable family life. Affordable rental housing should give way to affordable home ownership where people can raise families and maintain a quality of life into old age.
An unintended consequence of our simple off-balance economic train of thought is that while demand is rising due to immigration, the supply for affordable housing is decreasing. It may be more appropriate to say market economics has moved to making money for a few while disadvantaging many, and creating a community imbalance in the process.
Now, the pandemic has turned everything on its head. Many people are suffering from reduced incomes, unemployment and homelessness. Some choose, or are forced, to work from home. Lack of consistent child care, schooling and cultural outlets will not be remedied soon, and everyday life may never return to pre-pandemic standards. With those considerations at the top of everyone’s minds, how do we find the time and energy to think about rising housing costs?
The choice not to fill the affordable housing gap will create problems that are even more acute as a result of the financial burden left by the pandemic. One could argue that government funding to build sustainable housing within our existing cities would be one viable response to getting our economy moving again. Rather, all levels of government feel smugly satisfied that, because the horizon is filled with construction cranes, something is being done.
Can we continue to rely almost totally on the actions of an individuals or a private companies, motivated by profit to fill an increasingly stratified housing need where luxury demand goes up while the affordable vacancy rate falls? If our society is to be great, it has to work for everyone.