Canada Housing Crisis

            Over the two years ending in February 2022, the average house price in Canada increased by more than 51 percent, to 868,400 Canadian Dollars, according to the Canadian Real Estate Association. 

            In today’s Canada Letter in the New York Times, Ian Austen talks about Chrystia Freeland’s budget proposal to make housing more affordable. Specifically, he mentions the two-year block on most foreigners and non-Canadian companies from buying residential real estate in Canada. The effect of foreign buyers on house prices is not as significant as many people believe and this ruling could create some bad headaches of its own.  Many real estate purchases are made by residents or citizens of Canada acting on behalf of relatives or other people living overseas. What matters is not so much citizenship but rather the source of funds for real estate purchases, as Mr. Gordon an adjunct professor at SFU in Burnaby, pointed out. 

            This new rule will also run afoul of the Charter of Rights and Freedoms by discriminating against people on the basis of nationality and it also violates the U.S.-Canada-Mexico Trade Agreement” by discriminating against American and Mexican buyers.

            In light of all this fancy dancing by the Finance Minister I hereby reprint a couple of earlier posts, form 2018; conversations where Camp and I addressed the housing issue. 

13th June, 2018

            “You know Camp, we’re lucky to have a permanent roof over our heads, unlike the over 3’000 homeless people in Metro Vancouver.”

            Campbell or Camp for short was just putting away the local paper and Vicky arrived with two ice cold pints of happiness. “Yes, but luck should have nothing to do with shelter and health in our rich society,” Camp said, “the right to healthcare is universal but impossible to achieve without proper shelter and housing.”

            “Exactly,” I agreed. “The reason I bring this up is I came across a year-old report by the EU housing organisation Feantsa, which has found every country in the EU in the midst of a crisis of homelessness, with one exception: Finland.”

            “Really, so how has Finland done it?”

             “By giving homeless people permanent housing as soon as they become homeless, rather than muddling along with various services that may eventually result in an offer of accommodation,” I quoted from the article. “They enacted a policy called ‘Housing First’ dedicated to ending homelessness instead of managing it. With Housing First people do not have to earn their right to housing by proving their capability to manage their lives. Instead, they are provided with a stable home and individually tailored support.”

            “That sounds almost utopian and why can Finland do it but we cannot?”

            “That’s the multimillion-dollar question,” I said. “It’s quite simple really. They made Housing First a national homelessness policy, making it possible to establish a wide partnership of state authorities, local communities and non-governmental organisations.”

            “There must have been problems and opposition to this common sense but albeit radical approach?” Camp said.

            “Not really since the plan included concrete objectives and resources to meet them. However, some attitudes did have to change, I’m sure.”

            “But how does it work? It all sounds so simple?” Camp said.

            “From what I read the tenants pay rent and are entitled to housing benefits, depending on their income. The rest is covered by the municipalities or services they buy from NGO’s. It costs money for sure but there is plenty of evidence that shows it is more cost effective to end homelessness instead of trying to manage it, to say nothing of the human and ethical reasons.”

25th October, 2018

            “Camp, what do you think of the argument that all these Airbnb’s should be permanent rentals, instead of temporary holiday rentals?”

            Camp took a long swig from his cold beer and sat back in his chair.  This was going to be a long answer. “First of all, you can’t force people to rent out their extra apartments or rooms to people who can’t find affordable housing elsewhere,” he pontificated.  “You cannot roll off a communal and collective responsibility onto the shoulders of individuals. You can tax holiday rental income and put that money to work and you can limit the amount of Airbnb’s in specific communities and maybe even give out licenses but then you’ll have the big operators buying up all the licenses and leave the mom-and-pop operations out of the loop.”

            “There were always B&B’s and holiday rentals and house exchanges. I remember my parents renting somebody’s flat or farmhouse in the mountains for ski holidays. Cheap and affordable.  Nothing new about all that, except Airbnb has really cornered the market with their user friendly and peer reviewed platform. We use it all the time when we travel.”

            “It’s a shame how the real estate and housing market has managed to price people out of house and home,” Camp lamented, “and no developer, investor or speculator will solve the crisis. Not as long as the rules and laws turn the whole housing market into a casino where the highest bidder always wins and dirty money can be laundered in a simple real estate transaction. You do know that they call Vancouver a Casino, ready and willing to accept anybody’s money.”

            “I tell you how to solve the housing crisis,” I said, just after Vicky set down a couple of fresh pints for us. “Housing co-op’s that’s the way. It works in Switzerland and in Finland and it guarantees housing at stable, affordable rents without speculator landlords and realtors involved. Here is how it works: 100 people put in $ 5’000.- each and together they borrow 10 million from the bank or a government fund. First time buyers can get a grant or a subsidy, depending on income. For the next 25 years, the rent, tied to a fixed interest rate, pays off the initial loan. Now the co-op owns the buildings and the land and now the rent, which doesn’t fluctuate, pays for upgrades and renos. If you move you sell your initial share and that’s it.”

            “That sounds just too simple and perfect,” Camp said. “Why don’t our governments adopt this strategy? Everybody wins. The renters, the builders, the banks and the government.”

            “I have a suspicion that the developers which own the civic governments would viciously oppose this kind of socialist idea,” I said.  

            We both paused, took a drink and looked out at the pristine vista spreading out before us. 

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