A burning issue going into the 2021 federal elections is affordable housing. All three main political parties have incorporated the housing crisis into their campaign speeches but no party is offering a fundamental change from the status quo. Rather than the minor tweaks currently being promised to Canadians, the working class needs to fight for a revolutionary program where housing is organized for social need rather than profit.
Liberals promise a home for everyone… except the 99 per cent
Between July 2019 and July 2021, the average price of a house rose an astounding 32 per cent. A Canadian Centre for Policy Alternatives report found that a renter would need to make $27.74 per hour to be able to afford a one-bedroom apartment in Toronto. A minimum-wage worker would need to work 79 hours per week. With millions of Canadians losing their income in the pandemic, many have been pushed onto the streets. Even prior to the pandemic, it was estimated that 235,000 people in Canada experienced homelessness, with 35,000 without permanent shelter on any given night. In cities all across Canada, the pandemic has intensified the struggle for affordable housing.
The Liberal Party housing platform begins with an acknowledgement of those most hard hit by the housing crisis, from domestic violence victims to seniors. In typical Liberal fashion, they promise everything but the moon, titling their housing platform “A Home. For Everyone”. They are campaigning to build, preserve or repair 1.4 million homes. How many homes will be built? How many homes will be repaired? There is no clarity on these questions. Preserving affordable housing would simply mean maintaining the existing supply, which is already severely lagging behind demand. The average wait time for the existing supply of affordable housing is 13 years. Scandalously, the Liberals make no mention of affordable housing! So what type of housing will they be building?
The most costly portion of the Liberals housing plan is $4 billion for a Housing Accelerator Fund. This fund will supposedly “increase densification; speed-up approval times; tackle NIMBYism, establish inclusionary zoning bylaws; and encourage public transit-oriented development”. All of these strategies, from increasing densification to building homes around public transit ultimately translate into allowing faster construction of housing on valuable land. In their theory, concentrating housing in high demand areas with easy access to transit will be great. In practice, housing is monopolized by a few wealthy landlords and it is difficult to imagine that they will choose to build affordable housing units rather than use the value of the land and high demand to build lucrative condos and luxury housing. Additionally, the Liberals are also promising to allocate $600 million to convert empty office/retail space and federal land into market-based housing. More market-based housing means homes built for profit. This is just more of the same situation that has led to the current housing crisis. The Liberals are promising a home for everyone…who can pay $1.5 million.
The Liberal platform also includes a pledge for $1 billion towards a rent-to-own program. Liberals are advertising the program as a way to “help make it easier for renters to get on the path towards home ownership while renting”. The program will definitely help renters own homes…if they’re already rich. Under the program, renters typically pay a higher rent that partially goes towards a down payment. They will still have to provide a down payment, obtain a mortgage and pay the future (inflated) market price for the home. This is no easier than buying a home right now! The Liberals expect renters to save up enough money during their rent-to-own agreement to pay for the down payment and mortgage. Considering that working class people are already paying more than 50 per cent of their income on rent and wages are falling further behind rising living costs, most people will never be able to save up to buy a home. Rent-to-own does nothing to change the cost of buying a home. All it does is change the date you pay on. It’s a program for the minority of rich renters that could already buy a home without the program.
A number of additional promises by the Liberals fall into a “promise for the future” category. They promise to “work with municipalities to identify vacant or underused property that should be converted to housing”. And again: “work with Indigenous partners [note the deliberately vague term “partners”] to co-develop an Urban, Rural, and Northern Indigenous Housing Strategy to ensure more Indigenous people have access to safe and affordable housing, and will support this strategy with dedicated investments.” The Liberals also promise to “review the tax treatment of large corporate owners of residential properties”. These promises amount to committees now and little (more likely no) action later. These are promises to make promises.
When asked about the current situation and the legacy of his 2017 National Housing Strategy (NHS), Liberal Party leader Justin Trudeau responded that the NHS had “expand[ed] the pool of affordable housing for thousands of people and cut down on chronic homelessness”. However, a 2019 review by the Parliamentary Budget Office revealed that the housing strategy had not resulted in any new affordable housing construction. In fact, only half the funds allocated to housing construction were spent. Considering the current crisis, Trudeau’s remarks only expose how drastically out of touch he is with reality.
While Trudeau is quick to shift the blame onto the Conservatives for the housing crisis, the roots of the crisis start from the Liberal Party itself. Starting in the 1990s under Jean Chrètien and continuing into the 2000s with Paul Martin, the Liberals’ federal support for housing was drastically cut. and Policy Options magazine noted that the effects of these cuts were never reversed. The real legacy of the Liberals is the 13-year waitlist for affordable housing and working class people being reduced to living out of their cars. The working class cannot trust the Liberals to solve the housing crisis that the party has only worsened.
Conservatives propose more capitalism
The Conservative Party’s solution is to give more land and financial incentives to landlords. They promise to have one million homes built in three years by allowing property developers to defer taxes and access more federally owned land. This is based on the idea that the housing crisis is caused by supply lagging behind demand. While there is certainly a shortage of affordable housing, there is no lack of housing in general. According to the Financial Post, “total residential construction has surged 22.5 per cent in the past year and that has taken the housing share of GDP to a record high of 9.3 per cent—double the historical norm”. A report from 2019 estimates there were 1.34 million empty and temporarily occupied homes across Canada. In Vancouver, it’s been estimated that roughly one unit of housing was built for every person in 2016. In Toronto, 186,094 condo units were constructed between 2002 and 2018; with nearly 65,000 remaining empty. If wealthy landlords are incentivized to build one million homes, it is doubtful that they will use their funds to build less profitable affordable housing instead of luxury condos.
The Conservatives plan to tackle affordability “by creating an incentive for corporations and private landowners to donate property to land trusts for the development of affordable housing”. The incentives will be tax benefits to the wealthy for donating land to land trusts, which will then hopefully be used for affordable housing. Land trusts are not-for-profit corporations that manage land for “community use”. There is a Parkdale Neighbourhood Land Trust that is meant to oversee housing to the local community. Unfortunately, they have done nothing to stop the rising rental costs, evictions and bad quality of housing in the Parkdale neighbourhood. The Conservatives effectively have no promise for affordable housing.
Aside from giving cash to landlords, the Conservatives’ solution to the housing affordability crisis is credit. They promise to “increase the limit on eligibility for mortgage insurance”, reduce mortgage stress tests and “encourage a new market in seven to ten year mortgages”. These promises could make it easier for Canadians to take out mortgages but they would still be paying for extremely overpriced housing. In fact, they would be adding demand for overpriced housing. This will only exacerbate the current crisis while pushing the working class deeper into mortgage debts that they may not be able to pay off in the long term as wages consistently fall behind living costs.
The Conservatives’ plan is a combination of amping up free market mechanisms plus government handouts to property developer capitalists. This disastrous combination will do nothing but worsen the rising cost of housing.
NDP illusions in market-based solutions
The NDP is promising to build half a million “quality, affordable” homes in the next 10 years with 250,000 units promised in the next five years. But what is “affordable housing”? Affordable housing is defined as housing that is at or below the average market rent. The average market rent for a one-bedroom in Vancouver this month is over $2,000. This is a 12 per cent increase compared to this time last year. Meanwhile, the minimum wage workers earn $15.20/hour; a 60-cent increase since last year. Across the country, average market rent has increased by 20 per cent while household income has only increased by five per cent. “Affordable” housing is anything but. Instead of (un)affordable housing, the NDP must put forward a plan for social housing that is geared to income.
When the NDP platform does mention social housing, they say they will “set up dedicated fast-start funds to streamline the application process in order to kick-start the construction of co-ops, social and non-profit housing”. So there will potentially be some support to figure out what form to fill out, but zero funding to actually build social housing! The NDP should be boldly campaigning for publicly owned and built social housing. That is the only way to address the desperate social need for housing and to provide good union jobs for youth to build homes for their communities.
The NDP platform also falls far short of the real demand for social housing. Toronto alone needs an estimated 400,000 additional units, a conservative estimate given how many people are struggling to pay for their “affordable” rental units. Half a million homes in reality would barely provide for one city. What about Calgary? Vancouver? Montreal?
To meet the real demand also raises the question of how the NDP would fund an adequate supply of social housing. The City of Toronto has projected 400,000 homes will cost $6.4 billion in capital costs and $300 million in ongoing annual operating costs. Similar needs and costs would apply to cities across Canada. Where will the NDP find these funds? They have proposed to “increase the number of affordable homes by waiving the federal portion of the GST/HST on construction of new affordable rental units”. Considering that housing is monopolized by private developers, who will benefit from this tax break? Landlords! The NDP is offering handouts to the landlords! All in exchange for (un)affordable housing. Ironically, this tax break may not even be enough to entice landlords. They would likely make far more profit simply continuing to flood the market with luxury condos. There is seemingly no cost breakdown and funding plan in the NDP platform for social or even affordable housing.
A positive point on the NDP platform is a $5,000 rental relief program for families. However, similar to their other promises, this will barely make a dent in resolving the housing crisis families are facing. The average rent for a single family home in Toronto is more than $2,000 a month. The NDP rental relief will cover barely 10-15 per cent of the housing costs for working class families over the year. This is hardly enough.
Unfortunately, the NDP proposals for ending the housing crisis are hardly different from the Liberal and Conservative platforms. The NDP has an opportunity to provide an alternative; however, this requires that they break away from market-based solutions that incentivize the wealthy and worsen the crisis.
Speculation is a capitalist problem
Disappointingly, the NDP has joined the chorus of Liberals and Conservatives in blaming the crisis on foreign buyers. All three party platforms include taxes on foreign buyers to curb speculation. These sorts of taxes are nothing new. In British Columbia, the previous Liberal government introduced a 15 per cent tax on foreign buyers. The effect was negligible with the average Metro Vancouver house still selling for $1.5 million. The Canada Mortgage and Housing Corporation has pointed out that there is a “whole lot more domestic investment activity in the real estate sector than foreign investment activity”.
Speculation—buying property with the intent to sell it at a higher price—is certainly the cause of the current crisis in unaffordable housing. However, speculation is present in a variety of markets all across the world, from raw materials to electronic hardware to housing. It is clear that speculation is not a “foreign buyers” problem. It is a capitalist problem.
During the pandemic, the real economy has seen a huge slump in activity of five to six per cent and real wages have plummeted. Corporations have received billions from the Liberal government and this wealth is either wasting away uninvested or being used in speculation. The amount of money unproductively hoarded in corporate bank accounts increased by more than $500 billion. Why is this wealth not being invested into creating jobs and goods society desperately needs?
This was explained by Karl Marx as the organic crisis of overproduction. With the working class unable to buy back all the goods they themselves produce, the capitalist cannot make as much profit through production. There is little incentive for capitalists to invest in improving the means of production nowadays because they already cannot sell the vast ocean of commodities that saturate the market. This means that capitalism has little interest in advancing society or solving important social issues, because doing so would earn the capitalists no profits. So what do they do with their amassed wealth instead? They gamble on the market, creating bubbles as with housing. Or they hoard wealth until a profitable opportunity arises. Speculation is a symptom of capitalism in decay.
Housing for social need, not profit
The Advocacy Centre for Tenants Ontario accurately summed up the crisis in saying, “we can’t wait for the private sector to decide whether they will build the affordable housing we need.” This is absolutely correct. Housing is a basic human need that a profit-driven system, capitalism, cannot meet. While housing remains monopolized by capitalists, they will use the demand for housing to extract as much profit as possible. The actual cost of building and maintaining housing is minimal. Exorbitant rents are a product of landlords controlling the distribution of housing for the sake of their profits.
We need social housing that is geared to income and covers basic maintenance. Through the expropriation of landlords, we could fund a mass social housing campaign that would put housing under public ownership and out of the speculative market. In this way, housing costs could be capped at 10 per cent of the average household income. There is currently $1.58 trillion sitting in the vaults of the big banks doing nothing but collecting dust. This money could easily fund a social housing campaign that would include the training and hiring of the unemployed for good union jobs at living wages.
Friedrich Engels wrote at length on the housing question and explained it this way: “It is not that the solution of the housing question simultaneously solves the social question, but that only by the solution of the social question, that is, by the abolition of the capitalist mode of production, is the solution of the housing question made possible.” Under capitalism, housing is a commodity that is monopolized by landlords and banks. Rather than being built and maintained for social needs, housing availability is driven by the need for profit. The fight for affordable housing is a fight for socialism.
