Housing affordability has become a pressing issue in Niagara and throughout the rest of Canada in recent years. As home ownership continues to become more and more unattainable for young people and families, it will likely only increase in prevalence and mainstream media attention going forward.
But why the focus on housing? Affordability is an issue in virtually every aspect of life; as the cost of living rises every year at a rate higher than people’s wages, life gets more expensive. The thing that sets housing apart from the rising price of things like smart phones is that a lot of people think of housing as a commodity, something to be bought and sold, for a profit. However, according to international law, housing is supposed to be a human right first and foremost, guaranteed to all. What we see throughout Canada and throughout the world for that matter, is that it largely isn’t treated that way.
We can see this in various ways, including when we look at the cost of owning a home. According to the Bank of Canada, the average home price in 1985 was just over $100,000, while today, it is nearly $600,000, a 419 per cent increase. Meanwhile, the average family income only grew by 133 per cent, from $31,965 to $74,366 respectively. This middle-class income stagnation, coupled with the decreased required down payment and lower interest rates on homes since 1985, has made it easier for the wealthy to buy multiple properties, driving up prices and making it more difficult for families to buy their first home.
The situation is worse for those struggling with rent. According to the Canadian Rental Housing Index, the poorest renters in the Niagara Region spend on average 62 per cent of their annual income on rent alone. It gets worse for poor families, who have to spend upwards of 70 per cent of their income on housing, with some even having to spend 98 per cent! Based on their statistics, over half of all renters in Niagara face rent prices that are considered unaffordable, or are over 30 per cent of their income. These renters aren’t concerned with flipping homes or buying a new rental property. Housing is a major burden for them, one that ties up massive portions of their income month to month, clearly an ever present burden.
The issue doesn’t show signs of stopping either. In January 2019 rent prices increased across the country at an average of nearly one per cent, the highest monthly increase in 30 years. While on paper, that increase might sound small, but think about it in context. A 12 per cent increase in rent over a year, compared to the average salary increase in Canada of 2.8 per cent according to Benefits Canada, means that lower income workers would be left behind.
A 2.8 per cent raise is also fairly unrealistic if you ask me. When I worked in retail for three years, I only ever got a single raise (and it was only a fraction of 1 per cent). Non salary, part time and precarious workers in general are far less likely to receive raises and when they do get them, they often are less than 1 per cent. With the average cost of living increasing by 2.4 per cent annually, that means that every year that you work for the same wage as the year before, you are actually working for less money.
That is why thinking of housing as a commodity can be so problematic. People aren’t consumers when they are looking for a place to live in the same way as they are when buying a new TV. The need to find somewhere to live means that it takes priority in people’s personal budgets, so that’s why measuring the proportion of income spent on rent is so important and telling. As it is a need (hence why many consider it a human right) it can’t be taken out of your budget. So for those with stagnant or declining wages, generally the poorest and lowest paid working people, it will simply become a larger and larger portion of their budget.
For those who can no longer afford endless rent increase, they end up joining the the 200,000+ Canadians who experience homelessness each year. Homelessness is another huge issue in and of itself, one that I will largely save for another day, but for the purpose of this article, it’s another symptom of commodity-based housing that is completely reprehensible and frankly, counterproductive. Beyond the large human cost of homelessness on those who experience it, that which can’t be measured financially, it also is a major drain on the economy.
According to the Canadian Encyclopedia, homelessness costs the Canadian economy $7 billion annually. Every $1 spent on housing for the homeless generates $2.17 in savings. So why don’t we invest in social housing for those in need? Because of the prevailing idea in society that housing is to be bought and sold, that it’s a commodity and not a right. As the data shows, this type of thinking is costly and counterproductive. If we looked only at the facts, we would be committed to ending homelessness for the cost savings. That’s why social ideas and norms like this are so dangerous, they’re based in feelings and the desire to protect profits, instead of in the facts and what would be best for our society.
So what would ‘housing as a human right’ look like in practice? How can we address homeless and affordability to ensure everyone can live comfortably and affordably? There are a few solutions that have been tried, both here and around the world, that seem to guide the way forward.
In 2017, the Liberal government in Ontario introduced a 15 per cent foreign home buyers tax for non-residents, those who simply purchase homes for the real estate investment, which largely happens in the GTA and Ottawa-areas. This has generated a lot of revenues and has actually reduced foreign home purchases by 22 per cent.
However, in 2018 in New Zealand, they took this idea a step forward buy banning the sale of homes to foreign speculators. Since then, the sale of homes to Chinese foreign buyers was down 80 per cent, and the percentage of foreign home purchases fell from 3.3 per cent of the entire New Zealand housing market to just 0.3 per cent, as some foreigners were exempted from the ban. This caused housing prices to rise only 1.5 per cent in 2018, a steep decline from 13.85 per cent in 2016, showing how effective a full ban could be in Canada, where the rate is similarly at 3.3 per cent currently.
While banning foreign home purchases is important, the number of properties owned by citizens is where the bulk of the problem lies. There are many ways that have been proposed to do this, like establishing a system similar to that of car insurance, where you can only insure two cars under one name. This leaves a lot of room for loop holes, like registering a property under a business or a family member’s name and so on. Some have suggested a tax similar to the foreign buyers tax in Ontario, but instead levying it on those with multiple properties, another interesting idea that would likely lower multiple home ownership in individuals, but doesn’t tackle big real estate owners.
The most effective solution to this issue that I’ve seen was introduced in Berlin a while ago. The city council held a referendum to ban big landlords and to nationalize or have the government take ownership of the homes they owned, making them social housing. In Berlin they defined ‘big landlords’ as those who owned more than 3,000 homes, though clearly that number and the definition would have to be changed. This type of bold policy response gets to the heart of the issue, as it addresses the affordability crisis and the homelessness issue head on by using the power of the government to advocate for the marginalized and oppressed against the rich and powerful.
This seems to me to be the only true way to ensure that housing is a human right and not a commodity. De-commodifying housing is something that we need to do for the sake of everyone who can’t afford a home, for people who are struggling to afford rent, for the homeless and for the health and longevity of our society.