The housing crisis that we allowed to happen

Hey there, time traveller!
This article was published 13/09/2024 (404 days ago), so information in it may no longer be current.

Housing is a constant topic these days, with editorials and half-backed new measures to try and “fix” the housing dilemma facing so many Canadians. The underlying assumption about all the housing angst these days is that somehow, “the housing market is not working right now and we have to try and fix it”.

What if the market is actually working exactly the way past decisions have made it work? What if these decisions were quite conscious and deeply rooted in the “market economy”, and actually a deliberately structured, very human construction?

In other words, the “market” is working exactly as intended, even though the intentions may not have been explicitly acknowledged.

Here are three such “intentions” — three effects that the housing “market” has knowingly produced — that have, over the last 40 years, created the “housing crisis” that occupies so much airtime.

It may seem as though these effects came out of nowhere and caught us all by complete surprise. In fact, these were the unacknowledged intentions of the humanly-created housing market.

The first intention was to deliberately ignore the reality, acknowledged in that every developed country, that the private market cannot build housing that is affordable for the working poor.

Making this worse, Canada completely gave up on social housing in 1992/23 with the last Mulroney budget, when all national social housing programs were cancelled.

Rent-geared-to-income housing, co-ops, special needs housing — all ended abruptly. Until then, Canada had a pretty decent supply of low-income housing, including about 36,000 units in Manitoba. Sadly, that 30-year period of housing programs from about 1960-1990 provided funding that had no long-term sustainability, because the operating subsidies provided did not allow for reserve funds sufficient for upkeep in the long term.

That, and bad management, is why Lions Place was sold to a private sector housing operator skilled in draining profit from older non-profit buildings.

The second intention was to nurture a market cost-of-living environment that pretty much required two working parents to pay the bills. This is a complex intention, with elements of “need-want” confused with “want-need,” the latter driven by advertising that promotes suburban living in homes of at least 1,500 square feet as the “right first house” to which we all should aspire.

In the real world, families live and have lived in much smaller spaces.

Post Second World War housing created sturdy, long-lasting homes which still are found across Canada, homes that were from 800 to 1,000 square feet.

But today’s builders can’t make the kind of profit they would like with smaller homes, so they build and promote much bigger homes on wider lots as the acceptable entry level for today’s families.

The result is that home ownership is denied to any family with an annual income of less than $80,000 a year. Below that, they are economically forced into the rental market.

In Winnipeg, a family of four needs an annual income of about $70,000 to afford a two- or three-bedroom apartment. Currently, rents range from $1,700 to over $2,100, plus electricity. That’s over $24,000 annually just for rent. How could they possibly save any money to become homeowners?

These first two intentions have driven the third into prominence, namely the change from housing as a home to housing as an investment.

Housing has become an investment tool; a commodity, just like any other investment. When coupled with a complete absence of low-income housing, this has driven housing prices far past their intrinsic shelter value into a pure market commodity.

Only in the last ten years or so have we begun to realize what a barren vision this is.

What we need is livable cities in which affordable housing for all is the basis for a more just and peaceful society.

Slowly, and with much resistance, we are seeing some increased density in our cities. We are seeing an understanding that family well-being in this market-created expensive environment needs a range of supports, from child care to locally accessible recreation.

It requires an affordable, accessible and safe public transit system in cities increasingly geared to walkable living communities, greatly reducing the need for cars to take kids to far-flung recreation centres, choosing instead local parks and play areas. Yet we continue to widen streets for ever more cars, while closing local pools and splash pads — especially in poorer areas.

We might then understand and accept that working families with low and modest incomes need access to social housing that is well-built, accessible and available throughout our communities and neighbourhoods.

We would begin to demand that the market offer modest new homes that can be modified and altered as resources allow. We would understand that dense housing is actually safer and far more sustainable and affordable than big homes on big lots with costly services, centred on cars.

At least, let’s stop pretending that, “this is just the way it is.” It is not. We collectively created this environment, and we can, collectively, demand and work for change.

Tim Sale writes from Winnipeg.