Corporate pandering puts housing out of reach
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This article was published 10/08/2022 (294 days ago), so information in it may no longer be current.
Canadians trying to buy their own homes, rent an affordable home, or just remain in affordable housing, are all getting kicked in the teeth.
The housing market has been set up so that Canadians looking for homes are pitted against deep-pocketed corporate investors. It is a battle they cannot hope to win.
There are people who will tell you different things about the housing market in Canada. The Liberals so far have only been willing to act with respect to foreign buyers, but we know they only represent about five per cent of the market.
Conservatives will tell you it’s government spending, or the Bank of Canada, or anything else they can say to distract from the real problem — runaway corporate profits made by turning a market for families needing a home they can afford into an asset class for investors to make money on.
This is not something that has happened simply by accident.
This problem started in the 1990s when the Liberals canceled the national housing strategy. Soon after that, real estate investment trusts (REITs) started taking off. REITs do not have to pay corporate taxes, so they reward investors who make real estate their core business.
REITs are part of the problem with the housing market. They can buy a building with affordable rents, upgrade the property and then jack up the rents. Existing tenants are forced out (‘renoviction’) while investors get special tax treatment for their profits.
Although this activity has accelerated over the course of the pandemic, it has been going on for decades, under Liberal and Conservative governments alike. Just as Conservatives and Liberals have both refused to renew operating funding agreements for social housing built in the 1960s and 1970s. These operating funds made it possible to adjust people’s rents to their incomes, but these buildings cannot continue to offer these options without funding.
The expiration of these grants makes many buildings a plump target for REITs that have the cash on hand to outbid experienced non-profit associations.
For every unit of affordable housing we build in Canada today, we are losing 15. This is why so many Canadians are finding it harder to afford a home.
New Democrats are calling for a few targeted measures to correct this. We want a moratorium on REITs and corporate landlords acquiring affordable buildings. We want a fund for non-profit housing experts to acquire those buildings and run them properly to maintain affordable housing. We want an end to the preferential tax treatment for REITs that make them an even more attractive investment opportunity, even as they help break our housing market.
These are real solutions to create and protect affordable housing in Canada.
Elmwood-Transcona constituency report
Daniel Blaikie is the NDP MP for Elmwood-Transcona.