I am writing this from a renter’s perspective. Most renters will be sympathetic. But the people who own homes are the majority in Canada.
That will change. In the next years there will be a huge demand for more rental units, and a reduction in rents. There will be little to no increase in demand for mondo condo and sprawlburbia.
Most owners believe their homes are a store of wealth. They will discover they are holding a big bag of air which will deflate sometime soon. I will present solutions to this, but most owners will not want to hear so they can stop reading now.
If you want to keep reading, this is a big and complicated topic. This piece is one of the longer ones I have written. But the concepts are pretty simple.
I live in a social housing complex in Toronto, Canada. I am on the indexed Canada pension plan. My rent is geared to 30% of my income.
So, I am protected from the calamity developing around me as it is possible to be. I can sit up on a cloud and prescribe here solutions for the chaos. I can see all around me that it is getting bad in Toronto the good.
Toronto is now one of the most expensive cities in the world to live in. In Canada, only Vancouver is worse. I left Vancouver decades ago because it became too expensive.
The affordability problem is spreading to smaller centres in Canada. Government at all levels is doing nothing. It is the old attitude that the problem is too ‘political’ and they will wait for it to go away.
The idea seems to be widespread that a bubble will pop, rents and house prices will drop, and the pressure will be taken off. There is a wide spread impression that this is what happened after the American real estate meltdown, over a decade back now. That has not really happened; housing and homelessness has remained pretty bad there.
The real cause of the housing crisis is the same as the other growing crises in Canada. That is, the near total collapse of public government. The cause of this is complicated and rooted in the history of the country.
The solution for governmental collapse is the modernization of our present post colonial government structures. That is not happening immediately. The big danger is the seizure of national government by libertarian lunatics who will try to institutionalize corporate government.
Thus, with no solution for the government problem, there is no solution for the housing problem either. So there is no point saying anything about it and I should end this piece right here.
Actually, there are reasons to prescribe solutions for problems which cannot be solved at present. When people understand what the real problems are, it becomes clear what really needs to be done. This then leads thinking people to what really needs to change, so that the housing problem and all the other problems can be solved.
It is very important to solve the housing problem. Only the problems with health care and with food availability are more important. Ah, yes, and an energy problem which is likely to develop soon, putting us Canadians at risk of freezing to death.
To solve the problem we must understand the problem. The basic problem is that we are living under terminal stage capitalism. Some entity at some point, somehow, must defeat capitalism and take control of things so as to serve human interests.
The most immediate things to be done are; shut down airburb and its imitators. Expropriate housing which is sitting empty. Order not just a rent freeze, but a rent rollback.
To further the rent rollback, set up a system of inspections which set rents for every unit and order the expropriation of any property not being managed properly. Develop a formula for determining rents based on location and the quality of the units.
As for ownership housing, set up tribunals which can authorize write downs of mortgages. Expropriate without compensation all housing being held for speculation. As well, expropriate anything if it cannot be shown who owns it and how they got the money to buy it.
Expropriating a lot of housing will solve the affordability problem but not availability. There does not seem to be as much housing sitting vacant as people think, especially in Toronto. A big part of the problem has been mass immigration, throwing people into the country, especially into the large cities, as cheap labor and with no thought about where they will live.
Thus, immigration must end until it again makes sense. International students must be given the word that Canada is no longer a place to come to. They are going to end up camping on the sidewalk in front of the immigration office.
But if a lot of new affordable housing suddenly becomes available, a system must be created to allot them according to the most urgent need. The ‘housing connection’ system feeding people into the Toronto social housing system is no model for this. More about that problem below.
Once these immediate things are done, the next step is to build. People are saying we are short two million low income units and will be short another three million by 2030. At the moment every local politician has a show project, creating a few thousand new units, usually with no schools, shopping, or services.
People are dramatically proclaiming that we need to start building housing the way we built the Saint Lawrence seaway, the Trans Canada highway, and other beloved projects. That is, to simply use the government’s power to issue the currency, to create the funding for it. Then to simply order it to be done, tolerating no obstruction.
We have everything we need to build five million units of housing in a few years. We would need a moratorium on other construction until these are built. That would insure enough skilled workers and enough materials.
There is enough land to build on. They can be build on quickly but fast should not mean cheap and bad. The buildings should be made to stand for a hundred years, though in these days of excellent modular construction that does not mean they have to stand in the same place for a century.
Prefabricated methods now produce much better quality housing. One thing I have noticed whenever I talked with self designated housing experts or advocates; they have this reflexive hostility to anything prefabricated. This seems to be about a weird loyalty to construction unions.
Of course they must be built according to what we once learned the hard way after the Spanish Flu, and have had to learn hard again from covid.
As well, we cannot just throw up buildings in any available space. They must be fully planned out communities. We must know where the schools will go, where the recreation centre will be, where the medical clinic is, where the shopping is, and very importantly, how the good quality transit runs out of the community to the rest of the world.
Now we get to what has always been the biggest problem with socially generated housing in Canada; how to run it. Countries with much longer experience at building good affordable housing for their people know that the only way to run it is to let the residents run it. Yet in Canada management of housing is always politicized, which leads to bureaucratization.
This is the same problem as with most government functions in Canada’s weak, fragmented, special interest ridden political system. All these power complexes, with different objectives, want control of housing. Toronto Community Housing, the largest public housing authority in Canada, is a good example of this problem.
There are several factions in TCHC management. Currently predominant is the social planning council faction. These people want all housing units exclusively for clients of social agencies.
They are allied with the social policing faction, which sees housing only as a welfare program. They find maintaining institutional housing for the mentally ill to be too expensive. Hostels for the homeless population are also getting too expensive. These groups combine to try to drive the very irresponsible ‘housing first’ program.
That is, to try to force TCHC and other housing providers to rent to released criminals, drug addicts, the mentally ill, and people who have been living in the streets for a decade or longer. The regular residents of these buildings, elderly and disabled people, families with small children, people who are good neighbours and need only an affordable place to live, are seen as ‘unit blockers’. An unspoken part of the ‘housing first’ idea is that social housing is to be made so unpleasant that the unit blockers will move on.
The ‘housing firsters’ keep insisting that their idea works and is a ‘best practice’. It works very well for some people. Many people with addiction and other problems but are still able to function in the community if given a chance, find places to live.
Housing First also solves the problem which corrupt lower tier governments have, in finding a way to pass some of the cost of managing all the addiction, mental illness, mental incompetence and criminality issues onto the federal government. It is also an excellent way of suppressing residents of social housing buildings, as I will discuss below. Note that homelessness and behavioural problems are two distinct things.
What is outrageous about all the literature praising the supposed effectiveness of housing first policies, is the total blindness to the effects on those for whom it does not work. That is, the regular residents of the buildings, the maintenance workers of these buildings, the housing management whose operating costs are ballooned, the neighbourhoods around these buildings, the local police, and so on.
The homelessness problem is really two problems; the housing shortage and the social dumping problem. There are homeless people who simply need homes they can afford. The solution is as above; build them.
The social dumping problem was created by the ‘community treatment’ idea which was introduced about thirty years back, by the same people who then gave us ‘housing first’. That is, to close most psychiatric and other institutions and throw the inmates into the community. The line was that these people would be ‘treated in the community’ and money would be provided for that.
There was never any intention to ‘treat’ anything. It was first of all about saving money. Secondly, dumping large numbers of crazy, violent, criminal people onto poor communities is a great technique of social policing.
For thirty years there has a been a fight between the social police or bad social workers, and their disruptive ‘clients’, on the one hand. On the other have been various vulnerable communities; the homeless, residents of poor neighbourhoods, and residents of social housing. The fight has gone in cycles.
The vulnerable and their supporters, especially good social workers, have had to fight to get the creeps who prey on them, and their bad social worker handlers, put back in their bottles. Eventually the destructiveness of community treatment and housing first becomes clear and they are restricted. But politicians have short memories and the social police keep regrouping and coming again.
Residents of social housing are now in another cycle of having to fight for peace and security in their own homes. The cover for this latest wave of social dumping has been the covid pandemic and the rise in homelessness.
I am somewhat involved in this fight in my own building. It is frightening, frustrating, and infuriating. However, I have been through enough of these fights and I leave most of it to younger hands.
The good faction in TCHC and the city housing department is on the outs right now. The new mayor may change things. These are the people who would like to be able to run housing and build new housing according to the real best practices from countries with long experience at it.
Some European countries, notably Germany and Austria, have had the best housing systems in the world. They seem now to be being broken down by the rise of neoliberalism there, as everywhere in the western world. To reestablish a more feudal social arrangement, more like the English speaking world, private land ownership is being extended.
Urban land must be taken away from government and from these cooperative housing societies. There are several European firms which specialize in taking over social housing and turning it into much more expensive private rental housing, or selling it off. They are now operating in Canada and looking with interest at our social housing stock.
These Austrian models were threatening good examples which need to be stamped out at all cost. The private developer industry cannot tolerate systems which generate high quality, low cost housing, so good that owning their own housing was no longer so attractive to most people. In these countries, few people owned their homes and were not interested in owning.
Worse, these different public and cooperative housing organizations generated surpluses from their operations, which could be used to build even more housing. People might start getting the idea there is no good reason for a property developer industry to exist. Such activities should be outlawed and urban planning done by government planners, assisted by public consultation bodies or ‘minipublics’.
Another thing well shown by experience all over the world is that the only good way to run housing is to let the residents run it to the greatest extent possible. Most residents self management systems will still require some technical assistance, and sometimes intervention when things go wrong.
In any democratic, participatory system, there will be nefarious actors lurking in the shadows, looking to hijack it. Systems must be in place to prevent this kind of thing.
But the biggest enemy of any kind of public or cooperative resident’s management bodies will be the local housing officials. The Toronto “Shelter, Support and Housing” department, and this new “housing secretariat”, are famously hostile to building residents having any say in running their housing.
This is part of the general antidemocratic trend in Canadian society, which has been worsened by neoliberalism. The lower classes are not supposed to gain any experience at managing anything themselves. These bureaucrats even constantly attack the boards of those housing cooperatives which are partly subsidized.
The first problem with rental housing in Toronto and, it seems, most other major cities in Canada, is, to reiterate, the inability of housing management and municipal politicians to separate two problems. One is the unavailability of good affordable housing. The other is the social problem created by the social dumping policy.
The solution for the first is to get new housing built. In order to have it built right and run right, new organizations must be set up and staffed by people who understand the purpose of housing. They are to be given the money, land, and power to get the job done right.
The solution for the second is to rebuilt institutional housing for those who cannot live on their own. In most countries where civilization has progressed further than in Canada, people living in the streets is not tolerated. Neither is antisocial behaviour in residential buildings.
It should be obvious that anyone who cannot live on their own without being a nuisance and hazard to all and themselves, must be in a mental institution. The rest of us did not volunteer to be part of someone’s ‘community treatment’ program. The real aim of these ideas is to deliberately create ennui in low status communities and housing, as a method of social control and policing of the “dangerous classes”.
As for owner housing in Canada, the basic problem has been the inability to grasp that real estate values cannot go up indefinitely. Housing is for living in, not speculating in. Uncontrolled real estate speculation has been a boon for the first generation, and ruin for the next generations.
To return to what needs to be done when we get an effective government, residential land costs may be better not dealt with immediately. A massive real estate deflation would drive the point home and eliminate most opposition to serious reform.
Beyond the global deflation which is now beginning, such a deflation in real estate would be achieved by two measures. One is to withhold all credit for buying real estate above its use value. The other is property tax reform which makes it unprofitable to hold land without using it or improving it in some way.
There is much talk now of a "Land Value Tax", on the perceived value of the property, with all improvements to it. There are still perverse incentives in the LVT. It disincentivizes improving the value of the piece of land, as by added construction. It actually incentivizes keeping land value artificially high so as to maximize tax revenues.
Private property needs to pass into public hands. Home ownership needs to begin working on the model of people owning the buildings, but leasing the land long term from government. People can sell the buildings, or even move modular buildings somewhere else, but the land lease cannot be transferred.
It needs to keep being repeated, that the experience of well ordered countries which do housing right, is that when publicly run housing is really well built and run, people decide they do not need the expense and bother of owning their own homes. This mostly puts those paragons of civic virtue, property developers, out of business. It also makes urban planning easier and better, and delivery of public services better and cheaper.
More people are saying to the effect that to solve the housing crisis, Canada will have to mobilize its full power, as in the world wars. This is true, but it will not happen in our current circumstances. For this, the Canadian people must mobilize our full power to overcome the present order and put in place government which serves our needs.
Only this will end the housing crisis. We really do have a crisis coming on us. It is becoming increasingly impossible for people to live.
A national housing authority must be created. It must have power to issue the needed funds under the government’s sovereign power to create the currency. It must assume power to override lower levels of government.
Land, construction labor, and construction materials production, and construction equipment, must all be subject to cooptation. A plan must be executed, to build five million units of housing in five years, and build it right. Maybe we should put Mike Holmes in command of it.
Of course, this is dreaming. The truth is we are screwed, in the short and medium term. Squatter encampments will grow, random violence will increase, homeless deaths will increase, and the livability of existing housing will decrease.