How to solve a housing crisis’

In the wake of the growing global “Crisisification” of housing, it isn’t just indigenous people that are facing the issue.

Housing on reserve seems to have always been scarce, especially when Six Nations has the largest index of band members in Canada (upwards of 25k). We can also take into account all fo the land that isn’t developed and may never be, and all of the land that is disputed. This pushes many to find housing off-reserve, where they are just like a Canadian to the housing market.

But if so many people are affected by the crisis, why does the problem appear to be resisting resolution?

Let’s break it down.

We can frame the issue by looking at dominant aspects such as poor land supply, inefficient planning, and housing affordability.

Then we can decrease by looking at the subordinate aspects such as wages and income, immigration, migration, private rental market and security of tenancy.

Then we can see the episodic aspects such as the quality of the home, spacial or regional perspectives, and foreign ownership and investment in housing.

Thus, the various aspects show that there is not just a housing crisis by itself, but that there may be a supply crisis, a demand crisis, a quality crisis, a distribution crisis, a credit crisis, a rental crisis, and so on depending on the location.

Average housing prices have grown by 80 percent Canada-wide since their lows in the winter of 2009, and more than doubled in Vancouver and Toronto.

This is because housing prices in Canada have been driven higher largely by land appreciation; it is not uncommon in major cities for the structures built on land to comprise just a small sliver of the value of a property. For example, between 2007 and 2018 real estate in British Columbia doubled in value, appreciating by nearly $1 trillion in inflation-adjusted terms, the vast majority of that a result of higher land values.

Meanwhile, as real estate prices have exploded, between 2008 and 2017, the nominal median wage has gone up 22 percent Canada-wide and 20 percent in both Ontario and B.C. Adjusted for inflation this is considerably less than one percentage point per year in real growth.

In Alberta, it was recently reported that Cenovus, a Canadian integrated oil and natural gas company headquartered in Calgary, wants to help address the Indigenous housing crisis in northern Alberta.

The project aims to provide roughly 200 new homes as well as jobs and training opportunities to the indigenous sector of the area.

Cenovus is thus committing $10 million per year for five years to build much-needed new homes in six First Nations and Métis communities closest to its oil sands operations in northern Alberta, with the potential to extend the project to 10 years. The company “sees this initiative as an important way to contribute to reconciliation with Indigenous peoples.”

Not all of us have access to the charity of a multi-million dollar company, however. But the issue can be fixed for everyone in Canada with a few tools, and these two are probably the brightest:

To start, Canada would need to end exclusive zoning in cities.

Canada can carefully dismantle the system of exclusion that maintains a false scarcity of land and keeps significant portions of cities off-limits to renters and workers.

This includes suburbs and is an idea that urban planners and Canada’s developers are getting behind because unlike other parts of a city, suburbs are inflexible. Strict zoning means that, while urban areas can transform to serve new purposes as cities change, suburbs stay the same. The solution then is to de-zone the suburbs and allow the construction of townhomes and low-rise apartment buildings.

Next comes the direct provision of non-market housing.

The public sector should be an aggressive “builder of first resort” that embarks on a massive build-out of high-quality, democratic, non-market housing that the poor, working and middle classes can afford.

Direct publicly provided housing, private non-profit housing, co-ops, and community land trusts are all good options. Not only would a rapid build-out eliminate some of the current stigmas around social housing, but it would also directly challenge both the primacy of the market and the prices it currently sets. And it would pay for itself in the long run, courtesy of the joint magic of state-backed credit, existing public urban land, and cross-subsidization.

Part of what made homeownership affordable in Canada in the post-war boom years was the construction of large-scale community housing projects, financed by taxpayers.

If Canada wanted to, the country could also cut immigration levels to reduce population growth and allow the housing supply to catch up.

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