The new housing policy proposed by British Columbia Premier David Eby a few weeks ago was pushed through the BC legislature in a couple of days with very little debate or scrutiny. (Where were the opposition Liberals?) Two aspects at least deserved deeper consideration.
First, the legislation forces condo and townhouse stratas (home owners associations) to allow rentals. How will this increase the housing supply? What this change will do is invite speculators into these complexes, driving up the prices. Essentially, it will mean there will be more renters and fewer owners. How is it good social policy to turn owners into renters?
Stratas are not just neighbourhoods. They are communities, with shared rights and obligations. Adding absentee landlords and temporary residents into the mix makes it more difficult for them to function. Too often landlords won’t spend money on upkeep because it cuts into their profits, and renters won’t spend money or effort on upkeep because it is not their place. Landlords and renters will also not sit on strata councils, attend meetings, or volunteer to participate in work days. In the long run, Eby’s policy could turn communities into slums.
Second, Eby’s plan removes restrictions on secondary suites. This means that empty basements can be rented out. But it also presupposes that houses are built with extra room. Many single-family dwellings are only suitable for single families. In the long run, this policy change will encourage the practice of tearing down 2,000-square-foot houses and replacing them with 4,000-square-foot houses, to allow room for a “mortgage helper” suite. This increases the number of rental units in the short run, but in the long run it prices more people out of home ownership. That family living in a secondary suit will have to stay there permanently. They might eventually be able to afford to buy a 2,000-square-foot house but not a 4,000-square-foot house.
The federal and provincial governments also seem to think that the solution to the housing crisis is for governments to build new housing themselves. This allows them to appear to be taking action. But there is no way that the federal and provincial governments, already carrying massive debt, can build all the housing that is needed. Social housing in large cities such as Vancouver has cost as much as a million dollars a unit (for a single occupancy bachelor suite). For the estimated 2,000 homeless currently in Vancouver, the cost would be $2 billion. Providing housing to even 5 percent of the population would require taxing an even larger percent of the population into bankruptcy.
Eby’s government also favours rent control, which lowers rents in the short run, but in the long run it limits developers’ profits. The result is means that developers will stop building rental units and the government will have to pay to build more social housing to make up for the shortage of rental units.
This whole approach begs the question of what housing crisis the BC government is trying to solve. The policy seems aimed at helping the permanently unemployed—the homeless, mentally ill, addicted, and disabled.
There is no question that these groups need help. But they are not the only Canadians facing a housing crisis. Federal Conservative leader Pierre Poilievre has targeted another group, the “working poor”—and indeed the working lower middle class—the people who are living in their parents’ basements because they cannot afford to pay the mortgage on even a modest home.
The Eby policy is intended to help renters, while Poilievre’s focus is on increasing home ownership. Indeed, the focus on renters can actually decrease home ownership.
This raises the question of what the ideal society looks like. The Old Testament upheld the ideal of an egalitarian society where everyone would “sit under their own vine and under their own fig tree” (every family would have their own small plot of land) and no one would “make them afraid” (Micah 4:4 NIV). This is the same ideal upheld by the old Jimmy Stewart Christmas movie It’s a Wonderful Life. Stewart’s character George Bailey ran a “building and loan” (essentially a credit union) which provided mortgages to the working class, the people “who do most of the working and paying and living and dying in this community.” This allowed them to get out of paying rent to the unscrupulous landlord and banker Henry Potter. Bailey’s theory was that owning a home gave working people a stake in society and made them “better citizens.” The movie shows how the lack of the savings and loan (and diminished rates of home ownership) would lead to a host of social ills.
Now, the movie was made in 1951, at the beginning of a period of postwar prosperity and suburban sprawl. The experts tell us that owning a single-family house (the goal in the 1950s) is no longer possible for most Canadians. That may be so, but that does not mean that home ownership is impossible.
Government’s current focus on solving the homeless crisis can lead to policies that help the homeless but make it harder for the working poor to own a home. The high taxes going to social housing make home ownership less likely for the working poor and the middle class.
This leads to the question of what kind of housing should be made available. George Bailey’s goal was quite modest—“a couple of decent rooms and a bath.”
The ideal is for as large a percentage of the population as possible being able to own their own home. This gives people a larger stake in society and provides some security for them, both now and later as they age. It removes them from the control of wealthy landlords and governments. Pursuing this goal will require a change of attitude on the part of all levels of government. Instead of governments levying ever more taxes to build ever more social housing, governments should make it possible (create the conditions) for the free market to supply the needed housing.
Many people will never be able to afford a million-dollar house, but cheaper options exist. For instance, municipalities can protect trailer parks from “development.” They can also encourage the protection and construction of smaller and cheaper apartments, townhouses, and houses. Developers want to build more expensive buildings with sculpted roofs, vaulted ceilings, and marble countertops—because they can sell them for more money and make more profit. Municipalities encourage the erection of expensive buildings because it increases the tax base. But when modest homes are demolished to build more expensive buildings, the result is that home ownership becomes impossible for an ever increasing percentage of the population and governments will have to build more social housing to deal with a growing homeless population. There is something wrong when many Canadians cannot afford to buy a million-dollar home but governments are building million-dollar-a-unit social housing for the permanently unemployed in the middle of Canada’s largest cities. Governments might respond that in a free society the homeless have a right to live where they want—but that is a right denied to the working poor and much of the middle class. I know that I could never afford to own my own dwelling, even a condo, in Vancouver or Toronto.
Years ago, I knew a family who lived in a tiny house, in reality a two-room shack. It was vastly inadequate housing. But that home was filled with love. And they owned it. It provided a stable foundation on which to build a life. The children went on to have successful lives.