Remember life before the coronavirus? Drinks on the patio. A regular paycheque. Hugs. We all can’t wait to get back there.
A return to “normal” is less rosy for other things. Like housing affordability. Last Friday was rent day and that’s seriously daunting when incomes have been slashed for millions of people. As a result, many more will join the ranks of Canadians who already struggled to cover their number one expense before the pandemic. Consider these pre-Covid housing stats:
- In cities like Vancouver, Toronto, Ottawa and Halifax, more than than half of people under 30 already spend more than they can afford on rent (upwards of 30% of their income, sometimes more than 50%).
- Young people aren’t the only ones feeling the pinch. Nearly half of Canada’s 3.4 million working renter households don’t have enough savings to pay their bills for more than a month if they lose their jobs, according to research released in March.
- It’s easy to assume homeowners have it better. Except when they’re over-leveraged. Median mortgage debt has more than doubled since 1999. Families with kids have been among those hit hardest, with debt growing by 112%.
This was the reality before the coronavirus choked our economy. The pandemic has given a hard shove to those already living on the edge of housing insecurity. The result? Massive government spending to try and keep them from tipping over it. With rent due again today, these interventions are critical and must be strengthened to protect people who still can’t cover their housing costs – now or when deferred payments become due.
But governments can’t pay out landlords or lenders indefinitely. When the rent subsidies, eviction bans, mortgage deferrals, financial supports and countless other efforts wind down, we need to take that spirit of mobilization and tackle the housing affordability crisis at its root causes.
Before Covid-19, housing was financialized and turned into a commodity. NIMBYism and outdated regulations prevented new homes from being built in neighbourhoods where more people should be living. Costs skyrocketed, supply dwindled and millions struggled.
While governments recognize these problems to varying degrees, few have been willing to confront housing unaffordability as a true crisis. This is reflected in the absence of clear and inclusive topline goals in many governments' housing strategies.
In contrast, Canada Mortgage and Housing Corporation, the country’s arms-length national housing agency, has proposed that everyone in Canada has a good home that they can afford and meets their needs within 10 years. This is the kind of goal governments need to explicitly embrace, in order to prioritize the actions that can help achieve it.
Action includes making sure housing is a place to call home, not a way to get rich. This happens by restricting global capital flows into local real estate, taxing empty homes, cracking down on speculation and laundering, regulating short-term rentals, holding the line on mortgage stress tests and amortizations, and expanding the non-profit housing sector.
Action includes making space for all types of residents in our cities and communities, whether they rent or own. This means opening up low-density zoning with an emphasis on more family-sized units and purpose-built rental, incentivizing new supply, focusing on energy efficiency and green building, and dialing up protections for renters.
Action includes lowering income taxes and raising taxes on property wealth to keep money with people who need it, rein in housing and land costs, and to address inequalities between renters and owners, and young and old.
After Covid-19, governments need to confront how severe our housing unaffordability crisis was before the pandemic, and how the emergency response was harder and more expensive because of it. This means making sure that recovery plans prioritize actions that achieve the goal of ensuring all Canadians can afford a home within a decade.
As an organization that speaks up for economically squeezed younger Canadians, Gen Squeeze regularly points out how people in their 20s, 30s and 40s are being crushed by housing costs. But Canada’s affordability divide has many other losers, from younger people and families, to new Canadians, to low-income workers, to vulnerable seniors. As a collective, we are not the minority. And we all deserve a good place to call home.