Some topics are just too big to be covered in one column. That’s why, over the next two weeks, Max Fawcett will tackle the housing crisis and the ways we could address it in a series of them. For more on this series, read the first, second, third and fifth instalments.
Few people are as powerful as the aspiring homeowner in Canada. After all, the banks and financial institutions will compete for your business and cater to your needs. Governments will subsidize your purchase, either through direct financial incentives or programs that allow you to borrow at low or no cost. Politicians will prioritize your interests and privilege your opinions and ideas. And parents and well-meaning relatives will often give you the money you need to make a down payment, with the average gift reaching $80,000 in 2020 according to CIBC.
If you’re a renter, on the other hand? You might as well be invisible. Take the Ontario government’s Housing Affordability Task Force, which was announced in December and stacked with CEOs and senior executives from the housing-industrial complex. It’s led by Jake Lawrence, the CEO and group head of global banking and markets for Scotiabank, and he’s joined by the CEO of the Ontario Real Estate Board, the presidents of two different real estate development companies, and the president of the Building Industry and Land Development association.
There is the obvious issue of asking the fox how best to guard the henhouse here. But the bigger problem might be just how unimportant the needs and interests of renters will be to this group. And while renters don’t make up nearly as big of a potential political constituency as homeowners, we have to start shifting the balance of power back in their direction. After all, if we want to cool off the housing market, we need to find ways to both increase supply and reduce demand. Taxes can do a lot of the heavy lifting on the latter, but they can’t do all of it. That’s why a renaissance for renters, and renting, needs to happen.
Provincial governments can help by strengthening the legal rights of renters, banning renovictions, and curtailing proposed conversions from apartment buildings into condominiums. Cities can play their part by strictly enforcing rules on short-term rentals that prevent the cannibalization of rental units by sites like Airbnb. The federal government can introduce new incentives for new purpose-built affordable rental buildings. And Canada’s banks can be encouraged — or required — to lend money on more advantageous terms to groups looking to build new co-operative housing projects.
But we also have to find ways to make renting more lucrative for renters, not just their landlords. As Winnipeg real estate broker Wendy Peters told the CBC, “Real estate is like the rising tide that lifts all boats. But you have to have a boat to begin with. If you're renting, you don't have a boat.”
It’s time to give renters their own boat and show them how to float it. The federal government could do that, for example, by creating a tax-friendly savings vehicle geared specifically to renters. The provinces could enhance their existing tax credits or subsidies for renters. And banks, if they’re feeling creative, could offer products that serve as forced savings vehicles for renters.
All of these efforts must be in the pursuit of the same broader goal: changing the way we look at renting and renters. In Canada, as in most of the western world, homeownership is treated like some kind of secular faith. It both establishes and enhances one’s virtue and makes the homeowner a more respectable and valuable member of society.
This is hardly a new idea. As U.S. Sen. Charles Percy said in 1966, “A man who owns his home acquires with it a new dignity. He begins to take pride in what is his own, and pride in conserving and improving it for his children. He becomes a more steadfast and concerned citizen of his community.”
Renting, on the other hand, is often seen as a threat to those virtues and the communities that personify them. At best, it’s considered a stage in life that one naturally and necessarily moves through, and it has few natural allies. There are no television stations or magazines dedicated to glamorizing the lifestyles of renters, and there aren’t thousands of contractors and small businesses who make a living by renovating people’s rental units.
Opinion: We have to find ways to make renting more lucrative for renters, not just their landlords, writes columnist @maxfawcett. #HousingCrisis #Canada
Our obsession with the owned home, and its outsized role in our economy, paints us all into a very dangerous corner. The only way out is by giving people another option, one that has financial and cultural rewards that make it a viable alternative to the path most of us have been shepherded down.
It won’t be easy, given how much we’ve collectively invested in the idea that buying a house is the correct course in life. But if we want to actually address Canada’s housing crisis, it’s time to think bigger.
Next up: Why it’s time to spread the housing wealth in this country.