We’re all to blame for Canada’s brutal housing market

Daniel Blaikie, NDP MP for Elmwood-Transcona and son of former NDP stalwart Bill Blaikie, has become something of an online celebrity in recent weeks. In a House of Commons speech that went viral, he lashed out at Conservative Party of Canada Leader Pierre Poilievre’s housing message, one that predictably lays all the blame for Canada’s dangerously overheated market at the feet of the Trudeau Liberals.

Instead, he argued, much of the pain felt by renters, immigrants and young Canadians is the result of the failure — one shared by both Conservative and Liberal governments — to build affordable government housing the way we did in the 1970s and 1980s. “Housing prices in Canada have been doubling for a long time,” Blaikie said. “They doubled every few years under the last Harper Conservative government. So don’t tell me that this is a product just of the last little while. It’s a problem, and it’s a growing problem. But it’s been growing for a long time.”

He’s right. The failure of government to build affordable housing isn’t the only reason why house prices in this country have shot through the roof over the last two decades. Interest rates that only seemed to keep going down and immigration levels that boosted demand for housing were also key drivers. But the decision by the Chrétien Liberals to get out of the business of government housing, and the refusal of the Harper Conservatives to get back into it, has resulted in an approximately 500,000-unit shortfall of affordable housing. As Blaikie noted, if you multiply the 15,000 to 20,000 units the federal government used to build every year by the 25 years that have passed since the Chrétien government cut funding for them, that adds up to … well, approximately 500,000 units.

Building more affordable housing is a key part of any strategy to bring some sort of sanity back to our housing markets, and it’s one a Poilievre government would almost certainly avoid. Another key part is more market-oriented housing, which the NDP and people like Blaikie sound far less unenthusiastic about. But the beating heart of any successful housing strategy in this country involves going after the biggest enemy in all this: our own behaviour.

As cartoonist Walt Kelly famously observed in 1970, “We have met the enemy and he is us.” So it is for housing in Canada, where politicians on both sides of the House of Commons talk a good game about affordability and opportunity and then fall over themselves to prop up the existing system — and pour rocket fuel into its engines as required. The Harper Conservatives did this when they laid the groundwork in their 2006 budget for the spread of zero-down, 40-year mortgages — the same volatile financial cocktail that nearly blew up the U.S. banking system a few years later. The Trudeau Liberals have done it through new tax incentives for homebuyers and shared equity programs backstopped by the Canadian Mortgage and Housing Corporation, including a new tax-free savings account for first-time buyers. And make no mistake: if the federal NDP was ever to form government, they’d probably do it, too.

But all of these demand-side supports are simply adding fuel to a raging fire, one that’s already singed the lives of millions of young and new Canadians. We’re even worse when it comes to the supply side of the picture. Witness the outbursts of NIMBYism that inevitably greet any attempt to add density in established neighbourhoods, regardless of its merits or the impact it might have on affordability. The latest ludicrous outburst occurred in Stouffville, Ont., where a proposed townhouse development — townhouses! — along the community’s Main Street was met with the usual complaints from existing residents. They even posed for the stereotypical “older homeowners with arms crossed” photo, either because they are unaware of the trope they’re perpetuating or because they simply don‘t care.

There’s been some progress on this front in places like Vancouver and Toronto, where the politics have become so glaringly obvious that even the most tone-deaf elected official can read the room. But even there, it’s been the result of hundreds — or heck, maybe thousands — of small battles, each one exacting its own toll and taking its own extra time. The truth of the matter, when it comes right down to it, is that most homeowners don’t want housing to be more affordable if it means the value of their property has to go down in the process, or that more people are going to move into their neighbourhood. And that, of course, is exactly what has to happen.

Don’t even get me started about the idea of taxing some portion of the capital gains in our homes, a policy that would help take some speculative activity out of the market and reduce upward pressure on prices. As Generation Squeeze has written repeatedly (and backstopped with public opinion research), there’s a good case for taxing homes worth more than a million dollars, and doing it in a way that protects seniors or other existing homeowners who didn’t do anything other than be in the right place for a long time. But unless younger voters coalesce around this issue in a way that’s never happened before, it’s a case that leaders from our major political parties will never make.

The real problem, in other words, is us. It’s tempting to think we can solve the housing crisis by doing things that only affect other people or electing a government that will push some magic button in its midst. But until we confront our own attitudes, biases and behaviour here, we’re never going to do more than just tinker at the edges. And maybe, just maybe, that’s how a lot of people would prefer it.

This column is featured in my new newsletter, which you can get delivered to your inbox once a week. If you want to stay up to date on my signature, no-nonsense opinion writing, subscribe here.