In last week’s issue, we discussed how the postwar construction of auto-oriented suburbs individualized our lives to increase consumption and generate profits for corporations. One of the key elements of that transformation was promoting private homeownership — it’s something we must change to build a more inclusive world.
When the Canada Mortgage and Housing Corporation introduced public mortgage insurance in 1954, lenders no longer had to worry if the buyer couldn’t pay. That vastly increased access to mortgages and home ownership, especially when paired with other incentives and regulatory changes over the following decades.
In 1921, the homeownership rate in Canada was 46 per cent. After the Second World War, as the government put in place new programs to spur the building of homes, that rose considerably, going from around 55 per cent in the mid-1950s to more than 60 per cent in the 1970s to its peak of 69 per cent in 2011.
This government promotion of home ownership across much of the Western world changed the culture of our societies. As author Grace Blakeley describes in Stolen: How to Save the World from Financialisation, home ownership makes people more invested in the capitalist system as they build wealth through the ownership of an asset — even though the vast majority of the benefits continue to accrue to the wealthy.
Blakeley makes an important observation that under such a system, wages are replaced with “debt and private wealth as the central determinants of many households’ sense of economic prosperity.” In other words, this means “the financialization of the household has radically individualized peoples’ experience of the economy, leaving them to rely on individual financial management rather than collective political mobilization to improve their standard of living.”
Home ownership was a key factor in creating a more individualized and conservative society by making a greater percentage of the population invested in the status quo. Over the course of many decades, that has also contributed to a shift in how we perceive housing: no longer as a home where we can feel secure and comfortable, but as an investment that’s meant to generate wealth.
The promotion of home ownership and the perception that property is an investment also has the effect of making life worse for renters. Last year, Global News reporter Erica Alini spoke to Juliane Lorenz, a German citizen who lived in Toronto and wrote her dissertation on the city’s urban sprawl. She explained that there’s a culture in Canada that views renting a step down from ownership, which is reinforced by a regulatory framework that skews in favour of landlords.
Lorenz claims that’s not the case in Germany, which has a homeownership rate of just 45 per cent and provides indefinite rental agreements where the tenant won’t be kicked out, while pegging rent increases to inflation so renters won’t get hit with massive increases.
One of the immediate solutions to the issues brought about by the shift to home ownership is creating more publicly owned rental housing that isn’t subject to market forces.
In 1972, 31,000 units of public housing were built across Canada. The number fluctuated over the next decade, but hung around 20,000 units per year until the late 1980s. After the federal government slashed its support for public housing, that number dropped to around 1,000 units per year by the late 1990s. Nurse and filmmaker Cathy Crowe argues we’ve missed out on 520,000 public housing units as a result of the cuts, just as Canadian cities struggle with affordability crises and rising homelessness.
Public housing plays a key role in housing markets, as there will always be many people that the private market will not serve. Alini also spoke to David Hulchanski, a professor of housing at the University of Toronto, who explained that the introduction of condominiums in the 1970s is partly to blame for why renting got so bad.
Before condominiums, wealthy people who wanted to live in towers had few choices but to rent. Since condos were introduced, renting in the top 20 per cent of income earners has fallen from 14 per cent to 5 per cent, and more than half of renters are now in the bottom 40 per cent of income earners, so they’re not profitable to serve.
That means the immediate solution to this crisis has to be public housing, as private developers will not meet those needs. Yet public housing doesn’t have to be grey, isolated tower blocks. We can make it a model for the future of urban life if we build community, provide opportunity and support, and learn from successes globally.
In Canada, around 628,700 households lived in public housing in 2018, making up 13.5 per cent of all renters. But more than 280,000 households are on waitlists across the country. In major cities, prices are too high and vacancy rates are low. A government that truly cares about a right to housing should put people back to work with a massive plan to build more public housing.
Perspectives from around the world
Sarah Smellie, a St. John’s-based journalist, spoke to advocates who say the government will cause a poverty crisis if it tries to make people repay the CERB.
Leigh Phillips and Michal Rozworski, co-authors of The People’s Republic of Walmart, explain how the pandemic shows the market cannot deliver and we need a democratic system of planning.
Geoff Sharpe, co-founder of Passage, argues the left needs to build its own media to win power.
Herman Rosenfeld, an activist and former national staff person with the Canadian Auto Workers, explains some of the successes and challenges faced by Toronto’s free transit campaign.
Ysh Cabana, a writer and organizer in Toronto, explains how the pandemic shows how dependent Canada is on migrant farm labour and how badly they’re treated.
Karel Williams, professor of accounting and political economy at Alliance Manchester Business School, explains how privatization, outsourcing, and deregulation eroded the capacity of the state to manage complex projects.
David L. Carden, United States ambassador to the Association of Southeast Asian Nations under former President Barack Obama, argues it’s time to bring the hammer down on tax havens to pay for the pandemic.
Luke Savage, a Toronto-based Jacobin staff writer, remembers Michael Brooks.
This week on Tech Won’t Save Us, I spoke to Julie Michelle Klinger, author of Rare Earth Frontiers: From Terrestrial Subsoils to Lunar Landscapes, about the resource scarcity myth that’s fuelling the push for space mining and why we need to ensure space remains a commons.
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