STOP THE LOSS. 15 affordable homes are lost for every 1 built. STOP financialization of housing.
Enough is enough! Let’s ALL decide that NOT 1 more affordable home will be LOST in Calgary, across Alberta and across CANADA – because that could mean homelessness to someone and life trajectories forever changed for the person and the person’s loved ones/family.
Affordable housing is being lost faster than we can build it, including due to financialization of housing - treating housing as a for-profit commodity and NOT first as a HOME, a basic human right as per the National Housing Strategy Act, 2019. Research reveals that for every 1 affordable housing unit that is built “at considerable public cost”, 15 existing private affordable housing units are lost – primarily due to financialization of housing: Why Canada needs a non-market rental acquisition strategy. – Focus Consulting, Steve Pomeroy - March 2020.
- See in Updating analysis on erosion of lower rent stock from 2021 census – Steve Pomeroy - October 2022. “The loss of affordable housing in Canada is occurring at such a high rate that it will be impossible for current NHS [National Housing Strategy] initiatives to maintain, never mind expand, the net stock of low-rent units research shows…” Calgary lost over 4,600 rental units (nonsubsidized) under $750 from 2011 to 2016 (see at page A-6).
- Additionally, see in Steve Pomeroy’s BRIEF dated May 2023 to the House of Commons HUMA Committee Review regarding financialization of housing, rent gouging, renovictions and related issues > which was also provided as a BRIEF to the National Housing Council Review of financialization of purpose-built housing. “…Erosion of the lower rent stock occurs via two parallel processes – absolute loss due to demolition and redevelopment of the older lower rent properties; and rent creep, where the structure still exists, but due to vacancy decontrol rents are rapidly inflating and moving above the affordable range. Using the benchmark of $750 which is affordable at 30% at an income of $30,000, the change in the number of such low rent units has been tracked across the 2011-21 census. It reveals a very large erosion with some 320,000 fewer units in 2016 vs 2011, and a further reduction of at 230,000 between 2016-21. In total over 550,000 units below $750 were lost over that decade. This represents 6% of total unsubsidized rental housing. And it means that many low-income households are forced to rent above $750 and pay well over 30%. Those that need to move (work, family separation, eviction) are then confronted with much higher rents as other vacancies will have moved to full market – which is often unaffordable. One consequence is encampments and homelessness, or living in a car, as reported for a nurse in Halifax in the Globe and Mail May 23rd ” [This 57-year old grandmother didn’t choose the van life. The housing crisis chose it for her. – The Globe and Mail – May 23, 2023] [Emphasis added]
- Also, see in RETHINKING CANADA’S TARGET FOR 5.8 MILLION NEW HOMES BY 2030 - Steve Pomeroy, Industry Professor, Canadian Housing Evidence Collaborative (CHEC), McMaster University – February 2024, pages 7, 1 : “ …While subsidies can assist in adding new targeted affordable housing supply, it is critical to concurrently manage the ongoing loss of lower rent units. The distribution of renters by income band against equivalent rent bands (i.e. incomes of $20,000-$30,000 who can afford $500-$750) identifies an absolute lack of rent homes. This ongoing erosion at the lower end of the rent distribution due to excessive rent increases, as revealed in the rentals.ca data and reported by Pomeroy 2023, exacerbates this shortage ….Alongside expanded housing allowances, the risk of escalating costs caused by excessive rent increases must be management through stronger rent regulation…” [Emphasis added]
Financialization of housing apparently did NOT always exist but was created through government policy changes in the 1990s by which the Federal Government stepped out of providing affordable/social housing and allowed the housing “market” to take over and the provinces also stepped back rental protections. But over the past 20 to 30 years the housing “market” has failed on an enormous scale to build enough housing and enough of the RIGHT housing that Canadians need - (affordable, accessible, adequate). Estimates of the number of housing units that need to be built in Calgary to 2030 are at 3.5 million gap (CMHC – too low), 5 million gap (CIBC) and 9.6 million/4.4 million gap (Carolyn Whitzman for the Office of the Federal Housing Advocate) – see Rethinking Canada’s Target for 5.8 million homes by 2030 - by Steve Pomeroy. Canadian Housing Evidence Collective – February 2024 and my CHANGE.ORG petition UPDATE entitled Enough is enough! Canada’s housing crisis has reached catastrophic proportions. In Canada, we are LOSING affordable housing, NOT gaining it – the OPPOSITE of what Canadians have long needed it occurring – including as a result of financialization of housing.
Corporate investment in housing is leading to unaffordable rents, evictions and long-term care deaths - as per research before the Federal Housing Advocate. The Federal Housing Advocate speaks of Canada’s housing emergency, that Canada’s housing crisis has reached catastrophic proportions and that urgent, urgent action is needed to address financialization of housing - to stop the harm to individuals, families and communities.
Policy created financialization of housing and policy URGENTLY needs to END it – NOW. There is growing consensus in Canada for multipronged housing solutions involving DEMAND (rental protections, curb immigration,…) and SUPPLY (build the RIGHT supply for non-market, non-profit housing for low- and moderate-income households and priority populations – including as revealed by the HART Housing Assessment Resource Tool...).
Both the Federal Housing Advocate (page 21) and the United Nations recommend enduring rental controls/tenant protections/rent caps and steps to de-financialize housing in Canada. This is Important at a time of that approximately 29% of Calgary’s households rent and approximately 34% of Calgary’s renter households find shelter to be unaffordable [spend more than 30% of household income on shelter] See also NOTE1, further BELOW.
Have you noticed that governments and landlords seem to regularly NOT even mention the LOSS of affordable housing – including as may be identified by the HART Housing Needs Assessment Tool? It’s more than time to STOP THE LOSS.
Please write/call Federal/Provincial/Municipal politicians TODAY to summon the financialized landlords + DATA to the House of Commons to LOWER RENT-GOUGED RENT and to account for practices fostering the growing HOUSING EMERGENCY in Calgary, across Alberta and across Canada. Marie-Josée Houle, Federal Housing Advocate stated the following on May 9, 2023 during her testimony before the House of Commons HUMA Committee Review of financialization of housing, rent gouging, renovictions, and related issues:
- “I also urge the committee to call industry witnesses to account for their practices that undermine housing affordability, security of tenure and habitability, with data about their strategies and their profit margins.”
See the LIST of some CONTACTS in my CHANGE.ORG petition UPDATE entitled: “Urgent, urgent action to stop the harm and protect human rights” – re financialization of housing".
We can do this together! Please spread the word!
Anne Landry
Calgary, Alberta
EMAIL: Info@CalgariansForHousingRights.ca
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NOTE1 - See:
1. BRIEF by THE SHIFT (Leilani Farha – Global Director, Julieta Perucca – Deputy Director, Sam Freeman – Director of Legal Research & Advocacy) to the National Housing Council Review of purpose-built rental housing. “Moreover, the UN Guiding Principles on Business and Human Rights suggest that preventing human rights violations of tenants is required, and thus would trump fiduciary duty owed to shareholders, where there is a conflict between the two.” (at page 4) See Recommendations including rental protections at pages 13 to 15.
2. We all deserve homes and a stable climate – and that is achievable – The Globe and Mail – March 14, 2024. “Canada is projected to be short by roughly six million homes come 2030, according to Canada Mortgage and Housing Corp., if we hope to achieve affordability. That’s about one-third of our existing housing supply. These homes must get built. but if they are built to poor standards, or in areas with high climate risks, or using carbon-intensive techniques and materials, it could lead to 100 megatonnes of new, entirely unnecessary climate pollution a year….First we need to build up, rather than out. Focusing housing growth in cities and communities where there is existing infrastructure such as roads, water lines, libraries and community centres is faster, less costly and more climate-friendly…Second, we need our homes built to higher standard. They need to be more energy-efficient, meaning lower operating costs for tenants and a lower carbon footprint….Third, we need to innovate in how we build. In Sweden, more than 80 per cent of detached homes are built using factory-made components… Finally, we should stop putting new housing in areas at high risk of worsening climate effects. The most expensive home is the one we need to rebuild after extreme weather – just ask the thousands of Canadians faced with hundreds of millions of dollars in uninsured damages because of flooding in recent years…”
See REPORT: BLUEPRINT FOR MORE AND BETTER HOUSING-HOW FEDERAL, PROVINCIAL AND MUNICIPAL GOVERNMENTS CAN ENSURE WE BUILD 5.8 MILLION HOMES THAT ARE AFFORDABLE, LOW-CARBON AND RESILIENT – Task Force for Housing & Climate – March 2024 and at https://housingandclimate.ca/blueprint/ .
3. Rent controls work: They don’t reduce housing supply but they do limit profit – Toronto Star, Ricardo Tranjan Senior Researcher with Canadian Centre for Policy Alternatives and author of “The Tenant Class” – March 12, 2024. CMHC Research 2020 – SUMMARY & FULL REPORT – regarding a 50-year DATA time series including Calgary (as a control): “…There was no significant evidence that rental starts were lower in rent control markets than in no rent control market…This analysis supported the findings of another national-level study the CMHC commissioned in 1994. Authored by five economists, the study found no evidence that rent control changes how markets respond to vacancy rates. The study also found no evidence that rent controls lead landlords to let rental units fall into disrepair…In 2023, the prestigious International Journal of Housing Policy published an econometric analysis on a data set covering 16 countries over a period of more than 100 years. The study found no significant correlation between modern rent controls and the rate of rental housing construction. Interestingly, the study also found that even full-on rent freezes are not as scary as they are made out to be. The authors calculated that shifting from zero control to rent freezes decreases construction by six units per 100,000 in habitants per year – hardly a complete construction stopper….Rent controls limit profit, though. In Ontario, bringing back rent control in units built after 2018 ,would prevent rent gouging in the newer stock, helping to ensure that new units remain forever unaffordable. Between 2022 and 2023, landlords in Ontario increased rents in vacant units by an average of 36 per cent. Bringing back controls on vacant units would prevent abusive increases. It would also remove the financial incentive for evictions and other tactics used to displace tenants…Focusing housing debate on new supply is a cop-out. It keeps the attention on what should be built where. This focus on construction keeps us from having a much more difficult conversation: the conversation about limiting profit on existing rentals. Most politicians and housing pundits actively avoid talking about this, even if the evidence is in.” [Emphasis and link to econometric analysis added]
4. Proof Point: Canadian renters face high hurdles to accumulating wealth than homeowners – RBC, Carrie Freestone – March 14, 2024 “Proof Point: Canadian renters are getting squeezed more than homeowners, making home ownership an even more distant dream. This threatens renters’ path to accumulating wealth – which could exacerbate inequality over the longer term….Homeowners saw their net worth grow from nine times household disposable income to 13 times since the fourth quarter of 2010. For renters, the appreciation has been a fraction of that magnitude. Net worth grew from three times to 3.5 times over the same period excluding residential real estate owned by renters…And even though renters’ incomes have risen at the same pace as homeowners since the last 90s, the share of income that they allocate to housing has grown rapidly. In 1999, renters allocated an average of 25% of their take-home pay to housing costs including utilities. This was slightly more than homeowners, who devoted 23% of their take-home pay during the period. The gap has widened significantly. In 2022, renters devoted 29% of their after-tax earnings to housing compared to 21% for homeowners (who accumulate savings in the form of home equity through these allocations). Lower earnings and higher allocations to housing make it exceptionally difficult for renters to save for a downpayment – a crucial step in the path to wealth accumulation…Renters dissave to a greater extent because they are grappling with higher living and debt-servicing costs, making saving for a down-payment harder than ever. Only about one-third of Canadian income earning households earn enough to purchase a single-detached home on their income alone. This is a stark difference from 2005 when half of Canadians earned enough to purchase a home on just their income. More middle and upper-income earners could join the renting population if ownership affordability does not improve and more Canadians get priced out of the housing market…Canadians may not reach their savings goals in the absence of alternative vehicles for wealth accumulation. The risk of greater inequality between renters and homeowners is one of the many reasons why Canada must address its housing crisis.” [Emphasis added] See also: Canada’s next wealth divide? It’s renters versus homeowners RBC says – Global News – March 14, 2024
5. High rates and prices make it less affordable – RBC – December 20, 2023 “…At or near worst-ever affordability levels in many markets: The situation is particularly tense in Vancouver, Victoria and Toronto where the costs of owning a home are sky-high. Ottawa, Montreal and Halifax also face challenging affordability conditions. No exception to the recent deterioration: All markets we track saw their affordability measures rise in the third quarter. Vancouver and Toronto recorded the biggest increases…Calgary – Long-standing advantage is diminishing Calgary’s affordability position compares well to other major markets but its advantage is diminishing. RBC’s aggregate measure for the area jumped 3.0 percentage points in the third quarter—the third-largest increase among the markets we track. At 47.6%, the measure could soon surpass that in Ottawa as the fifth least favourable in the country. The rapid deterioration stems in part from tight demand-supply conditions. Calgary has been Canada’s housing hotspot in 2023. And with inventories persistently low, this has kept property values on a steady incline. We expect this uptrend to continue, though more balanced demand-supply conditions are likely to slow the pace down…” [Emphasis added]
6. As per Deloitte (page 26), Alberta needs 43,799 additional affordable units by 2030 to reach the OECD 7% target – the UCP Alberta Government is repeatedly NOT delivering –> promising only 13,000 affordable housing units in Alberta to 2032 as per the so called Stronger Foundations: Alberta’s 10-year strategy to improve and expand affordable housing.
7. In Calgary, buyers required an annual household income of $117,100 to qualify for a mortgage to buy the average priced home in the city in January, based on a 20 per cent down payment – this is despite the average price of a home increasing year over year $3,000 to $557,500 a buyer would need $3,350 less annual income to qualify – “The reason being is the stress test, set by the Office of the Superintendent of Financial Institutions, decreased to 7.71 per cent in January from 8.16 per cent the previous year.” See in: January sees drop in income required to pass mortgage stress test – Calgary Herald – March 7, 2024
8. Rentals.ca March 2024 report: Average rent for 1 bedroom apartment in Calgary is $1,816 per month – an annual household income of $72,640 per year ([$1,816/0.30] X12) is required to afford a 1 Bedroom apartment in Calgary – as per the CMHC standard definition of affordable housing by which housing is considered “affordable” if it costs less than 30% of a household’s before-tax income for a full continuum of housing options from homelessness to market rent and market home ownership. The annual household income of $72,640 in Calgary is more than the median household income of $66,000 of renters. In Calgary 126,120 (22%) of households cannot afford rent including 42% of households earning $99,999 and under per year VS 3.1% of households earning $100,000 and over (Statistics Canada Census 2021 - Source: CENSUS 2021 - Table 98-10-0252-01 Shelter-cost-to-income ratio by tenure: Canada, provinces and territories, census metropolitan areas and census agglomerations.
9. $1,816 per month average rent in Calgary occurs at a time that there are over 50,000 households in Calgary in CORE housing need needing rent of $1,262 per month or less – with “their backs against the wall/perched on the edge of the cliff” for whom an increase in rent may result in homelessness –(Calgary Census Division, Census 2021 - https://hart.ubc.ca/housing-needs-assessment-tool/)
10. Calgary’s HIGH income inequality: The Median Pre-Tax Income of the BOTTOM 90% income group of income filers is $39,600/per year (Statistics Canada, Census 2021) A rent of $990 per month would be affordable at a median annual income of $39,600 as per the standard CMHC definition of affordable housing > 30% of $39,600 = $11,880 per year => $990/per month. The threshold in Calgary between the BOTTOM 90% and TOP 10% of income tax filers is $127,000 per year. There are 1,024,370 income tax filers in the BOTTOM 90% income group – thus half of them – i.e. below the “median” - would NOT find a rent of $990/month to be affordable. There are 113,820 tax filers in the TOP 10% of income tax filers. Sources: Statistics Canada. Table 11-10-0056-01 High income tax filers in Canada, specific geographic area thresholds - CUSTOM TABLE 1, 2017 to 2021 & CUSTOM TABLE 2, 2017 to 2021.
11. It’s crazy right now’: House flipping surges to new heights in Calgary’s red-hot real estate market – CBC – March 15, 2024. “…House flipping in Calgary's red-hot real estate market has surged to the highest level of any major metropolitan area in the country, according to new data from the Bank of Canada. The latest statistics show 6.5 per cent of homes sold in the Calgary metropolitan area were resold within 12 months. That's the highest level in any major city at any point since at least 2014, which is as far back as the bank's public-facing data goes…” See also: Looking for a house in Calgary? It’ll continue to be a seller’s market, new forecast says – CBC – January 23, 2024
12. Greedy landlords are a apart of the unaffordable rent story in Canada – The Globe and Mail, Rob Carrick – January 10, 2023 “…There’s an exasperating level of political ineffectuality on improving things for renters, so blame politicians for the rental mess. Blame the inflation surge that required higher interest rates. And, blame the landlords who are squeezing harder than they have to in order to profit in a market starving for affordable accommodations…”
13. See also:
CMHC Housing Market Outlook – April 27, 2023 ;
CREB FORECAST – Calgary & Region Yearly Outlook Report - 2024
CREB City of Calgary Monthly Statistics, Summary – February 2024
Row house construction up 37% in Calgary as builders and buyers seek more affordable options – CBC – October 5, 2023: “The CMHC released its latest report on housing starts Thursday, which showed construction of single-family homes in Calgary and the surrounding area was down 13 per cent in the first half of 2023, while construction of row houses was up 37 per cent compared to the same period last year... Row house construction is surging in Calgary, as builders and buyers look for more affordable options amid a triple whammy of construction costs, interest rates and purchase prices all rising simultaneously in the city. "We've seen a bit of a shift away in demand, at least temporarily, from the more expensive single-detached homes," said Taylor Pardy, a market analyst with the Canada Mortgage and Housing Corporation (CMHC)… Apartment construction accounted for the largest chunk of new homes being built, with 3,506 units out of the total of 8,106 housing starts in the first half of the year. That's about the same as last year. The CMHC noted more than half of those units are purpose-built rental apartments, which is the first time Calgary has seen a majority of apartment-style units being built for rent rather than for purchase. ‘This is encouraging news for purpose-built rental supply and affordability in Calgary,’ the report says….It costs about 77 per cent more to build a home in Calgary today than it did in 2017. The cost of building grew rapidly during the pandemic and, while the rate of increase has slowed in Calgary, it remains far more expensive to build now than it was just a few years ago. ‘This escalation largely reflected strong demand for new housing and renovations during the COVID-19 pandemic, which drove up demand (and prices) for labour and materials,’ the CMHC report reads. ‘It also reflected supply chain disruptions caused by the pandemic.’ When it comes to residential construction in Calgary, the cost of wood, plastics and composites has seen the largest increase — nearly quadrupling from 2017. The demand for multi-family housing was also seen in the latest market report from the Calgary Real Estate Board (CREB). While benchmark prices were up across the board in September, prices for row houses grew the fastest — up 17.2 per cent, year over year, to $419,400. ‘Price gains [for row houses] have occurred across all districts, with the most significant gains occurring in the most affordable districts in the city,’ the CREB report reads. Apartment-style condos, meanwhile, increased 14.9 per cent to $312,800…Semi-detached houses, meanwhile, were up 11 per cent to $621,300 and single-detached houses increased 11.1 per cent to $696,100.” [Emphasis added]