Condon: Govt should supply housing for up to 40 percent of Vancouver wage earners

By Patrick Condon, Professor of Urban Design, UBC

I am now of the mind that since the real estate market has been effectively globalized, and since the global market for real estate is also distorted by black money seeking a safe harbour, cities like Vancouver have only two choices.

1. Retain a faith in the global market economy and assume that the rules of supply and demand still apply. In this view we need only to reduce regulations that block the free flow of capital into housing. In this view the city can also tax this money flow to supply decent housing for those who fall below the 20 percent of average income line (this explains the target of 20% affordable housing in many city policies). The city has largely assumed this strategy was the most propitious. Their recent housing reset moves away from this faith to some, but not to the full, extent.

2. Assume that the new realities of the global marketplace have fundamentally distorted the real estate market such that housing has been irrevocably removed from its traditional connection to average family income. In this view the market can never be depended on to supply affordable housing, not just for those below the 20 percent line, but even for those making more than the median (50%) family income. This means that more than half of our citizens can’t be housed by the market. That’s the majority.

I am in the camp that thinks number two is more descriptive of our current Vancouver reality. It is also why I think we are now in a situation where it is necessary for government to supply supported housing for up to 40 percent of people who work in our city. This may seem radical since neoliberal policies have convinced governments around the world to hand over all responsibility for housing to the market (England housed over 42 percent of its people in council housing in 1979. Its 8 percent now. Vienna still houses over 60 percent of its wage earners in supported housing).

In this neoliberal view the market is the only efficient supplier of housing, while those who were desperate or disabled could be given vouchers to be able to participate in the market as well. That may have been true 40 years ago when the neo liberal philosophy was first ascendant under Reagan and Thatcher. It’s not so true now.

Thus, our choices seem to be:

1. Ignoring the problem and letting Vancouver turn into nothing more than a cash box for international capital,
2. Supplying massive subsidies to our wage earners to be able to compete with global capital flows in the marketplace for housing, and
3. Return to a more active government role in providing affordable (not free by any means) housing for wage earners, akin to the post WWII era in England.

Stated this way, number three, despite the fact it would be a really hard climb, seems like the only pathway to a city still worth living in.

[Photo Credit: City of Vancouver]

7 Responses to Condon: Govt should supply housing for up to 40 percent of Vancouver wage earners

  1. nonconfidencevote says:

    Respectfully.
    I disagree.
    Spineless politicians for years have kicked this can down the road
    Govt inaction on ALL levels of govt created this mess and now we are expecting them to fix it by subsidizing housing?
    One can only imagine the size of the beaurocracy it would take to decide who is eligible and who isnt.
    No.
    Foreign ownership should be banned in a similar fashion like Australia and New Zealand. 35 million Canadian purchasers cant compete with 1 billion Chinese.
    Real Estate Sales should be wide open. Price history for a house, Sales history, , Days on the market, relistings, on and on and on. The information most important to BUYERS is withheld by the very same commisioned real easte sales cartel that insists ad nauseum that it is in the clients best interests to withold information ( Gee the big fat juicy sales commision wouldnt have ANYTHING to do with it…would it ?)
    The current information MONOPOLY that the Real estate industry( and the compliantly silent main stream media sellout via advertisment revenues)should end.
    And if the recent Court ruling in Ontario is any indication….
    Toronto Real Estate Board Lost AGAIN
    Real Estate cartels Canada wide will be dragged kicking and screaming into the internet era.
    Dissolve CMHC…mortgage ganrantees… its not needed.
    Guaranteeing Canadian mortgages with the Banks has only made money lending and mortgages reckless, unaffordable and ubiquitous.
    No more. End it.
    G20 mortgage stress tests starting Jan 1, rising interest rates in Jan 2018, will help to bring this ridiculous ponzi game to an end.
    Not MORE incompetant , lazy beaurocrats
    It cant come soon enough for most Canadians

  2. Andrew Browne says:

    This reads essentially like: ‘We’ve tried absolutely nothing and we’re all out of ideas!” I wouldn’t be so quick to jump from “the market is distorted” to therefore “we must rely on government to supply the majority of housing”. The government has policy levers that they have not pulled – for example, banning permanent residents and non-citizens from owning real estate, among others – and so the state of affairs to my mind is that successive governments at all levels have not cared to actually change the trajectory we find ourselves on.

  3. Retired prof says:

    After 10 years as a professor of management from a Canadian university, living and working in a joint program in China, I am amazed that Canada has not implemented controls against foreign ownership of residential real estate.

    As a Canadian, I cannot purchase residential real estate in Beijing unless I meet very restrictive conditions, effectively precluding me purchasing. Many large cities in China have experienced rampant prices escalation of residential real estate and, as a result, have implemented laws that prevent “foreign” ownership. The definition of “foreign” includes people from other parts of China. Hence, not only can I not purchase, neither can the vast majority of Chinese citizens who are coming from other cities. As a result, all of those excluded Chinese citizens look elsewhere, such as Canada, where there are no restrictions. Canadian residential real estate has become a commodity where offshore money has met its path of least resistance.

  4. Mary Jane Nelson says:

    It’s amazing to watch all this head-scratching – pity the poor government and policy makers that didn’t see this coming. It has been blatantly obvious what’s going on in this age of globalisation. Begin with the introduction of the IIP leading to all levels of government aiding and abetting all corrupt money into the housing market/casino economy.

    Why did the Feds stop participating in Co-op Housing? There once was a way for people to have stable housing but Feds decided to hand everything over to the dog-eat-dog free market. Can’t even pretend this is incompetence but rather a deliberate siphoning off public funds to the highest bidder.

    • Patrick Condon says:

      Mary.

      Government abandoned housing because they adopted the neo liberal belief that the market could always do it better.

      • nonconfidencevote says:

        Neo liberal? Or neo Con financial doctrine?

        Or as Mary stated.

        The govt needed the funds to “balance” the budget in an election year?.

        Proving, once again.
        Anything the the private sector can do….the govt cant do as well.

  5. Eric says:

    The Liberal federal government òf Paul Martin dropped social housing expenditures during a time when it made substantial progress on reducing the federal deficit and debt.

    At the time Quebec was complaining that the federal government was intruding in provincial rights and housing was a provincial issue. Quebec, Ontario and British Columbia continued to receive some federal money for programmes that were underway.

    The federal government at that time was not of the opinion that the market could do better. The country was deep in debt and the federal government wanted to get the finances of Canada back from what many thought was a dangerous situation. Stepping back from housing also eased political friction with Quebec.

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