Housing construction in Canada has not kept pace with population growth since the early 1970s. But despite the evidence and the realization that insufficient housing supply has contributed the most to worsening housing affordability, Prime Minister Justin Trudeau is now blaming investors and corporations for contributing to the crisis.
Trudeau believes housing has been commodified by investors and corporations that use “homes as an investment vehicle — rather than families using them as a place to live, grow their lives and build equity for their future.”
The prime minister’s comments, which reflect his understanding of the housing crisis, or lack thereof, should alarm Canadians, especially those facing acute affordability challenges. Canada Mortgage and Housing Corp. (CMHC), the federal government’s housing agency, believes 5.8 million homes must be constructed by 2030 to restore housing affordability. CMHC further estimates, rather conservatively, that this construction will require more than $1 trillion.
If it doesn’t come from investors, where will $1-trillion-plus come from in the next eight years?
Trudeau was in Brampton, Ont., announcing $114 million in funding for housing initiatives from his government’s $4-billion Housing Accelerator Fund when he made his comments this week. Now, $4 billion may sound like a lot, but the cost to build enough housing to restore affordability is more than $1 trillion, leaving someone, somewhere, to come up with the other $996 billion.
If the prime minister truly believes housing investors are part of the problem, Canada’s housing woes are likely to worsen, and the targets to restore affordability will certainly remain elusive. Vilifying investors is why investment in housing in this country has been lacking for decades. His comments do not help at a time when the nation desperately seeks housing investment on an unprecedented scale.
Trudeau could have been justified in his critique of investors if he had identified alternative funding sources. But he didn’t.
Let’s face it, housing is a commodity. Homes are bought, leased and sold. Every housing transaction involves an exchange of money. To suggest anything but is a disservice to the nation’s unmet housing needs.
Housing in great cities has historically been financed by investors. Even Paris is no exception. In 2018, we wrote about how the much-admired built form of Paris was a result of investments by, you guessed it, investors and speculators.
In Selling Paris, University of Manchester professor Alexia Yates chronicled “the people, practices, and politics that spurred the largest building boom of the nineteenth century, turning city-making into big business in the French capital.” She described “the ways housing and property became commodities during a crucial period of (French) urbanization.”