Housing Crisis Recent History

The evidence of the housing crisis in Nova Scotia is as close as our neighborhood park. This crisis has been building for many years. This article reviews some analysis and proposals from a few years ago. 

Ball Park Housing Crisis

Michal Rozworski writing in Policynote, in 2019, locates the roots of our housing crisis in austerity, debt and extreme speculation.

In 1993, the last federal budget tabled by Brian Mulroney’s Progressive Conservative government ended all new federal funding for social housing construction outside of First Nations reserves. The feds were out of the business of creating new social housing, as they put it. This was a marked change from previous decades when the federal government helped finance about 20,000 units of social housing per year—from direct public housing in the 1960s and into the ‘70s to non-profit and co-op housing in the 1980s. In most provinces outside BC and Quebec, provincial governments did not pick up the slack following the 1993 announcement.

Post War Housing

 

With the sudden imposition of social housing austerity, the Canada Mortgage and Housing Corporation (CMHC) shifted from homebuilder to mortgage insurer. The move away from direct and indirect public provision only further solidified long-standing economic and cultural pressures toward home ownership. And with this move the federal government only accelerated the transformation of housing from human necessity into investment good, to be supplied almost exclusively by the private sector. (Rozworski, 2019)

Joel Roberts reporting for the Breach, in 2021, suggests that fixing Canada’s housing crisis will require bold socialist politics. He suggests that politicians have finally taken note of the crisis. But they aren’t offering real change.

Canada’s housing crisis demands bold transformation, and a good place to start would be dramatically increasing federal spending on social housing whose rent is geared to income. That would provide immediate relief for the hundreds of thousands on waiting lists. 

Furthermore, we desperately need a large-scale community-based land acquisition strategy based on sustainable living, not returns for investors. The strategy should empower community-based land trusts to create permanently affordable, energy-efficient, community-oriented rental housing en masse. If the federal government can find $150 billion to buy government-insured mortgages during the pandemic, it should have no trouble financing this transformation of rental housing.  

Beyond a major revitalization of the social and community housing sector, we also need robust inclusionary zoning targets for private-sector housing, stronger rental protections for tenants, and emergency funding for shelters and transitional housing operations. 

But what politicians are hesitant to tell you is that the housing crisis goes beyond housing. If we are to address the affordability crisis in rental markets, house prices will likely fall. More bold housing policies are thus unlikely to find much favour among homeowners who increasingly rely on rising prices to secure their retirement or to access further bank credit. As the Parliamentary Secretary on Housing put it in a recent interview: “We know that Canadians rely on homeownership to secure their place in the economy.” (Roberts, 2021)

Roberts Recommendations

Increasing federal spending on social housing

Zoning targets for private-sector housing

Stronger rental protections

Emergency funding for shelters

Alex Cooke of Global News , in 2021, asked how did Nova Scotia get to the point where there are hundreds of people at night with no place to go?

The answer to that question is multi-faceted, says Jeff Karabanow, and the issue has been decades in the making.

Karabanow, a professor of social work at Dalhousie University, said advocates have been arguing for decades for municipal and provincial governments to create more affordable housing.

Now, people are paying the price for the “inactivity and inaction” around affordable housing.

“We’ve been very, very concerned for a long time that there is going to be an explosion on the streets if we couldn’t wrap our heads around some form of rapid-styled affordability housing that has supports embedded in it, that has to be taken by the province as the lead,” he said.

Add that to the stagnation of wages, the skyrocketing cost of living, and housing increasingly being seen as an investment opportunity rather than a social good, and we’ve created a “perfect storm” for the crisis we’re seeing today, he said — a crisis that shouldn’t exist in a rich country like Canada.

“We live in such a rich and fairly safe environment … especially Nova Scotia, where the numbers aren’t huge yet, we can really be providing everybody who needs, wants, some form of safe, stable housing. We could be providing that pretty easily,” he said.

“I think it’s become, for me, just a sense of inequity and injustice.” (Cooke, 2021)

Karabanow’s “Perfect Storm”:

Stagnation of wages

Skyrocketing cost of living

Housing as investment rather than social good

Perfect Storm around housing

The analysis of the housing crisis in these articles from 2019 and 2021 have identified the need for investment by government in affordable rental housing to rectify the inequity and injustice that continues to increase the number of homeless people in Nova Scotia.

References

Cooke, A. (2021, December 1). Nova Scotia's housing crisis: How the emergency has reached a boiling point - Halifax | Globalnews.ca. Global News. Retrieved September 5, 2023, from https://globalnews.ca/news/8413242/halifax-nova-scotia-housing-crisis-day-1-global-series/ 

Roberts, J. (2021, September 17). Fixing Canada's housing crisis will require bold socialist politics ⋆ The Breach. The Breach. Retrieved September 5, 2023, from https://breachmedia.ca/fixing-canadas-housing-crisis-will-require-bold-socialist-politics/ 

Rozworski, M. (2019, June 14). The roots of our housing crisis: Austerity, debt and extreme speculation. Policy Note. Retrieved September 5, 2023, from https://www.policynote.ca/the-roots-of-our-housing-crisis-austerity-debt-and-extreme-speculation/ 

Supply or Speculation

A plan to alleviate the shortage of housing in Canada is likely to be mentioned in the political platforms of all persons seeking election federally, provincially, and in municipalities. The plans may differ depending on the understanding of the authors about the root cause of the shortage.

Affordable Housing For Canadians

Commentary from the RateSpy website in 2020 underlined the importance of supply and the Law of Supply and Demand in the availability and affordability of housing in Canada.

On that note, an IMF report last October had a radical solution to Canada’s housing crisis: “ To Tackle Housing Affordability in Canada, Build More Houses.” Hey, they might be onto something.

In truth, there’s no easy cure that doesn’t disadvantage someone. Real progress takes hard fixes, like incentivizing more homes within tolerable commutes to job centres, building ultra-high-speed transit to regions with cheaper land, or other capital, time or bureaucratic-intensive solutions. Or maybe it takes more out-of-the-box thinking, like government land acquisition partnerships or near-interest free financing to developers that build strategic high-density housing in/near public transportation corridors.

The Department of Finance has said it many times; home construction is “needed to address…housing supply shortages in Canada, particularly in our largest cities.” The 2019 Federal Budget stated that increasing the supply of housing “is the most effective way to address affordability in the long run.” Righto. Because whatever the solution, supply is the problem, and it has been for 20 years. (Who Repealed the Law of Supply and Demand?, 2020)

Steve Pomeroy, Industry Professor, Department of Health Aging and Society, McMaster University, advises to solve the housing problem we need to address supercharged demand.

If policy-makers and the newly re-elected government want to improve housing affordability and the ability of young families to become homeowners, they need to turn their attention to the primary driver of price increases — super-charged demand, abetted by the sacred cow of non-taxation of capital gains on a principal residence.(Pomeroy, 2021)

Mark Morris, who has established and sold numerous businesses in the legal space and is presently the principal lawyer at LegalClosing.ca and runs and operates LegalReview.ca, shares the opinion that we need governments that can refocus economic incentives around real business value and promote programs that foster enduring products and services with economic potential beyond Airbnb. This will involve unwinding any number of perverse incentives designed to foster real estate growth at the expense of everything else.

Or consider the principal residence exemption, which is usable over and over again by individuals for any amount of money garnered from the sale of their home, as long as they lived in it. Compare that to the sale of shares of an active Canadian business, which is tax-free only on an amount of less than a million dollars and, even then, is only available for use once in a lifetime. 

These perverse incentives exist throughout our system and need to be addressed if this country is to continue to remain on course.

Canada is hooked on real estate. We need to detox fast for our sake, for our children's future and, above all, for all future aspiring business creators who would seek to develop their skills in a system that encourages rather than punishes their efforts. (Morris, 2022)

Adena Ali, of the The Canadian Press, reported that, according to the CMHC, Canada needs 5.8 million new homes by 2030.

If current rates of new construction continue, CMHC said the country's housing stock is expected to increase by 2.3 million units by 2030, reaching close to 19 million units total. But in order to achieve affordability for all Canadians, the agency said an additional 3.5 million homes are needed.

Softening housing market conditions and a labour shortage in the construction sector could get in the way of bringing Canada's housing stock to more than 22 million by 2030, however.

"There are supply issues, labour shortages at the moment and the cost of financing is going up, so clearly there are short-term challenges," said CMHC deputy chief economist Aled ab Iorwerth during a conference call.

BMO economist Robert Kavcic says it will be tough to achieve what the CMHC wants to achieve.

"The jobless rate in construction is near a record low; vacancies are at a record high, we have a deep shortage of skilled trades, and the cost of building materials is already rising quickly," he said. "So, unless the economy really rolls over and is in need of stimulus, effectively doubling the rate of new construction over the next decade will be extremely difficult without significant inflationary pressure." (Ali, 2022)

Supply, speculation, demand, and the lack of taxes on the sale of principal residences are cited as contributors to the shortage of available housing in Canada. In the next election cycles, we expect the successful candidates will support policy to tackle this disastrous situation.

References

Ali, A. (2022, June 23). Canada needs 5.8 million new homes by 2030 to tackle affordability crisis, CMHC warns. CBC. Retrieved August 26, 2023, from https://www.cbc.ca/news/canada/toronto/housing-affordability-cmhc-report-2030-1.6498898 

Morris, M. (2022, June 21). Canada is hooked on real estate. It needs a detox. CBC. Retrieved August 26, 2023, from https://www.cbc.ca/news/opinion/opinion-canada-real-estate-addiction-morris-1.6492967 

Pomeroy, S. (2021, November 25). Want to solve the housing crisis? Address super-charged demand. The Conversation. Retrieved August 26, 2023, from https://theconversation.com/want-to-solve-the-housing-crisis-address-super-charged-demand-169809 

Who Repealed the Law of Supply and Demand? (2020, September 16). Ratespy.com. Retrieved August 26, 2023, from https://www.ratespy.com/who-repealed-the-law-of-supply-and-demand-opinion-091615871 

Fiona Flood Fire and Franklin

The F’s have had a lot of influence on our Maritime quality of life while racking up enormous bills for recovery. Anne Shibata Casselman, writing in McLeans, identifies our time as a weird century of fire, biblical floods, dying forests, retreating coasts, economic turmoil, and political unrest.

Concern about Climate Change

Armel Castellan’s job to know the weather 24/7, Environment and Climate Change Canada’s disaster preparedness meteorologist for B.C. and Yukon, hydrated between speaking to the New York Times and Reuters. At night, he set up a tent in his backyard so his three young children’s bodies could cool down. When Victoria set a record high of 39.8 degrees, he tried not to think too hard about what that meant for the future his kids would inherit.

In other words, more heat domes are inevitable—as are many more extreme events and disasters that were once unimaginable. By the time we reach two degrees, our Great White North will look like the Great Wet North, as precipitation increases and winter’s edge is blunted. The summertime flow of rivers that bring water to prairie cities will decline. Rain, heat and hail will be biblical in scale, with no god to blame. Wildfires will burn hotter, larger and longer, poisoning the air for millions and potentially hastening the decline of our vast northern forests, which will already be stressed by rising temperatures. These disasters will lead in turn to declines in prosperity, productivity, well-being, social cohesion and physical health. Even the unborn won’t escape: in-utero exposure to wildfire smoke, for example, will leave an indelible, lifelong mark on babies’ health. (Casselman & Dyck, n.d.)

Ian Fairclough, a multimedia journalist, with SaltWire, interviewed  Kate Ervine, a professor in the global development studies department at Saint Mary’s University, who says many impacts of climate change have an effect on the fire season.

“Looking at these things globally, whether it’s the wildfires, or the extreme heatwaves, or the droughts, or the flooding and record ocean temperatures, we’re seeing all these cascading events that are intensifying year on year,” 

“Fossil fuels are the primary source of carbon dioxide in the atmosphere and stay there for hundreds to thousands of years, so the CO2 that was emitted during the industrial age, there’s a good chance it’s with us today, and what we’re burning in our coal-fired power plant today is going to be around for hundreds of years,” “It’s a cumulative problem.”

“As it accumulates in the atmosphere, we’re now starting to see the much more intense repercussions in terms of all the events we’re (experiencing).” (Fairclough, 2023)

Ervine notes that when she’s out in the community she’s hearing more conversations about climate, and “it seems like the mainstream discussion of climate change is here now because people are seeing it and they’re feeling it.”

Jagmeet Singh in an Opinion Piece for the National Observer, proposes action for the people of Canada.

There is a lot of work ahead of us, and we will not achieve it with half-measures or attempts to divide Canadians. The federal government must work with all levels of government and community leaders to ensure that when climate disasters strike, communities have the resources they need to protect themselves.

We must work together to address the climate crisis — both to reduce our emissions and increase renewable energy. It will not be enough to set ambitious targets. We must also have a plan to meet them and the investments that it takes to prevent even more catastrophic climate disasters.

We must ramp up efforts to make our homes and communities as safe as possible from the climate emergency that is threatening all of us. There is no more time to waste arguing over the science of climate change when the results are right in front of us. (Singh & Fawcett, 2023)

Max Fawcett shares his opinion in the National Observer, that Pierre Poilievre’s version of the CPC has made its indifference to climate change a key selling feature to its base.

 

That sales job seems to be working, too. According to an Aug. 9 EKOS poll, just 24 per cent of CPC voters assign a “high extent” of responsibility for the surge in wildfires to climate change compared to 91 per cent for people who vote NDP, 88 per cent for Liberal supporters and 81 per cent for the BQ. (Fawcett & Saxifrage, 2023)

Climate Change Attention	Climate Change Conservatives
Kelowna under a state of emergency after wildfire in West Kelowna exploded	Kelowna MP, Tracy Gray “Canadians cannot afford Trudeau's carbon tax.
19,000 residents of Yellowknife were ordered to evacuate as another huge fire bore down on their community.	Poilievre postponed his Aug. 24 “axe the tax” rally in Whitehorse due to the wildfires
Market-led transition @BloombergNEF  expects 20 million barrels/day of oil demand destruction by 2040.	Refuse to entertain the possibility that demand for Canada’s oil and gas could decline dramatically in the near future
Invested in protecting the people and communities oil and gas emissions put at risk.	Invested in protecting the oil and gas industry’s status quo

As we struggle to cope with the disastrous climate events of the past year, we can not longer delay development of mitigation and adaptation strategies to reduce destruction of our environment and our quality of life.

References

Casselman, A. S., & Dyck, D. (n.d.). Canada in the Year 2060. Macleans.ca. Retrieved August 23, 2023, from https://macleans.ca/society/environment/canada-in-the-year-2060/ 

Fairclough, I. (2023, August 21). Wildfires have always happened, but climate change is making them worse. SaltWire. Retrieved August 23, 2023, from https://www.saltwire.com/atlantic-canada/news/wildfires-have-always-happened-but-climate-change-is-making-them-worse-100884746/ 

Fawcett, M., & Saxifrage, B. (2023, August 22). Conservatives tweet while Canada burns | Canada's National Observer: News & Analysis. National Observer. Retrieved August 23, 2023, from https://www.nationalobserver.com/2023/08/22/opinion/pierre-poilievre-conservatives-tweet-while-canada-burns? 

Singh, J., & Fawcett, M. (2023, August 22). The climate crisis is here. It's time to act like it: Jagmeet Singh. National Observer. Retrieved August 23, 2023, from https://www.nationalobserver.com/2023/08/22/opinion/climate-crisis-here-its-time-act-it