Housing: Right or Privilege?

by Eduardo del Buey

Housing: Right or Privilege?

In Canada, the major party candidates are addressing the housing crisis as the country heads toward a federal election.

Each party leader has suggested solutions to the issue, including building prefabricated homes, easing construction regulations, and reducing taxes on new housing.

However, little can be achieved unless the root causes of the housing shortages are addressed.

The first issue contributing to the housing shortage is Canada’s immigration policy.

In an article for The Toronto Star, Nicholas Keung and Nathan Pilla report that the immigration rate increased in 2023.

Amid public outcry over rising interest rates and the cost of living, critics have shifted their focus to immigration.

The country's ability to absorb newcomers has come under scrutiny, and the use of immigration as an economic stimulus tool has been questioned.

According to Alicia Planincic, director of policy and economics at the Business Council of Alberta, rather than selecting skilled economic immigrants with high scores under the points selection system, targeted draws were introduced in 2023 to favor candidates with lower scores who work in in-demand occupations or who are proficient in French.

"We are not selecting the best of the best," Planincic remarked. "The intent is to meet labor market needs, but it really muddies the waters, especially when the categories can change with political whims."

A consequence of the significant rise in immigration by individuals who cannot compete financially with Canadian residents is competition for limited affordable housing.

Another issue hindering affordable housing is the shift of housing from an achievable goal for all citizens to a source of income for investors.

Professor David Wachsmuth at McGill University holds the Canada Research Chair in Urban Governance and conducted a study on the impact of short-term rentals in Canada. He concluded that this relatively new revenue source for landlords has significantly contributed to the financialization of housing across the country, treating it as a commodity and a means for profit and investment rather than a social necessity.

He discovered that most short-term rentals are owned by large companies instead of private individuals, and that financial incentives have considerably pressured housing availability as more long-term rentals are transformed into short-term ones.

Indeed, as companies like Airbnb dominate thousands of properties for short-term, high-income rentals, traditional renters are left out in the cold. Canada has 204,859 active Airbnb listings, approximately 36% of which contain a short-term rental license in their descriptions.

A quick scan of Airbnb shows two-bedroom apartments on Ontario Street in Montreal listed for between $265 and $460 a night in July. Single rooms are more affordable, priced at around $100. However, a renovated three-bedroom apartment could fetch over $10,000 a month during the summer.

Additionally, as of 2021, investors owned between 14% and 26% of all houses, including single-detached, semi-detached, and row houses, across each province, as well as between 30% and 42% of condo apartments in British Columbia, Manitoba, and Ontario.

When housing is seen as an income-generating commodity instead of a basic necessity, many individuals are compelled to live at home with their parents, in shared spaces, or worse yet, on the streets or in shelters.

Young people with limited incomes cannot aspire to homeownership as speculators drive prices astronomically, resulting in a corresponding rise in rental costs.

As stated, the housing situation stems from several detrimental policies unrelated to construction.

Unless these policies are revised to restrict immigration to those who can rapidly assimilate and contribute fully to Canada’s economy and limit home ownership to those who plan to occupy those homes, the problem will persist.