Report lays out options on the table
The disproportionate focus on supply solutions might be overshadowing other potentially effective approaches to the housing affordability crisis, according to the Canadian Centre for Policy Alternatives.
This is especially apparent in the rental market, where affordability gets corroded by various factors like the absence of purpose-built, rent-controlled, and non-market units; and lack of consumer-focused regulation in rental housing.
“The mess in which we find ourselves is due to bosses keeping wages down, with help from provincial governments that set the minimum wage and federal governments that control monetary policy,” the CCPA said.
“It’s also due to governments’ collective failure to build, finance, and acquire the right kinds of rental housing, which is compounded by landlords who use their political influence to weaken rental market regulations, allowing them to increase rents and profit margins.”
Minimum wage earners in Canada’s largest metro areas need to spend more than 30% of their income in order to rent a modest apartment. https://t.co/zO9wqQOx7Q pic.twitter.com/tsM8ifN9G6
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 23, 2019
The CCPA characterized the “overemphasis” on the supply side of the housing crisis as “a political choice.”
“If we believe lack of supply is the sole cause of skyrocketing rents, the solution is building more,” the CCPA said. “If we build more but rents continue to go up, we must not be building enough… Governments must provide financial and regulatory incentives to developers, the argument goes, and weaken rent controls, like the Ontario government is doing, so that landlords find the business more attractive.”
While addressing supply issues is necessary, the CCPA said that policymakers should not wash their hands clean of the responsibility of making stronger responses.
“It matters what gets built, where, and under which regulatory framework,” the CCPA said. “To directly improve affordability for low- and moderate-income families, governments must focus their dollars on financing, building, and acquiring purpose-built, rent-controlled, and non-market housing that provide fairly priced rents – now and in the long term.”
“They must also properly regulate the rental market by fully implementing rent controls on occupied and vacant units and abolishing above-guideline rent increase loopholes.”
