The federal government used to build social housing. Then it stopped. How is that going?

Many agree we’re in the middle of a national housing crisis. So how did we get here?

It depends on who you ask, but for many housing experts, affordability advocates and municipal officials, the answer lies in part with a policy shift consecutive federal governments joined decades ago. A shift that some argue provides clues on how to fix the current housing conundrum.

Despite the prime minister’s assertion earlier this month that housing isn’t primarily a federal responsibility, it hasn’t always been that way. 

Canada had long provided subsidized housing for people who couldn’t afford to pay market value: for workers and returning veterans after the Second World War, for example, and in the 1970s and early 80s as pressure mounted for Ottawa to intervene during a series of recessions.

In the early to mid-1990s, back-to-back governments of different political stripes — first the Conservative government under Brian Mulroney and then Jean Chretien’s Liberals — began pulling back from the business of affordable housing.

Facing big deficits and with neoliberalism taking hold globally, Ottawa reduced spending on housing, cut the federal co-operative housing program (one that saw the construction of nearly 60,000 homes) and eventually pulled the plug on building any new affordable housing units altogether. 

We now have a 30 year deficit in non-market housing, said Andy Yan, director of the city program at Simon Fraser University. 

“We’re dealing with the consequences now,” said Yan. “Specific populations are struggling for housing that is affordable, that has some kind of relationship to their income.”

“We see who’s paying the price on our streets in Canada.” 

Canada’s housing crisis has been the Liberal government’s priority at this week’s cabinet retreat in Charlottetown, P.E.l., with the country’s housing minister, Sean Fraser, even suggesting the the federal government is considering a cap on the number of international students to ease the pressure on the housing market. 

According to the Canada Mortgage and Housing Corp. (CMHC), Canada needs to build 5.8 million new homes — including two million rental units — by 2030 to tackle housing affordability.

Municipalities left to manage housing file

It’s not just the federal government that’s passed the buck on affordable housing. Over a number of years in the late 90s and early 2000s, the Conservative government in Ontario, under Mike Harris, passed the file to municipalities to manage.

“Devolving responsibility in itself is not a problem,” said Murtaza Haider, professor of data science and real estate management at Toronto Metropolitan University. That is, of course, “if it is accompanied by giving more resources,” he said.

And according to Haider, that hasn’t happened.

“Responsibility for social housing ended up with local governments despite their severely constrained revenue base,” he said. “Municipal governments get 10 per cent of the taxes we pay. 90 per cent of our taxes go to the feds and the provinces.”

In 2017, the federal government announced it was “re-engaging in affordable housing through the National Housing Strategy,” and said it would invest more than $82B over 10 years to “build stronger communities and help Canadians across the country access a safe, affordable home.” 

“But the realization is that the demand for such housing far exceeds the supply and the subsidies and the support that the three tiers of governments are providing,” said Haider.

At 86, Milton Mayor Gord Krantz is familiar with changing policies and philosophies on social housing. Krantz is Canada’s longest serving mayor, having been in the seat since 1980. He was a town councillor for 15 years before that.

“Downloading usually will start at the top,” he said. “The federal government is the top of the food chain. They downloaded on the province and then the province downloads on municipalities. We’re the end of the food chain.”

But all levels of government need to come together to tackle the housing crisis, said Krantz. “It’s come to a peak now. We’re all going to have to get our act together to address this looming problem,” he said.

It comes down to money. The Region of Halton — which Milton is a part of — needs more money for affordable housing, said Krantz.

“The federal and provincial governments, with their taxing abilities, they can make it work,” he said. “Could they maybe cut back in an area or two and put an extra billion or two into social housing? I think they have the ability to do that.”

CBC contacted the office of the housing minister, who referred questions to the CMHC. It didn’t respond by deadline.

Can the private sector pick up the pieces?

In the absence of government leadership, it’s clear who has taken charge, says Leilani Farha, global director with the human rights organization, The Shift.

“When [Ottawa] retreated from the housing market, they allowed the private sector to invade the space and come in a very unregulated way,” said Farha, who is also the former UN Special Rapporteur on the Right to Housing.

As result, Canada now has an unruly and very powerful private real estate sector, said Farha. “They’re used to being on a gravy train and receiving preferential tax treatment without having to provide any social housing.”

For Farha, the answer to easing Canada’s housing crisis is two-fold: better regulate the private sector so developers are compelled to include affordable housing in their portfolios and governments need to pony up more money for social housing projects.

Simply flooding the market with new market value units isn’t the answer, she said.

“Traditional supply-demand economics do not apply anymore in the housing sector,” she said. “Institutional investors with so much money and ability to finance are speculating with housing.”

“It’s skewed the whole market.”

Farha believes federal governments in the 90s made a grave mistake when they abandoned the social housing file, but the bigger mistake was losing the vision.

“Housing is for households and not speculative investment,” she said. “Changing that vision was a colossal mistake.”

With files from Andrea Hoang