Joe Biden wants a first-time homeowner tax credit, Amy Klobuchar would clear public-housing backlog — where the Democratic candidates stand on affordable housing

‘One sure way we can make sure that kids get a good start is if they have a roof over their head and a stable place to live,’ Sen. Amy Klobuchar said at Tuesday night’s Democratic presidential debate

HOUSING IS A RIGHT 

IT SHOULD NOT BE REAL ESTATE SPECULATION

Getty Images Some 85% of Americans ‘believe ensuring everyone has

 a safe, decent, affordable place to live should be a top national priority,’ 

a recent survey found. Almost every Democratic presidential candidate

 has released a comprehensive plan to address affordable housing.

By JACOB PASSY  Feb 26, 2020

Housing hasn’t traditionally been a hot topic in presidential elections, but with homeownership financially out of reach for many Americans, the candidates vying for the Democratic nomination have been eager to discuss the issue.

Several candidates brought up housing at Tuesday night’s Democratic presidential debate during the one of the evening’s tense back-and-forths.

In response to a question from the debate’s moderators, Sen. Amy Klobuchar mentioned the need to work through the backlog of people who have applied for federal housing vouchers that help low-income households offset the cost of housing.

“One sure way we can make sure that kids get a good start is if they have a roof over their head and a stable place to live,” Klobuchar said. “So the way you do that is, first of all, taking care of the Section 8 backlog of applicants. There are literally hundreds of thousands of people waiting. And I have found a way to pay for this and a way to make sure that people get off that list and get into housing.”

Klobuchar also mentioned concerns related to housing deserts and the need to pay for more affordable housing.

Sen. Elizabeth Warren and former New York City Mayor Michael Bloomberg, meanwhile, repeated their dispute from the last Democratic presidential debate over comments Bloomberg made years ago about the discriminatory practice of redlining, that were recently resurfaced by the Associated Press

“It is important to recognize the role that the federal government played for decades and decades in discriminating against African-Americans having an opportunity to buy homes,” Warren said. “And while Mayor Bloomberg was blaming the housing crash of 2008 on African-Americans and on Latinos, in fact, I was out there fighting for a consumer agency to make sure people never get cheated again on their mortgages.”

Bloomberg argued that his comments on redlining were taken out of context before mentioning his record as mayor. “When you’re talking about affordable housing, we created 175,000 units of affordable housing in New York City,” he said.

During a debate in November, MSNBC CMCSA, -2.20% moderator Kristen Welker asked billionaire hedge fund manager Tom Steyer whether he was the best person to address this issue, citing the housing crisis in Steyer’s home state of California. “We need to apply resources here to make sure that we build literally millions of new units,” Steyer responded.

Multiple other candidates, including Senator Bernie Sanders and former South Bend Mayor Pete Buttigieg, have released detailed plans showcasing how they would tackle the trouble many Americans face when looking to find a home to rent or to buy.
‘For the first time in recent memory, affordable housing is a topic on the presidential campaign trail.’— Diane Yentel, president and CEO of the National Low Income Housing Coalition


“For the first time in recent memory, affordable housing is a topic on the presidential campaign trail,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition.

Some 85% of Americans “believe ensuring everyone has a safe, decent, affordable place to live should be a top national priority,” according to a nationwide public-opinion poll commissioned between the National Low Income Housing Coalition and Hart Research Associates.

But the primary calendar itself may be largely the cause of candidates’ enthusiasm, said Rick Sharga, a mortgage-industry veteran.

“California — perhaps the epicenter of unaffordable housing — is scheduled to have its primary earlier than in past election cycles, and voters in the Golden State will very likely pay more attention to the affordable housing proposals being presented by the Democratic hopefuls than voters in many other states,” Sharga said.

The Trump administration has taken steps recently to address housing-related issues. Last year, the Treasury Department and the Department of Housing and Urban Development unveiled plans outlining how America’s housing-finance system could be overhauled, including ending the conservatorship of Fannie Mae and Freddie Mac. The White House recently released an extensive report detailing the forces contributing to chronic homelessness, particularly in states like California.

Don’t miss: 5 major changes the Trump administration wants to make to housing finance

Here’s what other Democratic candidates are saying about affordable housing:
Former Vice President Joe Biden

Former Vice President Joe Biden was the latest candidate to release an extensive plan for tackling issues related to affordable housing and homelessness. In a break with his fellow candidates, Biden explicitly called for tougher standards for real-estate appraisers as part of his proposal.

Doing so, he argued, would curb bias against black and Latino communities, which some say has depressed home values in those neighborhoods. Appraisers argue that current standards prevent bias, however.

Here are some of the other proposals Biden has made to address Americans’ housing issues:

• Draft and pass legislation to create a Homeowner and Renter Bill of Rights, modeled on a similar policy in California.

• Beef up tenant protections so fewer Americans are evicted.

• Expand the Community Reinvestment Act to include mortgage lenders and insurers to ensure communities of color have access to financial services.

• Revive anti-discrimination policies at the federal level.

• Create a new refundable $15,000 tax credit for first-time home buyers to help them build a down payment and offset the costs associated with buying a home. Similarly, he has advocated for a renter’s tax credit that would reduce housing costs to no more than 30% of a household’s income for low-income households and families who don’t qualify for Section 8 vouchers.

• Providing Section 8 housing vouchers to all eligible families.

• Expand housing benefits for public-sector workers, including teachers and first responders.

• Form a strategy to make housing a right for all Americans.

• Allocate more funds to tackle issues related to homelessness.
Sen. Bernie Sanders

Bernie Sanders, a Vermont independent, released a plan dubbed “Housing for All,” that addresses everything from the need to build more housing units to combatting gentrification.

Like many of his policies, the Sanders campaign framed its housing proposal in the context of what the average American faces versus Wall Street’s profits. “In America today, over 18 million families are paying more than 50 percent of their income on housing, while last year alone the five largest banks on Wall Street made a record-breaking $111 billion in profits,” the campaign said in its description of Sanders’ plan.

Here are some of the many ways in which Sanders hopes to address Americans’ housing needs:

• Preventing Wall Street funds from selling large pools of mortgages

• Investing $1.48 trillion over a decade in the National Affordable Housing Trust to fund the building, rehabilitation and/or preservation of 7.4 million affordable housing units.

• Setting aside $70 billion to repair and modernize public housing.

• Creating a national cap on annual rent increases at no more than 3% or 1.5 times the Consumer Price Index (whichever is higher).

• Forming an office in the Department of Housing and Urban Development designed to strengthen rent control, tenant protections and inclusive zoning.

• Making federal funding contingent on states encouraging development that promotes integration and public transportation access.

• Instating a 25% home flipping tax on real-estate speculators who sell non-owner-occupied properties that sell for more than their original purchase price if sold within five years.

• Creating an independent National Fair Housing Agency in the vein of the Consumer Financial Protection Bureau that protects people from housing discrimination and enforces housing standards for renters.

• Investing $8 billion across HUD and the Department of Agriculture to form a first-time homebuyer assistance program

Affordable housing also features as part of Sanders’ proposal for an “Economic Bill of Rights.” During a campaign speech earlier this year, Sanders claimed that some Americans are “paying 40%, 50%, 60% of their limited income in housing” and called the situation “absurd.” Sanders has further referenced urban gentrification as an issue that needs to be addressed.

In the first Democratic presidential debate, Sanders also mentioned the country’s homeless population in response to a question about his calls for expanded government benefits.
Mayor Mike Bloomberg

Michael Bloomberg, the billionaire former mayor of New York City, has set forth a housing agenda that would aim to cut homelessness in half by 2025. As part of that plan, he said he would double the federal spending on homelessness programs from $3 billion to $6 billion annually, including extra support for rehousing programs and short-term rental assistance.

Bloomberg has also laid out the following initiatives as part of his housing plan:

• Providing housing vouchers to all Americans at or below 30% of their area median income and expanding programs to avoid evictions.

• Increasing the supply of new affordable housing units, expanding the Low-Income Housing Tax Credit and raising funding for the National Housing Trust Fund.

• Providing matching funds to aid renters in building up down payments.

• Curbing discrimination in rental housing and bringing more landlords into the voucher system.
Mayor Pete Buttigieg

Pete Buttigieg, the former mayor of South Bend, Ind., has released “an agenda for housing justice in America” aimed at improving affordability and reducing homelessness.

“Pete is committed to housing justice,” the campaign noted on his website. As President, he will use housing policy at every level of government as a tool to address injustices, reverse the discriminatory impacts of racist redlining, and build pathways to lasting economic and social opportunity.”

The broad plan included the following recommendations:

• Supporting the construction or renovation of more than 2 million rental units, mainly through allocating an additional $150 billion in new National Housing Trust funds.

• Investing $4 billion in matching funds to scale successful low-income homeownership programs in order to assist households in becoming homeowners.

• Combatting lending discrimination and reverse Trump administration changes to policies under the Fair Housing Act.

• Passing legislation to regulate interstate landlords and holding bank executives and mortgage lenders liable for robo-signing and other predatory lending practices

• Expanding housing assistance to families with children.

• Creating an emergency rental assistance fund to help families avoid eviction among other rental protections.

Additionally, Buttigieg has put forth an extensive proposal, called the Douglass Plan, to address racial disparities in homeownership and wealth. The plan would create a “21st Century Community Homestead Act” that would be piloted in select cities across the country.

Through this program, a public trust would purchase abandoned properties and provide them to eligible residents. These people would include those who earn less than the area’s median income or those who live in historically redlined or segregated areas. Residents who participate would be given full ownership over the land and a 10-year forgivable lien to renovate the home so it could be used as a primary residence.
Sen. Elizabeth Warren

As she has done on other issues, such as student debt, Elizabeth Warren, the senator from Massachusetts, has released a detailed plan to tackle a wide variety of housing-related issues.

“Housing is not just the biggest expense for most American families — or the biggest purchase most Americans will make in their lifetimes,” the Warren campaign said in a post to the site Medium. “It also affects the jobs you can get, the schools your children can go to, and the kinds of communities you can live in. That’s why it’s so important that government gets housing policy right.”

To that end, Warren has introduced the American Housing and Economic Mobility Act, which serves as the backbone of her affordable housing plan:
Elizabeth Warren has a plan to build, preserve or rehabilitate 3.2 million housing units for lower- and middle-income people to lower rents by 10%.


Warren’s plan includes, among other things:

• Building, preserving or rehabilitating 3.2 million housing units nationwide for lower- and middle-income people in order to lower rents by 10%. This, she said, would be funded by raising the estate tax back to Bush-era levels.

• Creating a down-payment assistance program designed to address the black-white homeownership gap by providing assistance to first-time home buyers who live in a formerly red-lined neighborhoods or communities that were segregated by law and are still currently low-income.

• Expanding fair-housing legislation to bar housing discrimination on the basis of sexual orientation, gender identity, marital status, veteran status or income.

• Extending the Community Reinvestment Act to require non-bank mortgage lenders invest in minority communities.

• Providing $2 billion in assistance to mortgage borrowers who are still underwater on their home loans following the financial crisis, meaning they owe more than their homes are worth.

• Instituting new requirements for sales of delinquent mortgages .
Sen. Amy Klobuchar

Sen. Klobuchar from Minnesota has included multiple housing-related initiatives as part of her outline of more than 100 actions she plans took take in her first 100 days in office, if she is elected. They include:

• Reversing the Trump administration’s proposed changes to federal housing subsidies.

• Expanding a pilot program that provides mobility-housing vouchers to families with children to help them relocate to higher opportunity neighborhoods.

• Suspending changes to fair housing policy ushered in by HUD Secretary Ben Carson in order to combat segregation in housing.

• Overhaul housing policy more broadly as part of a national infrastructure plan.

US Housing Market Crash

When will the tsunami of foreclosures hit?

With millions of adjustable-rate mortgages about to reset this fall, experts expect a wave of foreclosures by Americans in every income bracket. Here's why they could soar in late 2006 and beyond.

Those easy-mortgage chickens are coming home to roost.

This fall the adjustable-rate mortgages (ARMs) that millions of Americans took out during the recent housing boom will be reset, and many homeowners will see their monthly mortgage payments shoot up by as much as 20%. According to the Mortgage Bankers Association, of all mortgages financed in 2005, 36% were ARMs -- the highest ever.

National foreclosures up 24%

Property foreclosures nationwide increased 24 percent in August from the previous month and 53 percent from a year ago, marking the highest rate so far this year, a foreclosure service reported today.

A total of 115,292 properties entered some stage of foreclosure during the month, according to a report from RealtyTrac. The report also shows a national foreclosure rate of one new foreclosure filing for every 1,003 U.S. households, the second-highest monthly foreclosure rate reported year to date.

This report is much bleaker than numbers reported by the Mortgage Bankers Association today. In a survey of more than 42.5 million loans nationwide, homeowners appeared to be keeping up with their mortgage payments.

What will it mean for Canada. Well for one thing its going to kick the crap out of Softwood lumber exports. Leaving those who take Harpers deal wth cash in hand but no market to export to. All those jobs the BQ is counting on...gone...poof.

As the lumber bosses take their cash and run. Canadian Banks operating in the U.S. will take loan losses. The Canadian dollar will rise against the American dollar and our manufacturing sector will cry the blues, more layoffs.

Housing prices have finally outrun incomes."

Runaway real estate prices, which had been growing in double digits throughout much of the country, are now pricing potential homeowners right out of the market. The ability of Americans to afford a home is the worst it's been in two decades, according to the National Association of Realtors.

The past year has been rough on consumers. First, mortgage rates began to rise. Then, there was the jolt from sharply higher energy prices. And now the apparent end of the long real estate boom is at hand. It's all combined to make Americans feeling distinctly poorer, and less confident. Mirroring other recent surveys, the U.S. Conference Board reported last week that its consumer confidence index suffered its biggest one-month drop in August since the devastation of hurricane Katrina a year ago.

Think it all doesn't matter to you? Think again. For nearly a decade now, the United States has been the economic driver for much of the world -- Canada included. The United States has been sucking up excess savings and consuming everything in sight, from cars to homes and everything that goes in them.

"It's hard to imagine that a U.S.-centric global economy wouldn't be at risk in the aftermath of a bursting of the U.S. housing bubble," warned Morgan Stanley chief economist Stephen Roach, one of Wall Street's most outspoken worrywarts.

"The non-U.S. world remains heavily reliant on selling exports to wealth-dependent American consumers. As the United States comes to grips with the aftershocks of another post-bubble shakeout, so too must the rest of the world."

As he put it: "If the American consumer sneezes, countries in both the developed and the developing world could easily catch a cold."

Globally this is a major consumer market crash, not seen since the crash of 1984 when the FIRE market in Americas cities, and around the world crashed. Australia is reporting record housing foreclosures.

House-price inflation is faster than a year ago in roughly half of the 20 countries we track... Apart from America, only Spain, Hong Kong and South Africa have seen big slowdowns. In ten of the countries, prices are rising at double-digit rates, compared with only seven countries last year. European housing markets—notably Denmark, Belgium, Ireland, France and Sweden—now dominate the top of the league. Anecdotal evidence suggests that even the German market is starting to wake up after more than a decade of flat or falling prices... Calculations by The Economist show that in Britain and Australia the ratios of prices to rents are respectively 55% and 70% above the long-term average... By the same gauge property is “overvalued” by 50% in America."

Canadas housing market is cooling off too. And in hot Alberta, the boom bubble could burst with ominous results despite high wages. The market is overpriced, it is inflationary and it means well paid workers are overextending their personal debt. Once again putting conditions on us that we saw in 1984 when the Oil Boom bottomed out. Despite a labour shortage in no way are average wages keeping up with home costs.

Central Bank Warns Over [Canadian] House Prices (Globe and Mail, September 7th): "the central bank said yesterday that one of the key risks to the Canadian economy is that housing prices will continue to climb steeply here, exerting inflationary pressure, even as the entire U.S. economy is dragged down by its crumbling real estate market. The Bank of Canada surprised no one and left its key interest rate unchanged yesterday... Average home prices are expected to reach an all-time high in 2006, although the increase from 2005 is not as big a leap as the year before, said Gregory Klump, chief economist of the Canadian Real Estate Association. He expects average prices to rise 6.1 per cent in 2006 and 4.7 per cent in 2007. The Canadian Mortgage and Housing Corp. is forecasting a 12-per-cent increase in housing prices this year and 6.4 per cent in 2007."

The American economy will be a basket case, having to take out more loans to offset the crash in consumer spending which is the only thing holding up Wall Street. While Wall Street has made money off companies that layoff workers, that too will come to bite them in the ass.

WHEN THERE ARE MORE "home for sale" than "help wanted" signs, the U.S. economy may be mired in recession.

Most gauges are confirming that the housing market has hit the brakes and may be in a tailspin. Existing-home sales dropped a more-than-expected 4 percent in July and the number of unsold houses is the largest since 1993. New-home sales fell 22 percent from the same month last year. And construction spending fell the most in five years.

While higher mortgage rates and affordability concerns have been the bogeymen in the current U.S. housing decline, little attention has been paid to the combined demons of unemployment and adjustable-rate mortgages.

WSJ Economist Survey -- Housing Slowdown to Continue; Recession a Possibility (Eli Hoffman in Seeking Alpha, September 8th): "In a recent survey of 52 economists, most believe cooling in the housing market will extend into next year. Housing forecasts: Many predict no change, or even a decline, in home prices next year. The average prediction for next year was a 0.43% increase in housing prices, well below the 2.7% forecasted CPI inflation measure. The last time housing trailed inflation was in 1996."

Risk of U.S. Recession Growing: HSBC (Reuters, September 8th): "Investment bank HSBC has revised downward its forecast for 2007 economic growth and cautioned that the risk of an outright recession is growing as a retreat in housing threatens household balance sheets... They now see gross domestic product expanding just 1.9 percent next year, down from an earlier forecast of 2.6 percent and from an expected rate of growth around 3.5 percent for 2006."

Like his daddy before him, George will have to either raise taxes or take out more loans from China. Either way just in time for the November election. Republicans lose both houses.

The Return of Saving
The U.S. savings rate has been falling for decades. But that downward trend will likely soon be reversed, as factors such as rising mortgage interest rates force Americans to start saving more. The change will ultimately be for the better, but in the short term it could cause serious problems for the United States and its trading partners unless they start preparing immediately.

Also See:

Housing Bubble

Economy



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Ireland’s Housing Crisis Is an Indictment of Irish Capitalism

A dysfunctional housing system is putting intense strain on Ireland’s social fabric as rents spiral out of control. The current malaise has deep roots in the structure of Irish capitalism, and radical reform is the only way to turn things around.

Rental signs outside Georgian buildings in Dublin city center, Ireland on February 15, 2023. 

(Artur Widak / Anadolu Agency via Getty Images)

BY COLIN GANNON
05.06.2023
JACOBIN

On April 1, amid a protracted housing crisis that has been steadily mounting in scale and intensity, the Irish government lifted an eviction ban that had protected tenants since last October. As the current housing minister Darragh O’Brien conceded, the predictable outcome will be a rise in already record-breaking levels of homelessness.

Whatever way you look at this hydra-headed housing crisis (which seems increasingly unmanageable for the ruling parties), it has produced catastrophic effects for the country’s residents, particularly in urban areas. Emergency accommodation houses 11,988 people, with others sequestered away in more hidden forms of homelessness. Those who wish to buy will see that house prices are now seven times the median income.

But we can find the most striking symptoms of the crisis in the private rental sector, as is the case in many other countries. One day last August, only 716 homes were available to rent in the south of Ireland, and rents stood at an all-time high. Even mainstream liberal commentators detect unmistakable signs that Fianna Fáil and Fine Gael have “decided to bring back nineteenth-century landlordism, to reshape Ireland as a nation beholden to private property owners.”

Overcoming the crisis will require a comprehensive transformation of the Irish housing system. But how are we going to achieve this?
The Irish Housing Question

Exasperated at the ineffectual efforts of bourgeois reformers, Friedrich Engels wrote in 1872 that the “housing question” could only be resolved by ending the capitalist mode of production. Yet Ireland’s capitalist class and its political elite are clearly not staring down the barrel of social revolution, however unanchored they may be in economic reality. While the problems with housing “may not be resolvable under capitalism,” argue Peter Marcuse and David Madden in their book In Defense of Housing, “the shape of the housing system can be acted upon, modified, and changed.”To make sense of the Irish housing crisis, you have to understand why the development of the southern Irish state has been so bound up with housing and property.

If you want to make sense of the housing crisis, you have to understand why the development of the southern Irish state has been so bound up with housing and property. By drawing this historical arc, we can see how the underlying philosophy shaping Irish housing policy for a hundred years in the South — the North deserves its own analysis — has been an unhealthy obsession with owner-occupation. This preference interacted with the forces of globalization and the neoliberal turn to bring us to where we are today.

In the apocalyptic aftermath of an Gorta Mór (the Great Famine), an agrarian movement called the Land League, formed in 1879, organized the rural poor in Ireland into a mass national campaign that resisted evictions and employed rent strikes and boycotts. It eventually concluded that the only way to defeat a vampiric form of rural landlordism was through widescale farmer-tenant proprietorship. This dream soon became a reality.

Before the British state carried out agrarian reforms in response to popular mobilizations known more broadly as the Land Wars, thirteen thousand landlords owned the land of rural Ireland. By 1920, tenants had purchased 316,000 holdings. These tenants became private land- and homeowners, beneficiaries of a mass division and redistribution of estates held by the Anglo-Irish ruling class.

Politically, as the historian Diarmaid Ferriter writes, the implication was that the descendants of the “Land War generation” were “imbued with the idea that home ownership was the ultimate goal and renting was wasted money.” Those descendants, Ferriter concludes a little too definitively, were the “inheritors of a conservative impulse.”
Housing and the Irish State

After gaining independence, the nascent post-partition state in the South would come to assume a leading role in providing housing capital by funding a relatively large social-housing construction program, which constituted a majority of the housing built from the 1920s to the 1950s. At the same time, it also played an outsized role in the funding and building of dwellings for owner-occupation, its preferred type of tenure.

Similar surges in output during the 1960s and ’70s could not conceal the fact that government subsidies still favored, to a considerable degree, the private home-buyer more than the social-housing tenant. The 1966 Housing Act was a further boon for private ownership, extending the right of purchase to all local authority tenants. Come 1969, local authorities had sold an astonishing 64,490 council homes.

As the Sinn Féin housing spokesperson and author Eoin Ó Broin points out, the “largest output of housing in the history of the State” during the 1970s was severely undercut by the “massive transfer of stock from the public to the private sector via tenant purchase.” This transfer tipped the balance in favor of homeownership further still.Irish governments prioritized ownership of property over other forms of social protection.

Private homeownership, having stood at 52.6 percent in 1946, rose to 70 percent in 1971. The ruling conservative parties could reasonably have felt that this was the crowning achievement of the modern Irish state, after centuries of absenteeism, dispossession, and insecurity.

In a landmark study, Michelle Norris disputes the widely held assumption that the southern Irish state failed to develop a comprehensive welfare regime like many of its Western European counterparts. Instead, she argues, a paradigm called “asset-based welfare” meant that Irish governments prioritized ownership of property over other forms of social protection, reminding us of Ferriter’s contestable, if resonant, notion of the inherited conservative impulse.
Financialization

From the 1980s onward, the structure of the system did not change — just the way in which it was financed. In his book Sins of the Father, Conor McCabe writes of a kind of “revolution” that was underway at the time:


Banks were becoming “one-stop shops” for financial services, and the Irish government played its part by changing the rules and allowing building societies and insurance companies to compete with high-street banks in the areas of personal and business loans.

The impact of credit and financial liberalization combined with the withdrawal of the Irish state from providing homes and funding their construction. The 1980s saw a 30 percent collapse in the output of social housing compared to the previous decade.The 1980s saw a 30 percent collapse in the output of social housing compared to the previous decade.

Yet as Ó Broin explains, the effects of credit liberalization on house prices were “more delayed than in Britain,” where the Thatcher government was engaged in a mass sell-off of council housing. By the time prices started creeping upward, financial deregulation and banking standardization steered through by the European Union in the 1990s exacerbated the trend — in particular the newfound access to cheap credit for Irish financial institutions arising from membership of the single currency.

Housing in Ireland, now thoroughly financialized, was thus central to the boom and bust of the Celtic Tiger. In 1994, the average price of a house in the state was €72,000. By 2004, it had soared to €249,000.

Then came the crash of 2008. Construction, private sector investment, and capital spending vanished overnight. Successive austerity budgets by the Fianna Fáil–led government slashed capital expenditure in social and affordable housing from €1.5 billion in 2008 to €485 million in 2011. After the bailout, when the Irish state lost its fiscal sovereignty to the European Union–European Central Bank–International Monetary Fund troika, social-housing output plummeted, shrinking to a new historic low of 642 units in 2014.
Getting Boomier

Meanwhile, housing affordability became a growing problem in the private rental sector, which had expanded during the Celtic Tiger as investors flooded into the market through buy-to-let mortgages. Rents in the state ballooned by 68 per cent between 2010 and 2021. Across the EU as a whole during that period, rents rose by just 16 per cent.By explicit design of government policy, the latest phase of the crisis has increasingly been fueled by investment from what scholars call asset-manager capitalism.

In 2014, the introduction of the landlord-friendly Housing Assistance Payment led, as Ó Broin notes, to a situation whereby “non-subsidised renters were being crowded out of the private rental sector by increasing numbers of social housing tenants.” He describes this as ground zero for the terrifying excesses of the homelessness crisis. All the while, house prices were rocketing skyward, squeezing prospective home-buyers into an ever-larger pool of tenants.

By explicit design of government policy, the latest phase of the crisis has increasingly been fueled by investment from what scholars call asset-manager capitalism. In the words of Rory Hearne, real estate investment trusts (REITS) and similar funds of that kind desire the creation of “a permanent renting class,” out of which they can wrench endless rents.


The economist Josh Ryan-Collins observes that this state-sponsored swarming of asset-management institutions around real estate in Ireland is a global phenomenon, as the “wall of liquidity created by Quantitative Easing” resulted in a search for “high yielding, but safe assets.” When those engaged in this search made it to Ireland, they set their sights on distressed commercial assets that were being held by Ireland’s National Asset Management Agency (NAMA).

Now that the market for commercial assets is contracting, the “wall of liquidity” has moved into the domain of residential development. Deploying scorched-earth investment strategies, these institutional landlords — who bought just seventy-six units in Ireland in 2010 — scooped up 5,132 homes in 2019, and now own more than forty-five thousand across the country.

Put simply, the private rental sector is completely broken, blighted by severe supply shortages and unaffordable, exploitative rents. Various rent subsidy schemes for social-housing tenants also drain close to €1 billion from the exchequer to fill the coffers of private landlords. Only harebrained schemes to line the pockets of developers are forthcoming from the government. The crisis thus rages on with no end in sight.

To make matters worse, the coalition government, in full knowledge of the scale of the crisis and the breadth and depth of hardship, has failed to spend over €1 billion of its housing budget over the last three years. Of perhaps greater concern is the unforgivable refusal of local authorities to spend 90 percent of their allocated affordable housing budget across 2021 and 2022. But if the system appears to be at a tipping point, then where are the main, viable solutions coming from on the Irish left?
Alternatives

On behalf of Sinn Féin, Ó Broin has put forward various proposals, mapping out in detail the most compelling reformist alternative. This vision closely resembles the housing policies supported by the strongest socialist force in the Dáil, People Before Profit (PBP). PBP’s ideas differ from those of Ó Broin in making an explicit call for rents to be set at a percentage of take-home pay and advocating the nationalization of all dwellings owned by corporate landlords. Few on the Left would resist such moves to radically rebalance the system.On behalf of Sinn Féin, Eoin Ó Broin has put forward various proposals, mapping out in detail the most compelling reformist alternative.

So what are Ó Broin’s solutions? Chiefly, in the medium to long term, “the expansion of public housing on a scale not seen in the history of the State,” with something in the order of an additional 230,000 public housing units over the next ten years. Ideally, he argues, this would be led by resurgent local authorities that had been reassigned the power to build and build. Developments would be mixed-tenure and mixed-income, as well as world-class from the point of view of amenities and architecture. The housing movement also sees a constitutional right to housing as an imperative.

Ó Broin’s most interesting policy idea may be his lease-holding suggestion. Firstly, he argues, “the land on which the affordable purchase home sits should never be sold, rather it should be leased to the homeowner indefinitely at no or low cost.” Secondly, to avert re-commodification, it should not be possible to sell the property on the private market. A slightly diluted version of this model of affordable housing has already been developed, on a micro-scale, by Ó Cualann Cohousing Alliance in Dublin since 2017.

According to Ó Broin, public-private partnerships, sales of public land, private rental subsidies, and long-term leasing arrangements “all introduce ever greater levels of profit maximisation” and should be phased out of the public housing sector. To address the short-term affordability crisis as we await the largest house-building program in the state’s history, O Bróin has proposed an immediate three-year rent freeze, which would replace the existing, unfit-for-purpose Rent Pressure Zones.

To achieve a reduction in existing rents, he also wishes to introduce a refundable tax relief, pegged to “8.3 percent of rent paid in the previous year.” A three-year rent freeze, combined with a refundable tax relief alongside an ambitious program of public house-building, should in Ó Broin’s view see “private rental supply and in turn rents start to return to pre-peak levels by the time the freeze and relief expire.”

Even if these policies are successful, should the limit of our ambition, against a backdrop of hyperinflated rents and stagnating wages, be to return the cost of rent to precrisis levels? For Sinn Fein at least, that seems to be the case.
Supply Is Not Enough

Other policy interventions called for by Ó Broin include greater tenant participation in policy formulation and decision-making as well as far-reaching land reform. The latter could, he maintains, be tackled by actively increasing the stock of publicly owned land, reintroducing credit controls, and reviewing the current vacant tax rate. More broadly, he wants a reconsideration of how “land speculation is financed and taxed” in order to “end the corrosive impact of speculative investment in land on the housing system.”

The continued use of Irish housing as an asset class by international asset-management institutions deepens the links between the domestic housing system and global financial markets. For economist Ann Pettifor, the main “propellant” of this crisis is not supply shortages but an excess of finance. House prices will fall, she has argued, “when the propellant is withdrawn — and flows of finance decline.”

There is a serious engagement with the history of financialization in the interventions of Ó Broin, Hearne, and others. However, they fail to fully connect the financial exuberance that underpins the current economic order in Ireland to the need for a reformed housing system. Extra supply will not resolve everything.Irish housing activism must make arguments that challenge the entire edifice of housing commodification and Irish capitalism.

We should therefore place greater emphasis on land reforms. We should also give more consideration to whether a continuation of the current Irish economic model — based on an overreliance on foreign direct investment, with Ireland as an intermediary zone between US and European capital — will allow for the kinds of reforms that are required, and not simply bake further instability and pricing flux into the system.

As the example of Finland has shown, the policy of Housing First — giving homeless people a home unconditionally, preferably with integrated support in a context of higher supply — can work and come close to ending different types of homelessness. It is also necessary to rein in the brutal predations of landlordism through regulation and possibly new taxes.

A common narrative suggests that this whole crisis was not a necessary outcome of Irish economic policy in general but rather a housing-policy failure in particular, which arises from the misjudgments of politicians, not any inner logic of capital. If not for those misjudgments, everything might be okay.

However, this reasoning is seriously flawed and myopic. Irish housing activism must make arguments that challenge the entire edifice of housing commodification and Irish capitalism.
Housing Activism

Amilitant uprising in the style of the nineteenth-century Land Wars seems unlikely, and not only because those struggles arose from the specific historical conditions of post-famine rural Ireland. It is also because Sinn Féin, on the brink of real power for the first time in the South, has effectively monopolized the debate on an alternative model, ably assisted by housing activists, the socialist left, and even some social democrats in other parties.Postcrash Ireland witnessed a new wave of extra-parliamentary housing activism.

Over the past decade, however, there have been real echoes of the Land Wars on the ground, particularly in Dublin. Postcrash Ireland witnessed a new wave of extra-parliamentary housing activism, from Housing Action Now to Home Sweet Home to Take Back the City. These campaign groups emerged to build a counternarrative on the housing crisis and engaged in forms of direct action such as the occupation of vacant buildings. Many were connected to the Right2Water campaign, Ireland’s largest grassroots mobilization so far this century.

Formed in 2019, Community Action Tenants Union (CATU), the only tenants’ union in Ireland, has gone from strength to strength, accumulating members across the island on an all-Ireland basis. Along with the inherent difficulty in organizing atomized tenants, Irish tenant politics, in the judgement of Michael Byrne, suffers from political centralization, which moves sites of organized conflict away from the city or town to central government.

This is an obstacle CATU must overcome, but it is not helped by the passivity of the trade-union movement and the pacifying effects on the housing movement of NGOs. A number of small charities that rely heavily on state funding are among the loudest voices in the debate, yet simultaneously find themselves unable to advocate for sufficiently radical change because of “service level agreements” and the threat of losing access to funding.

We can see the consequences of this “NGOization” of the response to the housing crisis most starkly in advocacy over homelessness. As some scholars have observed, the Apollo House occupation maintained a rather “restricted focus on homelessness” that “failed to connect up with the wider impacts of the housing crisis.”
Fighting Back

Today, we run the risk of succumbing to the same temptations: focusing our attention on rising homelessness and evictions at the expense of reexamining a wider system that also alienates us in our workplaces and in our everyday interactions with the world around us. As Marcuse and Madden argue, a “truly radical right to housing” cannot be limited to a narrow legal right: it must “comprise a similarly expansive set of political demands”.

Even if a left-leaning coalition led by Sinn Féin comes to power, it would leave the current economic model largely untouched, so activists should not rest on their laurels. Given the scale of the crisis, all actions should be on the table. During the Land Wars, the Whiteboys and Ribbonmen — secret organizations whose tactical repertoires included attacking landlords and their property — attracted notoriety.

But much more recently, at a time when levels of trade-union density and activity were high in Ireland in a European context, tenants still undertook national rent strikes. In 1972 and 1973, tens of thousands of tenants fought back against deteriorating housing conditions and spiraling rents. Powered by a social movement, the Left can confront the beast head on, smashing the neoliberal consensus on housing and cleansing the system of predatory land and property speculation.

Colin Gannon is an Irish journalist and researcher who has written for the Baffler, Tribune, the Guardian, and the Verso Books blog, among other outlets.

How Greens in Government Are Tackling Homelessness

Samir Jeraj
APRIL 2021

From Helsinki to Brighton, Greens in local governments have been working to find lasting solutions to the persistent problem of homelessness, often drawing inspiration from pioneering policies from around the world and calling for a shift in understanding and response measures. Green proposals have brought about significant progress at many different levels of government, yet the current climate threatens to set back these efforts. Although the onset of Covid-19 was an impetus to find solutions, many of the policies addressing homelessness during the pandemic are temporary and thus liable to be rolled back, while funding cuts imposed by recovery policies risk worsening the situation.

More than 700,000 people sleep rough across Europe on any given night, according to data from the European Parliament. This figure has risen by 70 per cent in the past decade, as rents in cities spiralled, social housing shrank, and governments grappled with the impact of the 2008 financial crash. Millions more live in temporary housing, informal shelters, and on couches and floors of friends, family, and acquaintances.

The profile of people who are homeless varies across Europe, and it is difficult to get a clear picture as there is no cross-EU data. However, a comparison of national data reveals that some groups are more at risk than others, and that picture is changing. Undocumented migrants, who do not have access to social protection are at high risk across Europe, and make up over half of rough sleepers in some cities in Europe, such as in the Spanish capital of Madrid. By contrast, in Portugal, of the 1386 homeless people supported by the NGO Assistência Médica Internacional (AMI), 79 per cent were born in the country. In Austria, there is growing concern about the impact of rising rents on “middle class” people in employment. In the UK, an increasing number of younger people under the age of 25 have become homeless. In Brussels, a count in 2016 revealed that of the 3386 people who were homeless in the city, 35 per cent were living on the streets, 25 per cent were in temporary accommodation, and 39 per cent were living in inadequate housing.

The coronavirus pandemic has given urgency to tackling of homelessness. Governments have taken unprecedented steps to protect the homeless against the risk of infection and death. In the UK, for example, the government briefly funded the “Everyone In” programme in March 2020 to bring rough sleepers into the hotels that had emptied. By contrast, rough sleepers in Brussels were issued “curfew passes” that allowed them to stay on the streets. In Paris, Doctors without Borders found that four in ten people who were in homeless hostels were testing positive for Covid-19, with rates as high as 94 per cent in one hostel.

“How can you stay at home if you don’t have a home?”

Progressive alliances for ambitious policies in Brighton

Over the past six years, several Green “waves” have swept through countries in western Europe and brought more Greens into power at the local, regional, and national levels. These new (and sometimes older) Green and Green-led administrations are having to deal with the growing homelessness as part of their policy agendas. To do so, they have often taken inspiration from innovative approaches to housing provision, while building up emergency hostel services, creating more social housing, and seeking to strengthen the rights of people who are most at risk of homelessness.

Brighton and Hove on the south coast of England have many of the problems faced by seaside towns, which have suffered from the loss of traditional industries and now have a lot of more low-paid seasonal tourism work. It has a long waiting list for social housing, hundreds of families in emergency housing, and rough sleepers on the streets. During the coronavirus pandemic, the council has worked hard to get rough sleepers off the streets as part of the “Everyone In” scheme. The local council has been led by a minority Green Party administration since last year, and housing and homelessness are one of their priorities.

David Gibson is the joint chair of the city’s housing committee. He explained that the administration is working at different levels: increasing the supply of council housing and expanding the “Housing First” provision. “Since we took over the council, we’ve produced as many additional council homes in a year than the previous administration produced in four years,” he explains.

Under the Greens, the council has accelerated its programme of buying up housing in Brighton to add to those it has commissioned, using a mix of loans and their own money to do this. “Part of the package is that we need to tackle the supply side,” Gibson added. It is a policy that they have been able to pursue even as the construction industry ground to a halt due to the pandemic.


Without increased funding from the central government and with the prospect of the ban on evictions in England being lifted the council will still find it challenging to house everyone.

As a minority administration, Gibson explained that the Greens work with councillors from the Labour Party on a joint housing and homelessness programme to pass the necessary policies and budgets, and on setting more ambitious goals.

The council has also bought several of the better buildings being used for temporary housing, with the aim of turning them into long-term housing in the future. They have recently bought a 38-flat scheme in Gibson’s ward, which means housing that would otherwise have been in the for-profit market is now being let through the council.

A “considerable success” for Gibson and the Green administration is the expansion of “Housing First” homes from 20 to 60, with more in the pipeline. Based on the approach pioneered in New York in the 1990s, Housing First emphasises getting people into stable housing and meeting their holistic needs for support such as mental health or addiction on an ongoing basis. This is a complete reversal of the prevailing thinking that people should have addressed these issues before they can access housing, which is near impossible when someone is living on the street or in insecure housing.

The expansion is fortuitous for Brighton and Hove, as many of the people being sheltered in hotels due to the pandemic are exactly the people for whom Housing First can help. However, without increased funding from the central government and with the prospect of the ban on evictions in England being lifted (the ban has now been extended until May), Gibson predicts the council will still find it challenging to house everyone in need. “There’s this problem in the long run that at the moment, without funding, we haven’t got a prospect of resolving.”
Bureaucratic barriers undermine Amsterdam’s local solutions

In Amsterdam, the Green-led administration is facing similar challenges with their central government, explains Marijn van der List who is the GroenLinks (Green Left) spokesperson on homelessness in the city. As the capital city, homelessness is particularly acute and the local government has had to respond to Covid-19. “It’s quite contradictory that we were told to ‘stay at home’ but how can you stay at home if you don’t have a home?” she observes. Locally, the lack of available housing causes blockages throughout the homelessness system, “you would like people to get a house as soon as possible to start their lives again or with a little bit of help, or step by step doing it on their own again, but there are no houses,” she explains.


Efforts by local governments are not being matched by policy change and support from the central government

At the national level, anti-immigrant policies passed by successive governments mean many undocumented people are homeless and cannot access services. Marijn first became involved in politics, resisting policies such as denying undocumented people the right to a shelter and a fair asylum system. “Cities were always providing shelter in some way to people without documents,” she explains. There is currently a national shelter programme running in five local governments, including Amsterdam, and the Green-led administration there has added funding to expand the shelter capacity. It provides 24-hour shelter for around 500 people together with support for their asylum cases. They are also working with other parties to look at a “city ID” card for residents of Amsterdam, including undocumented people, modelled on efforts in New York, Paris and other European cities to ensure some basic rights such as access to bank accounts and access to state buildings.

Van der List is frustrated that efforts by local governments are not being matched by policy change and support from the central government on the causes of homelessness and on funding for mental health services. “Sometimes I find it very hard to look at the numbers we spend on this system, where we try and help people once they hit the bottom, because if you’re ‘too well’ you’re not helped,” she says. Long waiting lists for housing and local connection rules on access make it more difficult for people who have had to move around a lot. The Dutch welfare system also discourages house-sharing by cutting benefits to people who share a home, including parents with adult children. These are policies developed at a national level that create challenges for local governments. “You can’t solve everything as a city,” says van der List.
Greens in Finland – leveraging power in government to shift policies

Finland is already a leader in reducing homelessness. In 1987, there were around 18,000 rough sleepers. Their strategies throughout the 1990s and early 2000s used the “staircase” approach where, in theory, a homeless person moves from street to shelter, to temporary housing, and eventually to permanent housing. However, the staircase approach failed to tackle long-term homelessness. In 2007, the government and municipalities like Helsinki embarked on their own Housing First policies: 1250 homes were built or made available in Finnish cities to people who were long-term homeless by converting existing shelters accompanied by intense support around their health and social welfare. In parallel, the government improved its efforts on prevention and continued to build more general needs social housing. By 2017 the number of people who were homeless was 6600 – it now stands at 4600. It is in stark contrast to other parts of Europe, such as the UK where there has been an increase of 141 per cent in the past ten years.

As part of the agreement with the five parties that form the government, the Finnish Greens negotiated including the target of halving homelessness by 2023 and eliminating it all together by 2027. The current minister for environment, climate and housing responsible for making this happen is Green MP Krista Mikkonen. The government has introduced a new Homelessness Cooperation Programme between the state, municipalities, service providers and NGOs. This program focuses on providing funding and support for municipal work on homelessness.

Alongside this, the government is steering through legislation to make housing counselling statutory. This would make it a requirement in every municipality and bring together services, enabling them to intervene to prevent evictions and negotiate issues such as rent debt.

In common with many countries, homelessness in Finland is concentrated in cities and particular in Helsinki, where housing costs have risen beyond people’s ability to pay. The Finnish Greens in Helsinki hold the vice-mayor positions on health and social care along with housing. They have worked to integrate different services to help people with multiple and complex needs such as homelessness, addiction and mental health, and are also proponents of “Housing First” as a principle in their housing policies. In contrast to the New York model of Housing First, tenants in Finland pay the rent entirely themselves (drawing on the benefits system) and the relatively well-funded health and social services mean there is less of a need for the large multi-agency support meetings used in the US.
Progress and prospects at the EU level

The issue of spiralling housing costs in cities is something Dutch GroenLinks MEP Kim Van Sparrentak has been working on in her role as rapporteur for the EU Parliament on access to decent and affordable housing for all. The rapporteur draws up a report which recommends new EU legislation to the parliament which is a key stage of the legislative process in the EU. Van Sparrentak’s housing report has taken a year to put together and covers a broad range of issues such as affordability, homelessness, discrimination, speculation, investment in public housing, and evictions.

The main recommendation of the report was creating an EU level target of eliminating homelessness by 2030, and the Greens/EFA group in the parliament are running a petition in support of this goal. However, Van Sparrentak believes that while governments stick to austerity policies, this will be difficult to achieve. “Homelessness is not a fact of life, it does not have to be considered as one,” she says, highlighting the success in Finland. “There are solutions that exist, if we dare to invest in them, and if we dare to take a different approach to social support.” She adds that there is a lot of support for tackling homelessness in the EU and that there are steps that can be taken to enable national and local governments to take action, and to tackle the root causes such as speculation.

The work builds on the European Pillar of Social Rights, adopted by the EU Commission in 2017. Principle 19 is about housing assistance and homelessness, and mandates the EU to work on the issue. The Commission published its action plan at the start of March, and while it does not go far enough, it is an important step. Alongside this are plans to launch a “collaboration platform” in June for EU states to work together and share information on homelessness. The EU can also play an important role in improving the quality and availability of data along with developing a common set of concepts and policy language for homelessness.

Van Sparrentak’s report also calls for all EU member states to have a homelessness strategy, with the EU providing coordination, and that the main solution is providing permanent secure housing – basically a roll-out of Housing First across Europe, the MEP explains. Intersectionality is another key part of the Green approach to homelessness, with specific attention being called for to meet the specific needs of groups such as LGBT youth and women, particularly as the range of people who are homeless has become more diverse. One area where the Commission could take stronger action, according to Van Sparrentak, is on the criminalisation of homelessness. In Hungary for example, sleeping rough is a criminal offence something which breaches EU law.

The big challenge, and where the EU could potentially have the most impact are the underlying causes of the rise in homelessness. Austerity policies mean there is now a 57-billion-euro gap in investment in affordable and social housing across Europe, this is happening alongside the privatisation of public housing and deregulation of private rented housing. “What you see is a lot of people falling between the cracks in the social housing market and the private rented market,” Van Sparrentak explains. They are neither able to access a dwindling social housing stock nor afford private rented housing. While national governments hold much of the power to tackle homelessness, the EU can play a role in it too by supporting national and local governments. EU fiscal rules currently focus heavily on balanced budgets and eliminating deficits, which does not allow for the level of investment needed in housing and other infrastructure. These rules, however, have essentially been suspended until 2023 due to the pandemic and could inspire a generous attitude towards investment to help EU economies recover.

On a broader level, the EU can help tackle housing speculation. Big institutional companies such as Blackstone have bought up housing and used the value of the homes and the stream of rental income to borrow and buy up more housing. What the arrangements mean in practice is that these companies can earn money from the resale, rental income, and borrowing against both of these through bonds. The EU can use its powers on banking and financial rules to have an impact, drawing from existing policies and ongoing research. “This is one of the big stories in what is driving up prices and is causing the housing crisis,” says Van Sparrentak. In 2019, the then UN Special Rapporteur on Housing and the Working Group on Business and Human Rights wrote to Blackstone outlining their concerns about the role of the company in the financialisation of housing. Blackstone robustly defended itself in response.

The scale of homelessness is likely to grow in cities and beyond as governments decide on how best to respond to the economic damage created by the pandemic. In the UK, the government has already signalled that it will likely embrace another set of austerity policies and cut public spending. This will undermine progress made by local governments to tackle homelessness through building social housing and Housing First-type policies. They will put future generations at a greater risk of becoming homeless. Greens can play a vital role in resisting these trends at a national and European level while making a difference locally where they have power.

https://www.greeneuropeanjournal.eu/how-greens-in-government-are-tackling-homelessness/

When Canada’s Housing Bubble Pops, It Will Cause Misery and Ruin

The price of Canadian homes has increased faster than those of any other member of the OECD. Rising interest rates now threaten to bring the market crashing down, destroying the lives of millions in the process

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In the last two decades, home prices have gone up by 375 percent in Canada. (Brett Gundlock/Bloomberg

BYJOHN CLARKE
JACOBIN
01.06.2022

As recently as ten years ago property speculators were a minority amongst Ontario’s home buyers. Investors now surpass first-time buyers as well as the total number of people moving between homes. According to a recent report, between January and August of last year investors were responsible for a quarter of house purchases in the province.

These speculative investments are, of course, driving up prices. They are also creating major problems for the economy as a whole because the rising cost of housing has increased the amount of private debt held by individuals. Whilst interest rates have remained low this debt has been sustainable. The possibility of hikes now threatens to bring Canada’s housing market crashing down.
A Disaster Waiting to Happen

The Bank of Canada is warning that a “frenzy of real estate investment,” combined with impossibly high levels of household debt, “could destabilize the economy as rates start to rise.” The central bank’s deputy governor Paul Beaudry suggests that a reckoning is fast approaching because the Bank of Canada now plans to increase interest rates. Beaudry warns that

A key concern here is that financially stretched households have little breathing room to absorb any disruption to their income. A job loss could force many to drastically cut their spending to keep servicing their debt.

In the last two decades, home prices have gone up by 375 percent in Canada. These increases have been especially marked in in Toronto and Vancouver, where prices have swelled by 450 and 490 percent respectively. This rise far outstrips any other developed markets in the world. In recent years, an incredible gulf has opened between house prices and real income. Even high-level investment bankers such as David Doyle, head of North American Strategy & Economics at Macquarie Group, have rung alarm bells. “Prices,” according to Doyle, “are totally disconnected from the fundamentals.”

The easiest way to appreciate how serious things have become is to compare the situation in Canada with that of the United States. The United States’ sub-prime mortgage crisis was deeply linked to the 2008 financial crash and the Great Recession it caused. Canada, however, didn’t experience the same kind of forced “correction” as its North American neighbor. The reckless inflation of its profit driven housing bubble has continued unabated. Whilst US investors on the whole took stock of the enormity of 2008 and stopped viewing housing as a safe investment, their Canadian counterparts remained bullish, continuing to fuel a debt driven housing market.

In February, a study of “the world’s least affordable housing markets” showed how Canada’s speculative bubble has made Toronto and Vancouver one of the world’s frontrunners when it comes to unaffordable housing. Using a scale in which a rating of over 5.1 is “severely unaffordable,” Toronto, with a score of 8.6, beat out London and San Francisco. Vancouver at a staggering 11.9, is entirely off the chart. The US Federal Reserve’s “Exuberance Index” has shown that, as one media report puts it, “Canadian home prices have been in bubble territory for 6 years without a correction.”
Human Costs

The cause of this instability is the commodification of housing, and unimpeded it will lead to further indebtedness on the part of private buyers and threaten millions with economic dislocation. It also drives up rents, forces precarious housing on many, and forces growing numbers of people into homelessness. The Canadian Mortgage and Housing Corporation (CMHC) has produced data showing that “rents are going up, pandemic or not.”

Between October 2018 and October 2019, average rents for a two bedroom unit in Canada increased at five times the general rate of inflation. The fact that the incomes of the poorest Canadians have remained stagnant during this period has not affected the pace at which prices have risen. Ontario’s social assistance benefits remain frozen despite housing costs shooting up.


Predictably, the threat of eviction hangs over the heads of a huge number of tenants. The Globe recently reported that in Vancouver, the Canadian epicenter of unaffordable housing, 10.5 percent of renter households moved from their previous home because they were evicted. The figures for Toronto and Montreal are 5.8 and 4.2 respectively.

When landlords want to evict tenants, the legal system and its enforcers are only too ready to provide support. During the Easter holidays, landlords removed a Toronto father and his two young children from their home with the assistance of dozens of police officers who stormed into his apartment on Good Friday. This was a day before the Ontario government enacted a province-wide shutdown. As the tenant put it, “there’s no justification to sending twenty-six cruisers to evict a single peaceful man, and his two children. That is inhumane.”

As you would expect, the rise in housing prices has led to a rise in homelessness. In major cities, local authorities, instead of working toward meaningful solutions, have decided to sweep the problem under the rug. Toronto has seen a major increase in homeless encampments, often set up in public parks. The pandemic has increased the visibility of urban destitution. Cities have responded by increasingly resorting to brutal police operations to clear encampments.

In the summer, police arrested twenty-six people during skirmishes between protester and law enforcement. The arrests followed a police operation to drive homeless people out of a Toronto park. Similar methods have been employed in other Canadian cities, including a particularly ugly police attack in Halifax. According to a local housing advocate, “these people had nowhere to go, despite the doublespeak that we’re hearing from the city that everyone has options.” Nevertheless, City Hall is determined that the post-pandemic “recovery” won’t include people who have been priced out of housing.

At the start of the 1990s, Canada’s governments slashed funding for social housing and opened the housing market up to complete domination by private interests. Today, as housing prices and rents skyrocket, and homeless shelters overflow, mainstream public policy is entirely reconciled to the idea that housing must be a commodity.

The Trudeau government has recently made a lot of noise about the need for a housing fix, but while the crisis spins out of control, it appears that the Liberal’s solutions amount to little more than empty talk. In Toronto, the largest city in the country, both left and right members of City Council are wedded to the pro-property developer position that including some “affordable” units in their reckless buildout of upscale housing is a reasonable solution to the crisis.
Real Solutions

It’s clear that only a real challenge to the commodification of housing can make a meaningful difference in this situation. In the wake of the dislocations and hardships that were triggered by the pandemic, many politicians have paid lip service to the need for a “just recovery.” The reality, however, is that any gains that working people make during the period ahead will have to be fought for.

The struggle for housing will require a massive expansion of public housing. The call for public housing will have to be clearly articulated and very specific local demands will have to be put forward. However, to press governments into public housing development, mass social action will be required.

The breakthrough in the fight for union rights in North America took place in the 1930s, when workers occupied the factories in order to press their demands. Under present conditions, a comparable method of advancing the struggle for housing is possible. As investors take over the housing market, it is estimated that 1.3 million homes are sitting empty in Canada.

According to a Toronto lifestyle magazine, the city “has more construction cranes than any city in North America with roughly two thirds of them working on condos.” This construction represents an astonishing market failure — a staggering sixty-five thousand condo units in the city are thought to be presently unoccupied, serving no other purpose than speculative investment.

The housing crisis requires major social mobilization. The occupation of these empty homes by all the people who the market has displaced would take the challenge of housing beyond the limits of abstract debate and into the realms of real action. It would be a real, grassroots “build back better” initiative.

Canada’s housing market is sick and grossly distorted. It causes tenants to live in constant fear of eviction and ensures that the unhoused sleep on the streets. The subordination of housing needs to profit has created a dangerous bubble that threatens an economic catastrophe. An effective “correction” to this situation could begin with a movement of people on the streets who insist that housing is a human right.

ABOUT THE AUTHOR
John Clarke got involved in anti-poverty organizing in London, Ontario, in the 1980s and was an organizer with Ontario Coalition Against Poverty (OCAP) for almost thirty years. Presently, he is the Packer Visitor in Social Justice at Toronto’s York University.

$213 billion plan to save affordable housing

President Biden’s massive infrastructure proposal includes some of the most ambitious affordable housing measures in history.

President Joe Biden has just proposed one of the most significant investments in affordable housing in the nation’s history.

Inside the far-reaching $2.25 trillion infrastructure plan just announced by the Biden administration is $213 billion to support affordable housing. The plan’s overview calls for the funding to “produce, preserve, and retrofit more than 2 million affordable and sustainable places to live.”

That includes building or preserving more than 1 million housing units that check a laundry list of goals: affordable, resilient, accessible, energy-efficient, and electrified. The plan would also invest $40 billion to improve the infrastructure of the roughly 1.2 million units of public housing that currently exist.

The plan would invest 1% of GDP over the next eight years to achieve its broad goals, and, if passed along with the Biden administration’s proposed corporate tax increase, could be paid off in 15 years.

The proposed funding represents a critical and timely investment in a type of housing stock that’s been undersupplied for years, according to Priscilla Almodovar, CEO of the national affordable housing nonprofit Enterprise Community Partners. “This investment is a huge down payment on an incredible need,” she says. “This would be the largest new investment in affordable housing that we’ll likely see for a decade.”

Rather than solely offering direct federal funding, the plan will provide tax credits, competitive grants, and other forms of support to spur partnerships between local government, nonprofits, and private developers, and it will leverage the government’s money with the resources of the private sector. “We’re not building public government housing anymore. That’s an old way of thinking. Housing today is financed through a public-private partnership,” Almodovar says. “By investing in housing, this is a once-in-a-generation opportunity to bring more private dollars into infrastructure.

As one of the biggest housing nonprofits in the country, Enterprise sees this plan not only as a way to fill in some of that unmet demand for affordability. It will also be a massive source of jobs, according to Almodovar, who previously served as a managing director at JPMorgan Chase, leading the bank’s commercial real estate and community development businesses.

“Housing construction is the fastest way to create jobs for people. When you look back at the 2008 crash and the American Recovery and Reinvestment Act, it was the investment in housing that moved jobs into the economy fastest,” Almodovar says. “You could immediately have shovel-ready projects. We estimate that, the way housing is financed today, it supports nearly 100,000 new jobs every year.”

The proposed scale of the building is ambitious, especially when it has been so hard for so long to build affordable housing, even in communities that claim to want it. From local policies that hamper the size and effectiveness of proposed affordable housing projects to the not-in-my-backyard opposition of self-interested homeowners, it will take more than money to get communities on board.

The plan tries to address some of these nonfinancial barriers by also focusing on eliminating exclusionary zoning laws, the structural policies on minimum lot sizes, parking requirements, and preference for single-family homes that often prevent affordably priced development from being legally and economically feasible. The plan would create a new grant program that awards funding to communities that remove these barriers.

In addition to supporting traditionally renter-centric affordable housing, the plan also includes a proposed $20 billion worth of tax credits over the next five years to build or rehabilitate 500,000 homes geared toward low- and middle-income home buyers. By increasing the supply of more affordably priced homes, the plan aims to help more people build the wealth and equity that come along with homeownership. In line with the equity goals laid out in the Biden campaign’s housing platform, the plan would focus this and many other elements on underserved communities. After decades of discrimination and disinvestment in these communities, this will also be an uphill battle.

Housing aside, the plan includes similarly historic levels of investment in other areas of infrastructure, from transportation ($620 billion) to the manufacturing industry ($580 billion) to reconnecting urban neighborhoods that were cut in half by the construction of the interstate highway system ($20 billion).

For all its ambition, the plan is still just a plan. Though Democratic control of both the House and Senate give it a leg up, the likelihood that the plan will be approved as is with necessary Republican support is low. How the plan changes remains to be seen, but if it moves ahead, housing is sure to remain one of its major pillars.

“It’s a historic proposal,” Almodovar says. “As a country, we have to think big here. Housing is a fundamental part of communities, and this proposal acknowledges that.”