It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
The Global Housing Market Is Broken, and It’s Dividing Entire Countries
The dream of owning a home is increasingly out of reach. Democratic and authoritarian governments alike are struggling with the consequences.
Graffiti made during a protest in May, in Minnesota, calling for an end to housing evictions during the pandemic. Photographer: Michael Sulik/Universal Images Group/Getty Images
By Alan Crawford September 19, 2021, 3:01 PM MDT
Soaring property prices are forcing people all over the world to abandon all hope of owning a home. The fallout is shaking governments of all political persuasions.
It’s a phenomenon given wings by the pandemic. And it’s not just buyers — rents are also soaring in many cities. The upshot is the perennial issue of housing costs has become one of acute housing inequality, and an entire generation is at risk of being left behind.
“We’re witnessing sections of society being shut out of parts of our city because they can no longer afford apartments,” Berlin Mayor Michael Mueller says. “That’s the case in London, in Paris, in Rome, and now unfortunately increasingly in Berlin.”
A Winter of Housing Discontent protest in Dublin in Sept. Ireland still bears the scars of a crash triggered by a housing bubble that burst during the financial crisis. Photographer: Brian Lawless/PA Images/Getty Images
That exclusion is rapidly making housing a new fault line in politics, one with unpredictable repercussions. The leader of Germany’s Ver.di union called rent the 21st century equivalent of the bread price, the historic trigger for social unrest.
Politicians are throwing all sorts of ideas at the problem, from rent caps to special taxes on landlords, nationalizing private property, or turning vacant offices into housing. Nowhere is there evidence of an easy or sustainable fix.
In South Korea, President Moon Jae-in’s party took a drubbing in mayoral elections this year after failing to tackle a 90% rise in the average price of an apartment in Seoul since he took office in May 2017. The leading opposition candidate for next year’s presidential vote has warned of a potential housing market collapse as interest rates rise.
China has stepped up restrictions on the real-estate sector this year and speculation is mounting of a property tax to bring down prices. The cost of an apartment in Shenzhen, China’s answer to Silicon Valley, was equal to 43.5 times a resident’s average salary as of July, a disparity that helps explain President Xi Jinping’s drive for “common prosperity.”
In Canada, Prime Minister Justin Trudeau has promised a two-year ban on foreign buyers if re-elected.
The pandemic has stoked the global housing market to fresh records over the past 18 months through a confluence of ultra-low interest rates, a dearth of house production, shifts in family spending, and fewer homes being put up for sale. While that’s a boon for existing owners, prospective buyers are finding it ever harder to gain entry.
What we’re witnessing is “a major event that should not be shrugged off or ignored,” Don Layton, the former CEO of U.S. mortgage giant Freddie Mac, wrote in a commentary for the Joint Center for Housing Studies of Harvard University.
In the U.S., where nominal home prices are more than 30% above their previous peaks in the mid-2000s, government policies aimed at improving affordability and promoting home ownership risk stoking prices, leaving first-time buyers further adrift, Layton said. Housing Affordability Is Getting Worse
In many OECD countries, the price to income ratio has risen dramatically since 1995
Housing Affordability Is Getting Worse
In many OECD countries, the price to income ratio has risen dramatically since 1995
Source: OECD house price to income ratio, percentage change from 1995 to 2020
The result, in America as elsewhere, is a widening generational gap b
Source: OECD house price to income ratio, percentage change from 1995 to 2020
The result, in America as elsewhere, is a widening generational gap between Baby Boomers, who are statistically more likely to own a home, and Millennials and Gen Z — who are watching their dreams of buying one go up in smoke.
Existing housing debt may be sowing the seeds of the next economic crunch if borrowing costs start to rise. Niraj Shah of Bloomberg Economics compiled a dashboard of countries most at threat of a real-estate bubble, and says risk gauges are “flashing warnings” at an intensity not seen since the run-up to the 2008 financial crisis.
In the search for solutions, governments must try and avoid penalizing either renters or homeowners. It’s an unenviable task.
Sweden’s government collapsed in June after it proposed changes that would have abandoned traditional controls and allowed more rents to be set by the market.
In Berlin, an attempt to tame rent increases was overturned by a court. Campaigners have collected enough signatures to force a referendum on seizing property from large private landlords. The motion goes to a vote on Sept. 26. The city government on Friday announced it'd buy nearly 15,000 apartments from two large corporate landlords for 2.46 billion euros ($2.9 billion) to expand supply.
Anthony Breach at the Centre for Cities think tank has even made the case for a link between housing and Britain’s 2016 vote to quit the European Union. Housing inequality, he concluded, is “scrambling our politics.”
As these stories from around the world show, that’s a recipe for upheaval.
Amid inflation, a housing crisis and conflict with Trudeau, Alberta adopted rent control — 48 years ago
CBC Thu, October 19, 2023
Sky-high inflation. Exorbitant rent increases. Conflict between Alberta and Prime Minister Trudeau.
The year is not 2023.
It's 1975.
Albertans were grappling then, like they are now, with a surging cost of living, high interest rates and a housing crisis.
The Progressive Conservative government of premier Peter Lougheed had just been re-elected in the spring with a commanding majority. That summer, amid growing calls from tenants groups who felt gouged by what they described as frequent and unreasonable price increases from landlords, the PCs were adamant that rent controls were not the solution.
By autumn, they had changed their minds.
In the face of mounting pressure both locally and federally — as prime minister Pierre Trudeau's government prepared its own set of wage and price controls — the Alberta government reluctantly adopted legislation in December 1975 that put an 18-month cap on rent increases in the province: no more than 10 per cent in 1976 and no more than nine per cent in the first six months of 1977. After that, the rent-control law would be phased out.
It was a controversial move. Free-market advocates abhorred the government intervention, while tenants groups felt the rules were too lenient. Enforcement was also a challenge, with numerous cases ending up in court.
A Calgary Herald article from Oct. 22, 1975, in which Calgary-Buffalo PC MLA Ron Ghitter discusses 'reluctantly and unhappily' calling for rent control in Alberta. (Newspapers.com/Screenshot)
Today, Ron Ghitter looks back at the rent control legislation as an extraordinary measure at an extraordinary time. He was the PC MLA for Calgary-Buffalo and one of the architects of Alberta's landlord-tenant policy of the 1970s. And while he sees many parallels from that era to today, he doesn't believe a return to rent control is the right way to tackle the current housing crisis.
"I would be opposed to it personally," he said in an interview. "The problems that we've got are much deeper than what rent controls will solve."
Alberta's current United Conservative government has also rejected recent calls for rent control in the province.
So how did the government of 1975 come to adopt the policy, albeit reluctantly?
A combination of factors coalesced at the time, some of which may sound familiar to Albertans today, while others may seem quite foreign. And rent control wasn't the only measure the provincial government took in response to the housing crisis of the era. Additional policies included a temporary ban on apartment-to-condo conversions and a renters' tax credit. Those worked in concert with long-since-expired federal policies aimed at encouraging the construction of more rental housing.
Opinions then, like today, differed on which policies would provide the best solutions. In retrospect, there is still disagreement. But the experiences from nearly half a century ago still hold relevance — and may offer some lessons — when it comes to the housing crisis facing so many people today. What's old is new again — sort of
On the surface, the parallels between the mid-1970s and today seem numerous.
Economically, both eras saw high levels of global inflation, high interest rates, rapid population growth in Alberta and rapidly surging rents — especially in Calgary.
Politically, both eras saw a conservative government in Alberta that was often at odds with a Liberal government in Ottawa — led by a prime minister named Trudeau.
Pierre Trudeau, left, was prime minister in 1975. His son, Justin Trudeau, is prime minister in 2023. (AFP/Getty Images, Evan Mitsui/CBC)
Both eras also saw the Alberta NDP calling for more government action on affordable housing, led then by Grant Notley and today by his daughter, Rachel Notley.
Then, a group calling itself the Calgary Tenants' Committee circulated a rent-control petition that had amassed 12,000 signatures by November 1975. Among the signatories were two Calgary aldermen (although both said they didn't fully support the petition's demands.)
At first, the PC government of the 1970s came out against the idea, saying rent control would inhibit the construction of new rental housing, disincentivize maintenance on existing rental properties and ultimately harm the lower-income tenants it aimed to protect.
"The record in other parts of Canada and elsewhere indicates that such tenants in the long term suffer greater indignities when rents are controlled," Alberta's consumer affairs minister, Graham Harle, was quoted as saying in a July 1975 newspaper article.
Nearly a half-century later, Community and Social Services Minister Jason Nixon made much the same argument.
At left, Graham Harle, who served as Alberta's consumer affairs minister in 1975. At right, Jason Nixon, the province's current minister of community and social services. (Newspapers.com, Alberta.ca)
"I don't want to see more good, hard-working people become homeless," he told the Calgary Sun in August 2023. "That's what rent control in the end will do. It will create less space for people to be able to live."
The current Alberta government has so far stuck to its position.
So why did the Alberta government of 1975 end up backtracking?
Then vs. now
One difference between then and now has been the target of public ire over the housing crisis.
Today, much of the attention in Calgary has been focused on the municipal government, especially as it debated a contentious new affordable housing policy earlier this year. Federally, the opposition have also made housing a key point of attack on the Liberal government.
Meanwhile, the Alberta government has not faced the same level of political pressure.
Back in 1975, by contrast, the opposition Social Credit party had been calling for rent control specifically and, when the PCs finally introduced it, NDP Leader Grant Notley criticized the legislation as not going far enough.
"There was great pressure on us as a government to do something about rent," Ghitter recalled of the era.
Grant Notley, left, led the Alberta NDP in 1975. His daughter, Rachel Notley, leads the Alberta NDP in 2023. (CBC Archives, Jeff McIntosh/The Canadian Press)
Adding to the local pressure was a situation in federal politics that had not been seen since wartime and has never been seen again since. To deal with spiralling inflation in 1975, Ottawa brought forward a broad set of wage and price controls — a staggering degree of government intervention that was ultimately tested (and approved) by the Supreme Court.
Landlord-tenant relations, as a provincial responsibility, were outside Ottawa's direct purview but the federal government exerted pressure on provincial premiers to go along with the national plan when it came to housing costs.
In the end, Lougheed — sometimes known as "Peter the Pink" by more hard-line conservatives — agreed with the feds, but on the condition that agricultural and energy products would be exempted from federal price controls. Also, Alberta's rent control would be phased out after 18 months instead of the the three-year period Ottawa had been asking for.
The Alberta premier struck a conciliatory tone in announcing the about-face on rent control, saying the province needed to join the national effort to break the cycle — and psychology — of inflation.
"I agree with the prime minister's statement that Canadians are developing a significant fear of of inflation and are trying to overcompensate for the most severe inflation they can imagine," Lougheed said during the opening of the provincial legislature in November 1975.
"This attitude must be checked, and for this reason Alberta will work with the federal government."
Similar measures would be harder to imagine in today's political climate.
The federal wage controls were sweeping in their scope and scale, and nothing remotely close has been proposed by the current Liberal government in response to the modern inflation situation.
And Alberta Premier Danielle Smith, to date, has also been less willing than Lougheed to find common ground with the current Trudeau government on a host of issues — especially those involving federal overlap into provincial jurisdiction.
How it worked out
Opponents of rent control feared Lougheed would break the 18-month promise, but his government indeed began to unwind its policy in June 1977.
It took a phased approach and, by June 1980, all units that had been subject to rent control in Alberta were decontrolled.
In 1982, the Canada Mortgage and Housing Corporation commissioned a report into the Alberta government's dalliance with rental-market regulation.
It found the province's policy had largely managed to achieve the goal of mitigating the housing crisis in the short term without stifling the construction of new rental housing in the longer term — which was a primary concern among rent-control opponents. It credited the short duration of the policy and nuances in the regulation that allowed landlords to pass on some additional costs to tenants in exceptional circumstances.
"These two aspects of the program served to alleviate any negative impacts on the rental housing market," the report reads. "New housing starts do not appear to have slowed due to rent control by itself."
The CMHC report also praised the decision to phase out the rent controls over time rather than having them end abruptly.
"The decontrol scheme did serve to soften and spread out the increases that would have taken place had the controls been lifted with no thought to the resultant increases that might occur," it reads.
Another key aspect of the legislation was the prohibition on the conversion of rental apartments to condominiums for sale, which the report found was effective and "made any transfers out of the rental market negligible."
There was also another provincial policy that helped ease the burden on renters during that era. Renters tax credit
Flip through newspaper archives from the 1970s and, scattered among the many articles, opinion columns and letters to the editor debating the pros and cons of rent control, you'll find advertisements from the Alberta government promoting its "renter assistance credit."
This was a benefit individuals could claim on their income taxes and was available to most people who paid rent. The value of the benefit was on a sliding scale: the amount of money you could receive diminished with your household income.
Today's rent assistance, by contrast, must be applied for separately and is aimed at low-income people living in subsidized units provided by housing management bodies.
A newspaper ad from 1975 promoting the Alberta government's renter assistance credit, which was a benefit claimed on individuals' income taxes. (Newspapers.com)
Alberta kept the renters tax credit even after ending rent control, and even boosted it. By 1983, it was worth up to a maximum of $500 annually minus one per cent of a household's taxable income.
The province cancelled the renters tax credit in its 1987 budget, amid a host of austerity measures brought in after a crash in oil-and-gas royalties. By that time, the rental market had completely changed as well, and provincial treasurer Dick Johnston defended the decision, noting "the vacancy rate across most of Alberta is, in fact, at the highest levels ever."
Today, you can still find tax credits aimed at renters in other provinces. Ontario's Trillium Benefit and Manitoba's Residential Renters Tax Credit, for example, both offer modest benefits to low-to-moderate-income tenants.
British Columbia also introduced a new renter's tax credit in its 2023 budget. Lower-income tenants in that province will be able to claim up to $400 in benefits when they file their income taxes in 2024.
Tim Richter, president and CEO of the Canadian Alliance to End Homelessness, says these types of benefits administered through the tax system are an easier and more efficient way for tenants living in precarious rental situations to get financial support, compared to government programs that require a separate application process.
But he also noted that Ontario, Manitoba and B.C. each have some form of rent control today, too.
He cautioned that the hypothetical return of a renters tax credit in Alberta could have unintended consequences and end up benefiting landlords more than tenants.
"Alberta doesn't have rent control," Richter said. "I would be worried about a very large-scale subsidy of consumers being captured by landlords who now realize that, 'Everybody is going to get a subsidy of X per cent, so I'm just going to raise my rent by X per cent.'" Lessons from the past?
In retrospect, Ghitter said the rent controls his government adopted nearly a half-century ago were ultimately "a negative force, economically" and shouldn't be repeated because he believes they would slow the construction of new rental housing.
"What you need to do, really, is you need to have programs that will create more affordable housing," Ghitter said.
One 1970s-era policy he would like to see resurrected is the Multiple Unit Residential Buildings (MURB) provision to the federal Income Tax Act, which allowed investors to claim depreciation and some other costs of building rental apartments against unrelated income.
"It invited investors — net worth people, doctors, lawyers, whatever — to invest in construction of multi-family housing," Ghitter said. "And it was a tax advantage to them. The investor could write that off immediately and they were hopeful that the housing would bring them some benefits."
The CMHC also commissioned a study into the MURB program in 1981, which found the policy to be "an important component of the recovery in rental construction in the mid to late 1970s."
"However, it appears likely that, if left to its own devices, the rental market would have begun to respond to the excess demand on its own — albeit at higher rents."
The report adds: "The main beneficiaries of the MURB provision from the supply side of the market have been the developer/promoters and investors with high marginal tax rates."
In a recent briefing note from the CMHC to Housing Minister Sean Fraser (obtained by CBC News under access-to-information laws), the MURB policy was credited with encouraging the construction of about 195,000 units at a cost of $2.4 billion in forgone taxes.
"Since the elimination of the MURB program in 1982, tax policy in relation to rental housing development has remained largely unchanged and current tax regulations are less favourable to rental investment than have been historically," the briefing note said.
Richter, with the Canadian Alliance to End Homelessness, believes the MURB program was an effective tool. After it ended, he said, "you saw the construction of rental housing drop off and investors getting more into things like condominiums, which … obviously had a better return."
"So tax incentives are a really, really powerful incentive," he said.
Ghitter believes the key challenge with today's housing crisis is a lack of supply. He believes the role of government should be to encourage the construction of new rental housing, rather than to restrict the price of rent. Over the long haul, he believes that will bring the most relief to people struggling to afford their housing.
Richter agrees a permanent solution is needed but also says people struggling to pay rent right now need immediate supports.
"You want to provide relief to people in the short term, for sure," he said. "But in the long term, you know, you've got to build the housing supply and you've got to have a housing supply that matches with the growth of the province, or else you'll just have people permanently struggling to pay rent, right?"
Friday, July 24, 2020
The Pandemic Presents The Chance To End Homelessness In Canada For Good
It’s hard to social-distance at home if you don’t have a home. By Melanie Woods
This story is part of After The Curve, an ongoing HuffPost Canada series that makes sense of how the COVID-19 crisis could change our country in the months and years ahead, and what opportunities exist to make Canada better.
Canada’s public health messaging during the COVID-19 pandemic has been clear and consistent: stay home, stay safe.
But Canadians experiencing homelessness don’t have that option, whether they’re camped out in streets or parks, or packed into crowded shelter spaces. At least 35,000 people experience homelessness every night in Canada. The pandemic has thrown that number into sharp relief, as the disease has threatened a population already at higher risk of mental and physical health complications.
Municipal, provincial and the federal governments have acted swiftly to address the increased risk posed to people experiencing homelessness, injecting funding into the non-profit sector and temporarily moving people into hotels and hockey arenas. In Montreal, masks are being distributed to the homeless population, the B.C, government gave out 3,500 smartphones to low-income people to help them access services closed by the pandemic, and Winnipeg has set up a testing site specifically for the homeless population. Homelessness advocates even launched a lawsuit against the City of Toronto to ensure proper social distancing in shelter spaces. The suit was settled in mid-May. CHRIS YOUNG/THE CANADIAN PRESS
Doug Johnson Hatlem, a worker at The Sanctuary, a respite centre in Toronto, carries tents to be distributed to members of the homeless community on April 19 2020.
Canadian Alliance to End Homelessness president and CEO Tim Richter says these measures are all proof that governments are capable of acting on homelessness long-term.
“We can choose to move more aggressively and fix this problem, and that’s one of the things that these emergency measures have proven — that we can act rapidly and move people into housing if we choose,” he told HuffPost Canada.
Many experts argue that the policies put in place to abet homelessness during the pandemic could pave the way for a bigger institutional change, and even propel the push to end homelessness altogether.
They’ve been calling for it for years, but it might take a global pandemic to actually end homelessness in Canada. That’s one of the things that these emergency measures have proven — that we can act rapidly and move people into housing if we choose.CAEH president and CEO Tim Richter
Vancouver’s Oppenheimer Park encampment — which at one point was occupied by upwards of 300 people and was one of the country’s largest encampments — was ordered cleared early in the pandemic to prevent spread of the disease. At least 265 people were moved into temporary shelter in empty hotels or other spaces by early May. Similar moves were made for long-standing encampments in Victoria as well.
“This is only the first step; there’s more work to be done to get housing, and there’s more work to be done in the community, and we’re doing that work,” B.C. Minister of Social Development Shane Simpson told reporters at the time.
Sarah Canham is an adjunct professor in gerontology at Simon Fraser University. She says prior to the pandemic, homelessness was largely talked about by the government and media in relation to social housing or general housing policy.
“Pre-COVID-19, when we heard about people experiencing homelessness, it was really at times when there would be new housing developments and there would be a sense of NIMBY-ism in our communities,” she said. DARRYL DYCK/THE CANADIAN PRESS
Condos and apartment buildings are seen in downtown Vancouver, B.C. on February 2, 2017.
In our new world of physical distancing and personal protective equipment, jam-packed shelters and encampments are suddenly not just a housing issue, but also a public health crisis. And that means a lot more average Canadians, who otherwise might not think about homelessness issues, are suddenly keenly aware of the dangers posed by a pandemic in the current system.
“But now, people are noticing that it’s unsafe for people to be in overcrowded shelters where there aren’t medical staff on hand to support the outbreak of a pandemic,” Canham said. “It isn’t appropriate for people to be living on the street when businesses that they use on a daily basis for washing their hands on a regular basis or using the toilet facilities are no longer open.”
In April, several cases of COVID-19 were confirmed in Vancouver’s Downtown Eastside, where hundreds of people live in close proximity on the street, in camps like Oppenheimer or in crowded shelters. Early in the pandemic, officials were testing at three times the rate as the rest of Vancouver to catch any cases that arose.
Canham said that the “humanizing factor” of the pandemic’s effect on homeless people spurred fast action at various levels of government to address homelessness — actions academics and activists like her have been calling for for years. DARRYL DYCK/THE CANADIAN PRESS
Police officers are seen at a homeless camp at Oppenheimer Park in the Downtown Eastside in Vancouver, on April 26, 2020.
“It’s shining a bit more of a light on the humanizing factor of some of the daily struggles that people have been encountering for decades here in Canada,” she said.
Some of these actions — such as housing people in empty hockey arenas or convention spaces — are temporary. When hotels saw business crash as borders closed and tourism dried up, an opportunity presented itself to temporarily house many of B.C.’s homeless population. Around 1,000 people between Vancouver and Victoria were offered the chance to relocate from encampments to these hotels.
But other provincial and federal actions are more permanent. The B.C. government purchased a hotel outside of Victoria to be converted into social housing and ease the congestion at a local encampment long-term. It will be operated by Our Place Society, a local organization that already offers support to the homeless, in partnership with B.C. Housing to provide shelter, meals and harm-reduction services related to drug use. The hotel’s pub is being converted into a safe consumption site, and residents will have access to regular wellness checks — and even the chance to bring their dogs and other personal items into their new living accommodations.
“We intend to serve this vulnerable population with dignity,” Grant McKenzie, Our Place spokesperson, said in a statement.
In early April, Trudeau’s government also announced $157 million in funding to shelters and other homeless relief efforts, with specific money going to women’s and Indigenous-focused services.
“It’s not just an issue of giving a safe place for people to escape violence or to give them shelter when they don’t have a home,” Trudeau said at the time. “It’s really an issue of protecting everyone in our society against COVID-19. That includes the most vulnerable.”
Prompted by these early moves to address COVID-19 and homelessness, advocates have come forward with calls to action at the municipal, provincial and federal levels to address homelessness long-term, arguing that this isn’t something that can be fixed by “band-aid” solutions
One such call was released April 27 by a collective of 40 housing advocates and researchers in association with the University of British Columbia’s Housing Research Collective, chaired by professor Penny Gurstein.
The document’s authors outline eight key areas the federal government can continue to address homelessness as part of the post-COVID-19 economic stimulus package.
“We are in crisis mode as individuals and organizations, but we also are looking to a better future. We write to suggest ways to get the economy moving again, through investing in infrastructure that can help reduce inequalities, improve the social determinants of health, and uphold human rights,” they note in the introduction.
The call includes a specific federal Indigenous housing strategy, emergency rent assistance and bans on evictions for all Canadians, building up existing social housing stock and reforming housing and tax policy to disincentivize rising home prices.
Gurstein told HuffPost that governments must start planning to maintain these supports after the crisis is over.
“It would be unconscionable for people, once the pandemic’s worst effects are over, to just say ‘well, you’re on your own again,’” she said.
Gurstein said housing has been a significant part of economic recovery plans dating back to the second World War. And it can’t just be affordable housing for home-owners, but renters and the homeless too.
“You have to be really thinking of how do you actually do a stimulus package that addresses housing for people that are not in the market. That would be non-market housing,” she said.
Alongside the UBC call to action, the Canadian Alliance to End Homelessness (CAEH) has also launched a campaign called “Recovery For All,” advocating for housing as part of any coronavirus recovery plan.
And if you have forgotten the eighties began with an oil boom but saw global recession, the crash of the oil and gas markets and the largest crash on wall street, 1987, since 1929.
While all those folks on the cable Business news channels in the U.S. and on Fox on the weekend were navel gazing over whether the U.S. economy was in a pending recession or not they missed this run on the bank. One caused by the U.S. mortgage meltdown.
Of course that's because it was in the UK. And banks were open on Saturday. BBC showed folks lined up outside the Northern Rock mortgage bank waiting to remove their deposits something not seen in any other market correction, err crash, since 1929. "Remember, 1928 was a credit bubble that popped in '29"
The firm has been withering under the harsh spotlight of media glare on the mortgage-lending mess, ever since it came to light Friday that Northern Rock needed a British central-bank bailout. Unfortunately, the bank built its lending business on taking in loads of short-term borrowings, followed by loan securitization and sales. Over the past few months, as credit markets have finally decided to reevaluate risk, both ends of that pipeline have gotten seriously clogged.
THE BANK OF ENGLAND HAD NO choice but to agree to provide emergency liquidity last week to ailing U.K. mortgage lender Northern Rock, even at the risk of being seen as supporting a bank with a flawed business model.
Clearly, Northern Rock's customers and the impact that the lender's collapse would have on the rest of the U.K. banking sector, the housing market and the broader economy have been uppermost in the BoE's mind.
The queues of customers outside Northern Rock's branches Friday, seeking to withdraw their savings despite assurances from the central bank and the government that Northern Rock (ticker: NRK.U.K.) is fundamentally sound, proves the point.
But investors aren't buying the idea that Northern Rock will weather the liquidity crunch. The stock was down 25%, to 483 pence (about $9.85), in late Friday trading in London, even though the bank is in no immediate danger of going under.
Northern Rock isn't guilty of reckless lending. The problem is that the bank, the U.K.'s fifth-largest mortgage lender, sources a large proportion of its funding from the wholesale market through covered bonds and the securitization of mortgages. Only 25% of its funding comes from customers' deposits, versus 65% for a typical U.K. bank.
This wouldn't happen in Canada, though the picture below is from the 1832 bank run in Montreal, because Purdy Crawford has ridden to the rescue.
Several of the victims were students or faculty at the University of Alberta
CBC News ·
A newlywed couple, a family of four and a mother with her two daughters were among more than two dozen Edmontonians killed when a Ukrainian passenger plane crashed minutes after takeoff Wednesday from Tehran's main airport.
Payman Parseyan, a member of the Iranian-Canadian community in Edmonton, said he knew many passengers who were on board Ukraine International Airlines Flight PS752
All 176 people on board the Kiev-bound Boeing 737 were killed.
Reuters is reporting 30 of the dead were from Edmonton, almost half of the 63 Canadians identified by officials so far as having died in the crash. Many of the known victims from Edmonton have associations with the University of Alberta.
"We lost a significant portion of our community," Parseyan told CBC Radio's Edmonton AM. "Everybody in Edmonton that's of Iranian descent will know somebody that was on that flight."
'Shocking to the whole community'
Arash Pourzarabi and Pouneh Gorji, both in their mid-20s, were graduate students in the U of A's computer science program. They had travelled to Iran for their wedding, said Reza Akbari, president of the Iranian Heritage Society of Edmonton.
He said he heard the couple was accompanied by four friends who travelled with them to celebrate the wedding.
"It's devastating and shocking," Akbari said. "It's a tragic moment."
Akbari said a group chat on the app Telegram has become a lengthy memorial, with people from the Iranian community sharing stories about those who have been lost.
"When you go from top to the bottom, it's hard to believe — all these wonderful people ... these people who really were actually impactful in our community, they're not among us anymore. And in one incident all of them are gone."
Akbari said he knew eight or nine of the victims, and knew two of them well. He said he expects the grief will spread well beyond the Iranian community.
"I have no doubt that there's so many people in Edmonton, regardless of their cultural background, they know them because there's doctors, university professors, among these people. It's just tragic."
U of A engineering professors Pedram Mousavi and Mojgan Daneshmand, and their daughters, Daria and Dorina, were killed, said Masoud Ardakani, associate chair of the University of Alberta's electrical and computer engineering department.
Daria, born in 2005, attended Allendale School, and her sister, Dorina, born in 2010, attended Windsor Park School.
Dr. Shekoufeh Choupannejad, an obstetrician-gynecologist at the Northgate Centre Medical Clinic in Edmonton, and her two daughters, were also killed, Parseyan said.
Both daughters are U of A students. Saba Saadat was studying medicine; her sister, Sara, was a clinical psychology student.
Parseyan said many international students can't travel to the United States, so they travel through European connections.
University professors Pedram Mousavi and Mojgan Daneshmand, along with their daughters, from left, Daria and Dorina, are among the dead, a University of Alberta spokesperson confirmed Wednesday. (zaghtweet1/Twitter) (zaghtweet1/Twitter)
Information was shared among Iranians in Edmonton through a chat group, and once manifests were released, names were cross-referenced and confirmed, he said.
A community group of about 100 people has formed to make arrangements for families of the victims, Parseyan said.
"Edmonton's Iranian community isn't Canada's largest Iranian community, but we are working together to ensure all members of the community are supported during this difficult time."
Parseyan said members of the community learned about the crash while watching the news of Iran's missile attacks against two airbases in Iraq housing U.S. and coalition forces that took place a few hours before the crash.
"Many were expecting their friends and [family] members to come back ... [and] were well aware what flight they were on," said Parseyan, a former president of the Iranian Heritage Society of Edmonton.
He said one person who knew a passenger on the plane had called him and asked him for more information.
"He called and said, 'Hey, is there any chance there's a second flight to Kyiv, this is a mistake? This can't be real.' He's devastated."
Parseyan said the news is difficult for an Iranian community already concerned about ongoing aggression between Iran and the United States
'This is a terrible day'
In a statement issued Wednesday, Alberta Premier Jason Kenney said he is "deeply saddened" by the news of the plane crash and extended sympathies on behalf of the provincial government.
"Alberta has been enriched by a small but dynamic and highly educated Iranian community," Kenney said. "This is a terrible day for them, and I am sure that all Albertans join me in expressing our condolences to the entire community, which is affected by this disaster."
Edmonton Mayor Don Iveson issued a statement Wednesday.
"I was heartbroken to hear this morning of the devastating news," Iveson said. "While no words can erase the pain this crash has caused, I, on behalf of Edmontonians and your city council, would like to offer the families and friends who have lost a loved one in this tragedy our deepest condolences.
"Edmonton is in mourning today — our community has suffered a terrible loss."
David Turpin, president and vice-chancellor of the University of Alberta, also expressed his sorrow in a statement
"Words simply cannot express the loss I know we all are feeling," Turpin said. "On behalf of the University of Alberta, I wish to extend our deepest condolences to the families, friends, colleagues and loved ones of the victims of this tragedy.
"This is a devastating loss for the University of Alberta. Ours is a closely interconnected community, and we grieve with everyone touched by this terrible loss— friends, classmates, roommates, professors, students, mentors, and colleagues. The University of Alberta's flags will be lowered to half-mast in recognition of this tragedy."
Turpin said counselling and other services are available to students, staff, faculty, and others in the community.
The disaster was the largest recent loss of life among Canadians since an Air India flight blew up in 1985 over the Atlantic Ocean, killing 268 Canadians.
The plane crash marks the single largest loss of life of Edmontonians. A tornado that tore through parts of the city in 1987 killed 27 people.
The U.S. Supreme Court could soon boost the bipartisan effort to criminalize homelessness
Tatyana Tandanpolie
SALON Sat, January 27, 2024 Homeless tents; Kentucky; Brett Kavanaugh Photo illustration by Salon/Getty Images
As local governments across the United States began the massive task of counting the nation's unhoused people this week, legislators in states like Kentucky are gearing up to criminalize homelessness — with the Supreme Court recently agreeing to hear a landmark case out of California that will decide how far cities can go in punishing unsheltered people.
An army of volunteers beganconducting the annual Point-in-Time surveys this week to map the extent and gravity of the nation's homelessness crisis, collecting counts of how many people are currently experiencing homelessness to submit to the federal government. Federal resources are allocated to local communities each year based on the national count.
The survey comes two weeks after the Supreme Court agreed to consider whether fining or arresting people experiencing homelessness, and who don't have access to alternative shelter, violates the Eighth Amendment. The case will impact camping policies nationwide.
One such policy, expansive legislation that would permit property owners to use force — including potentially lethal force — against unhoused people found camping on private property, passed Kentucky's GOP-controlled House of Representatives Thursday. House Bill 5, also known as the "Safer Kentucky Act," includes provisions related to drug possession, bail and homelessness that would intensify criminal penalties for a range of offenses.
Advocates for unhoused Kentuckians have criticized the bill's anti-homelessness provisions, one of which provides that a property owner's use of force is "justifiable" if that individual thinks robbery, criminal trespass or "unlawful camping" is taking place on the property. That justification extends to "deadly physical force" in the event a defendant believes an unhoused person is attempting to "dispossess" them of the property, robbing them or committing arson. The legislation would also bar local municipalities from trying to preempt state laws and make illegal unsanctioned encampments that unhoused Kentuckians erect.
Representatives in the state's lower chamber passed the legislation Thursday evening in a 74-22 vote, according to the Louisville Courier-Journal, pushing the matter to the state's Senate.
Supporters of the bill say its full slate of measures would improve overall public safety. But it only "purports" to do so, counters Catherine McGeeney, the director of communications for Louisville organization Coalition for the Homeless.
"We're alarmed that the state legislature is saying that, 'We care about the safety of property owners. We care about the safety of people who have homes, but we are unconcerned with the safety of people who are unhoused or unsheltered,'" McGeeney told Salon before the vote took place Thursday.
As the country's homelessness and housing crises deepen, HB 5 represents a spate of policies that have cropped up across the US that work to criminalize unhoused Americans in increasingly extreme measures, often going against known evidence-based approaches to ending homelessness.
A "State Level Homelessness Criminalization" tracker, developed by the National Homelessness Law Center and the National Coalition for the Homeless, has tracked 29 bills that have been introduced in state legislatures across the US in the last three years. Most anti-homeless legislation, however, appears at the local level, which the tracker does not account for, Jesse Rabinowitz, the National Homelessness Law Center's campaign and communications director, explained.
A majority of these state-level policies aim to implement some form of statewide ban on building encampments in certain public spaces and seek to impose fines or criminal penalties for doing so. Others also authorize law enforcement to clear these camps or cut funding from evidence-based, supportive approaches like Housing First programs, which prioritize getting unhoused people into permanent housing without requiring them to first participate in other services.
Earlier this month, a bill was introduced in Indiana that would ban and criminalize camping statewide, classifying it as a Class C misdemeanor punishable by up to 60 days in jail and a $500 fine, among a slate of other measures.
Two bills in California's State Legislature that failed in committee last year have been granted reconsideration and amended this year. An assembly proposal seeks to authorize local prosecutors to impose a $10 fine on anyone who camps within 10 feet of a school, while a senate bill aims to prohibit a person from sitting, lying, sleeping or storing personal property on any public right-of-way within 1000 feet of a school, daycare center, park or library.
But the "Safer Kentucky Act" marks a new height in the extremity of the measures because of it's allowance for use of force, Rabinowitz told Salon.
"The Kentucky bill was certainly the most extreme example we've seen," he said. "But all of these efforts to criminalize and arrest people experiencing homelessness, to take away the housing that ends homelessness and to force people to live in state-sanctioned camps, are extreme."
The policies seeking to address homelessness aren't distinctly partisan, Dennis Culhane, a professor of social policy at the University of Pennsylvania specializing in homelessness, told Salon. Instead, they come from both liberal and conservative local and state governments succumbing to pressure from commercial business leaders and the tourism industries, which often take issue with the visibility of encampments erected by unhoused people, he said.
Ann Oliva, the CEO of the nonpartisan National Alliance to End Homelessness, agreed but noted that some of the "really damaging rhetoric comes from the very top" and the right wing, citing former President Donald Trump's comments on homelessness during his 2024 campaign.
Many of the state bills follow the model legislation outlined by the Cicero Institute, a self-described "non-partisan policy organization" that Vice reported runs Libertarian. The legislation offered by the institute, which has been lobbying for anti-homeless bills across the country, calls for banning camping and curtailing funding for Housing First programs, which the U.S. Department of Housing and Urban Development endorses.
The "Safer Kentucky Act" mirrors the Cicero Institute guidelines, as do 18 others included in the homelessness criminalization tracker.
But those suggested measures diverge from data, which instead shows that providing safe and affordable housing to people is the best solution to the nation's homelessness crisis, Oliva told Salon.
A 2020 analysis carried out by researchers for HUD and the Centers for Disease Control and Prevention found that, compared to treatment first programs, Housing First programs decreased homelessness rates by 88 percent and improved housing stability by 41 percent. The study also saw participants in the programs reporting an improvement in quality of life, community integration and positive life changes compared to clients in treatment first programs.
In Louisville, Kentucky, for example, Housing First programs have maintained a 97 to 98 percent success rate over the last decade in keeping people housed for more than two years, said McGeeney, who noted the programs are unable to serve all unhoused people in Louisville because of a lack of funding.
Punitive measures instead cause detriment to the person experiencing homelessness, social services and the system overall, ultimately extending "people's homelessness, rather than actually solving the problem for them," Oliva said.
Being ticketed, fined or arrested for "living in an unsheltered location" can "snowball" for a person experiencing homelessness because they lack the resources to pay the fine, she continued. Repeated fines over time stack up into a criminal offense that will then appear on the person's criminal record, and the record will make it more difficult to obtain a job or a lease for housing.
Other criminalizing measures, like encampment clearings, further build unhoused Americans' distrust in the system, while disconnecting them from resources and social services that they've already started processes with, Oliva continued. That displacement makes it more challenging for service providers to locate the unsheltered person, address their needs and continue to build trust, which detracts from the goal of providing housing.
"We don't have enough resources in the system to serve everybody, but this kind of approach actually makes the system less efficient. It makes the system have to work harder to get a person into a stable situation," Oliva added, noting that these disadvantages also further marginalize groups who are overrepresented in the homeless population like Indigenous and Black people, disabled people and LGBTQ people.
Just over 653,000 people in the US were experiencing homelessness in on any given night in 2023, according to HUD's 2023 Annual Homelessness Assessment report. Nearly 257,000 of those Americans were unsheltered, a number marked by a 10 percent increase in the volume of people experiencing unsheltered homelessness between 2022 and 2023. That value, according to Oliva, has increased every year since 2006.
Forty percent of the more than 1.1 million year-round, dedicated beds nationwide were available to people currently experiencing homelessness, the report also found. But an approximately "200,000 bed shortfall" compared to the number of people experiencing homelessness still remained, it said.
The underlying cause of homelessness in the country today is its lack of affordable and accessible housing, according to Culhane, who previously served as the director of research at the National Center on Homelessness Among Veterans.
As unsheltered homelessness has boomed, the number of cost-burdened renter households has hit a record high, amounting to 22.4 million in 2022, according to a new report on U.S. rental housing from Harvard's Joint Center for Housing Studies. Fifty percent of all renter households were also cost-burdened in 2022, a value up 3.2 percent from 2019 and 9 percent from 2001.
"When we had provided access to low-cost housing, for example, throughout much of the 20th century before the decline in Skid Row, there were [single room occupancies], there were hotels and single room rentals that were available to people," Culhane told Salon.
"We used to have a safety net — [Supplemental Security Income] and Medicaid — that, for better or worse, was preventing most cases of homelessness, and that's not true anymore," he added, noting that the SSI program has only increased according to the consumer price index every year, but the CPI doesn't factor in housing costs, which is much higher than the CPI.
According to HUD's Office of Policy Development and Research, the early 1980s saw two severe recessions, persistent inflation and an economic shift due to deindustrialization that devastated cities and led to the contemporary homelessness and housing crises. "This economic shift, along with the widespread deinstitutionalization of individuals experiencing mental illness, cuts to core programs at HUD and other agencies funding social services, and an inadequate supply of affordable housing facilitated a dramatic rise in homelessness," the office wrote in a Spring 2023 periodical.
These factors make clear the stakes in the Supreme Court's decision earlier this month to take on this session what Rabinowitz calls "the most significant case on homelessness since the 1980s": Grants Pass, OR v. Johnson, Gloria, et al.
According to Vox, the case is a challenge to a 2018 federal class action lawsuit in which three people charged the city of Grants Pass of illegally punishing them for being involuntarily homeless. Grants Pass argued unhoused people could just go elsewhere.
A three-judge panel of the Ninth Circuit in 2022 ruled in favor of the plaintiffs, maintaining that the city, consistent with the Eighth Amendment on cruel and unusual punishment, could not enforce anti-camping laws against unsheltered people when no other shelter was available to them.
If the high court, which Rabinowitz said will hear oral arguments in April, rules in favor of Grants Pass, raises the potential for a "domino effect" that would push more elected officials toward criminalization instead of pursuing housing and services programs, Oliva said.
"When one community like Grants Pass basically makes it illegal to be homeless in their community and they're allowed to do that, where do people go?" she asked. "The question that I keep asking everybody is, 'Where do you think people can go?"
If unsheltered people attempt to go to another neighboring town or city in search of shelter and that municipality also does not have enough shelter or allow them to camp, they're left with limited options, including camping on federal property, has had "disastrous effects," Oliva said. "It just moves people around it doesn't actually solve the issue."
"Nobody wants people to be outside," she added, arguing that the U.S. "should not be in a situation where people are forced to be outside. But we should also create responses that treat people like people."
