At the beginning of the pandemic, some public figures in Canada referred to COVID-19 as the “great equalizer,” anticipating the pandemic would have a “balancing” effect on society and claiming that the virus doesn’t discriminate and affects people from different classes alike. 1.5 years into the pandemic, we now know that it had the opposite effect. The divide between the rich and the poor has grown exponentially. While billionaires and many moderately wealthy people are either profiting greatly or adjusting to “working from home,” many middle and working-class Canadians are falling deeper into debt and many find themselves one paycheck away from homelessness.
In addition to a global pandemic, Canada is dealing with another epidemic: the affordable housing crisis. A recent report by Oxford Economics found that Vancouver, Toronto, and Hamilton have become the least affordable cities to live in in all of North America, and concludes that affordable housing will get increasingly harder to find in these metros. An Organization for Economic Co-operation and Development (OECD) report shows that over the last two decades, Canadian housing prices have increased by 168%, more than any of the other 36 OECD countries. This spike in prices has greatly affected renters, as across the country, 40% of renters spend more than 30% of their income on rent and utilities, and about 20% spend more than half of their income on housing.
During a pandemic where economic conditions are bleak, rental and property prices are rising, and eviction bans are lifted, homelessness has become a stark reality for many. Reports following 30,000 recently unhoused Ontarians found that these individuals are at higher risk for contracting the virus, 20 times more likely to be hospitalized, and 5 times more likely to die, demonstrating that inadequate housing is a public health issue. Human rights lawyer Michèle Biss argues that “homelessness is a policy choice that multiple governments made” and will only be exacerbated by the pandemic without policy and systemic change.
The Housing Crisis: Buying
There is debate among economists and policy-makers about what caused the nation’s housing crisis in the first place. Many point to the lack of supply, noting that Canada has the lowest number of housing units per 1,000 residents of any G7 country, a number that has been continuously dropping since 2016 despite high levels of immigration. As the supply goes down, demand for bigger properties has gone up, leading to a 23.1% increase in the home price index in just one year.
Steep prices and bidding wars concern policy analysts such as Mikayla Zolis, who says “the system’s competitive market dynamics and imperfect knowledge in the bidding process, reduce the process to a game.” Due to low supply, buyers bid way over the asking price to secure their offer. Additionally, the lack of transparency in this process creates opportunities for real estate agents to “exploit the situation for their own benefit while inflating the value of home prices.” Inflated home prices lead to a cycle where homes in surrounding areas also inflate and result in entire neighbourhoods selling for higher prices, a process commonly referred to as “gentrification.”
Gentrification usually extends into poor urban neighbourhoods under the promise of new real estate, restaurants, and stores, and ends in large-scale displacement of lower-income people and a complete change of the neighborhood’s character. Neighbourhoods that once housed immigrants, the working class, and people from various classes and life experiences suddenly become unfamiliar and inaccessible to the communities that have grown up there.
This lack of regulation in the real estate industry, paired with the Canadian economy’s dependence on housing (nearly 10% of Canada’s GDP and twice that of the U.S), is driving up prices faster than social support and wages can keep up with even after the blow to the economy dealt by the pandemic.
The Housing Crisis: Renting
Many of the policies that have been developed in response to the low supply of affordable housing have not only been insufficient but have also further commodified housing. ACORN Canada, a tenants rights organization, found that while the federal government builds 6,000 units per year, Capriet, a Real Estate Investment Trust (REIT) alone builds and/or renovates approximately 14,000. REITs such as Capriet typically own many properties and their main objective is to increase the turnover of tenants and consistently raise rents, in order to ensure a good return on investments for investors, further worsening the housing crisis.
Human rights lawyer Lailani Farha explains that REITs are known to buy affordable housing stock with low interest rates and complimentary tax breaks, which easily allows investors to continue purchasing properties. This business model is based upon displacing tenants and has led to a process commonly known as “renovictions,” whereby landlords use tactics such as cash buyouts, neglecting maintenance, or harassment in order to “flip” units at a fast rate under the guise of doing major renovations. It is in investors’ best interest to vacate units, specifically from tenants who pay below-market rent and have been in their units for longer periods of time.
In light of all this, finding affordable housing again is a challenge for many, as many renters live off of social supports such as disability, which, in Ontario, is roughly $1,341 a month. Meanwhile, the average cost of a 1 bedroom apartment in Ontario is $2,038. Renovictions, rising rents, and high costs of living are leaving renters in Canada vulnerable to homelessness or sacrificing basic needs or their quality of life for shelter.
Late Stage Capitalism & Millennials
The affordable housing crisis is a result of the accumulation of bad policies (or lack thereof), and the real-life outcomes of systems that unevenly distribute resources across classes and other variables such as gender, race, and ability. Western narratives such as the “American Dream” paint an image of a nostalgic society that supposedly enabled anyone, through hard work and perseverance, to create possibilities for themselves and their families. The benchmark of this dream is home ownership and thus, has resulted in a society that heavily values property.
This “dream” fuels the illusion of meritocracy, “a social system in which advancement in society is based on an individuals’ capabilities and merits, rather than on the basis of family or wealth.” While sounding like a positive system, meritocracy is the bread and butter of this ever-inflating economy. It is a useful ideology that justifies the existence of different classes as a natural occurrence, rather than as a result of systems that perpetuate inequality. The myth of meritocracy does not account for how wealth is inherited and maintained by structures that generate privilege and status for some.
Housing has become an avenue in which inequality is maintained and is affecting younger generations in new ways. In Ontario, about 30% of the population rents, and over half of Ontario households between ages 25 to 34 are renters. Traditionally, renting was “a step in the process, and rarely the endgame,” however, working-class and middle-class workers are being “priced out of home ownership” and staying in rental housing for longer. While there is speculation that this may be a result of many factors, like the mobility and community it creates, it is largely because buying property is simply unaffordable.
A Globe and Mail report found that the rental market is surpassing ownership; between 2011 and 2016, 396,000 of 753,000 new households were rentals, accounting for 32% of Canadian homes. Further, policy professor Paul Kershaw’s research demonstrates that back in 1976, it would have taken 5 years to save up for an average-priced home. By 2020, that rose to 14.3 years, and in Toronto specifically, it rose from 21 years to 24 years of saving for similar income levels. Millennials and younger generations are put in a bind between inflated home prices, a highly competitive labor market, high rates of debt from schooling, and the inability to save due to high costs of living.
Younger generations who rent are simultaneously dealing with a housing system that is designed to grow at a faster pace than local earnings and wages, and reportedly lower incomes in comparison to homeowners. Increasing fears about the disappearance of the middle class are echoed by the common phrase, “the rich get richer, and the poor get poorer” as society becomes increasingly stratified.
Homelessness in Canada
The most obvious and jarring manifestation of the housing crisis is the high rates of homelessness in Canada. Up to 235,000 Canadians experience homelessness in a year, and in Toronto specifically, 10,000 people. One driving factor behind these statistics is the prejudice built into the housing market. The causes of homelessness are structural: factors include barriers in meeting basic needs, behavioral and physical challenges, and discrimination on account of race, disability, and gender. Statistics from “Canada Without Poverty” indicate that nearly 15% of people with disabilities live in poverty, 59% of which are women, and up to 45% of homeless individuals live with a disability or a mental illness. Further, up to 34% of people living in shelters identify as Indigenous, and 1 in 5 racialized families live in poverty in Canada.
Moreover, news articles and images of violent encampment teardowns in Toronto parks such as Trinity Bellwoods have become widespread as not only homeless rates go up, but as the criminalization of homeless people in public spaces increases. Anti-homeless laws in Canada operate under the guise of improving “public safety” and further marginalize and stigmatize people who are experiencing homelessness by prohibiting them from occupying public spaces. In Kelowna, BC, homeless folks can face fines for sitting or sleeping on sidewalks between business hours, and in Ontario, panhandling or “squeegee cleaning” has been criminalized. The development of “hostile architecture,” the use of slanted benches or spikes on sidewalks that prevent individuals from being able to sleep, drives the message: you are not welcome here. Through legislation and city planning, cities are “cleaning up” their streets from “undesirables” by restricting their access to public spaces to which “they have no other choice but to live in.” Mass encampment evictions, the restriction of using public spaces, and encouraging folks to use over-capacity shelters do not address the long-term, systemic issues caused by the housing crisis.
High rates of individuals and families “sleeping rough” or experiencing food insecurity is a policy failure and a product of systemic inequality, and requires a systemic response. The “Housing First Model” suggests that a stable home may provide individuals with a chance to address other issues, and can reduce the strain on our systems. As well as the need for targeted policies and social housing, we as a society must be critical of the ways we justify poverty and homelessness and confront our own biases.