SOLVED

Last September the CMHC came out with a study suggesting that for Canada to reach housing affordability last seen 20 years ago “an additional four million housing units” would have to be built by 2030. That’s four million new homes, they said, on top of the business-as-usual home building scenario. Though the numbers vary considerably from year to year, the reports I can find suggest Canada has been in the business of building roughly 200,000 homes each year in recent decades: so our base would be roughly 1.2 million homes over the proposed six year timeline. That, of course, means our total 2024-2030 build requirement would be something on the order of 5.2 million new homes just to return housing to something vaguely rational. Right.

Then last week the Liberals dropped their big plan to “solve the housing crisis” by constructing “4 million homes by 2031.” My first thought was “Why deliberately aim so far shy of the goal?” Does 1.4 million homes (2031 is an additional 200,000 status quo homes) fewer than what they know we need to land us in the future we want? 

My second thought was, “Wait, 4,000,000 alone is an impossibly huge number!” I could imagine that if we are currently constructing 200,000 homes annually across the country we could bump that up a little. Sure. The status quo would get us nearly 1.4 million homes by 2031; and then heroically doubling construction, or better, would land us close to the three million range — still far more than two million homes shy of what’s needed to achieve affordability according to the CMHC. But just to fail that badly we would still need epic numbers of people, equipment, and materials to do so, which I know nothing about but last time I checked were all at crisis levels.

But then I actually tried to run the math on the proposed four million new homes (using my sixth grade numeracy skills):

• If we started yesterday, we would have just six years and eight months (or 76 months) left on our deadline

• To make it simple, we could just divide 4,000,000 between 10 provinces

• 400,000 homes per province divided by 76 months is something like 5,263 home completions per province per month (every month, winter included) or more than 63,000 annually

• 63,000 annual completions would require around 175 homes per day per province (assuming construction crews worked 12hr days, every single day, including weekends and that production rate could be met by contractors and lumber yards and the numerous weak links in our labour and supply chains...)

So, is any of that plausible? I mean, I was just reading that in 2023 we saw a record number of new builds in the province of BC. According to Rennie Real Estate, we saw a provincial total of 48,000 housing starts which, they say, is 11% above the previous record high. So if we in this province alone don’t catapult our builds up another, what, 32% tomorrow (!) and keep it there for seven years (!) we won’t achieve our goal (of catastrophically failing to reach affordability)? And those are just housing starts, not completions. So how do they intend to reach their goal?

THE PLAN

Well, I still hadn’t read the plan, so that was on order. The first thing I noted when I did was that the plan is titled, of all things, Solving the Housing Crisis: Canada’s Housing Plan. I’m no PR consultant or lexicographer but why go with “solving” and not “addressing”? To my mind, to solve is to successfully resolve a problem; while to address a problem is to attempt to understand, describe, and begin ameliorating it. Maybe you see these words as analogous (and me as an annoying pedant), however, as far as I'm concerned, they’re saying the former is where we’re at: on a clear path to inevitable resolution. But, even pretending four million homes is sufficient, why would they assert BOTH that they have the answer (or at least the method by which the solution will surely be attained) AND that this hugely ambitious plan (requiring sustained coordination and labour of three levels of government, thousands of businesses, and about a million people in every corner of the country) is going to come together right quick (nice and neat and putting to an end, once and for all, this multifaceted, civilizational problem yielded through a conspiracy of generations of exploitation and neglect)? Why set yourself up for failure like that? Regardless, that seems like a plan worth checking out, damn it!

*READING, READING*

After one pass, it looks to me like their solution is less obviously about building homes or achieving any measure of affordability — not least of all because they aim is to come up about a million and a half units short of what’s needed — but is more about getting cheap public money into the hands of investors, developers, and homeowners (you know, the people REALLY struggling with housing). 

Why do I say that? Most of the plan involves:

• Leasing public land and converting it into private homes
  

• Removing taxes on new student housing builds
  

• Providing low-cost loans, increased flexibility (aka: reduced requirements for accessibility, affordability, and energy efficiency), and reduced permitting timelines for builders and developers; and
  

• Giving low-interest loans to homeowners to construct rental units and secondary suites (which effectively no one is able, wants, and/or can afford to do for a whole bunch of reasons not addressed here), along with a billion dollars for energy efficiency retrofits. [Insert gif here: Oprah: “YOU get a heat pump! And YOU get a heat pump!”]

All of that is great for the folks who’ve already benefited so much from the status quo but where, one may wonder, is the help and generous handouts for folks, you know, ACTUALLY impacted by any of the diverse species of precariousness and unaffordability inherent in our housing? Yes, there are SOME offerings proposing to help renters and would-be homeowners. But just look at them. I wrote about the proposed “Renters’ Bill of Rights” just recently. It’s noted in this proposal and still strikes me as laughable, offering to do little more than boost credit scores and make home ownership easier for those already wealthy. The plan, to my reading, also talks about how those in government seem to feel that median household income in Canada is probably around $200k and that a 30-year mortgage amortization is sensible (to my calculation, the difference of interest between a 25- and 30-year amortization is 24%!) — but also how those will only be made available for the rich buying new builds. They pair this reasoning with more of the like, such as permitting people (so kind) to put money they don’t have (clever) into tax-free savings accounts that cap out far below the level of the average down payment (genius). You couldn’t make this stuff up. It’s an amazing historical document, really.

Much of that was quite a funny read. I also laughed when I read about a vague proposal for “cracking down on real estate fraud.” They talk about “reinforcing the fairness of the tax system.” Curiously they don’t mention any of the factors I’ve written about many times before, such as rampant, institutionalized misrepresentation of commercial and residential real estate, the transparent money laundering at the heart of real estate, or the outlandish and well-documented legal loopholes in the tax system for anyone with a Canadian-controlled private company. Instead, they talk about “combatting tax non-compliance.” Right. This from the folks who watched as homeowners in every city, town, and village gladly advertized in a dozen places online, indelibly and for the whole world to see, their illegal short- and long-term rental units — many thousands of them in all of our major cities. I think I read a devastating report on the problem back in 2017, almost a decade after short-terms were exposed as chronic malignancies, that talked about 6,000 such units in the city of Vancouver found listed just on AirBnB alone. Trudeau and friends today: Still another decade later, we may finally begin to do something meaningful toward resolving this problem, by 2031, maybe, unless we can find a way to make the situation even worse. Bold proposition. Bold.

They add similarly vague proposals such as “confronting the financialization of housing”, which sounds good. I would normally endorse any such offering with all the force I can muster, but on this point they note:

When purchasing a home, Canadians expect to be bidding against other potential buyers, not a multi-billion-dollar hedge fund. The role of private equity in our housing market needs to be addressed. Budget 2024 will propose that we intend to restrict the purchase and acquisition of existing single-family homes by very large, corporate investors.

Yes, multinational investment conglomerates are a problem but so are stock brokers and corporate lawyers, endocrinologists and cardiologists, and, really, anyone who got into the real estate market prior to 2004 and who holds five (or five dozen) units. To me this is like solely focusing on billionaires who engage in tax shenanigans, on the grounds that they hold "so much wealth," when the cohort of millionaires doing the same is vastly larger and, as such, are secreting away a total sum orders of magnitude larger than all the billionaires combined. I mean, why not set home limits as we have speed limits? Theorizing that you intend (perhaps, maybe) to find a way to limit the largest of corporate investors sounds to me like a cop arguing that speeding isn’t really an issue, but does become a problem once vehicles over nine tons hit 200km above posted limits. "We must find a way to prevent Greyhound busses and dump trucks from exceeding the speed limit by 400% or more, at least on weekends between 11am and 3pm (excluding holidays)!" I’m not so sure that’s where I would put my resources if I was trying to solve this problem.

I’ve sat in cafes and bars many times and overheard seniors (in Vancouver and Victoria) and young doctors or lawyers or oil execs (in Toronto and Hamilton and Calgary) and other locals with real money (all over the place) talking about their huge real estate portfolios they maintain and continue to grow as an alternative to investing in precarious global markets (or hoarding Lego). These aren’t mere anecdotes. There are publicly acknowledged accounts of small groups of locals getting together to buy almost 20,000 homes so they can run what is effectively a massive, distributed hotel operation off of AirBnB. And doing so legally. That's not a multi-billion-dollar hedge fund and it's domestic and yet the operation is industrial scale and removing from the rental and buying markets housing for, say, the entire student population of a major university. More commonly individual owners run merely dozens of illegal units. (Doing so will nets you a $20k fine which, for scale, is just a fraction of what he was bringing in on rent in a single month and just the cost of drinking someone else's milk.) As such, I would submit that without what seems to be a rather large cohort — many of whom are undoubtedly in government and most of whom exploit the many tax loopholes they and their friends helped put in place to enable all of this — we wouldn’t have a housing problem in this country. But what do I know?

More than that, some have asked right out of the gate how you explode the level of building everywhere and simultaneously, you know, in the real world? (You remember the real world, right?) That’s a legit question and concern on several fronts. It's especially pertinent given that there's no mention of using robots to 3D print Japanese-style pod hotels to force Millenials and Gen Z to live in. That would at least be a tangible strategy. But The Plan does offer a suite of “solutions.” One such offering is to spend $100 million on “skilled trades awareness and readiness” and apprenticeship services. The budget also plans another $50 million to streamline foreign credential recognition, to bring in many more folks (more unforeseen homes needed) in the skilled trades.

Now, just thinking out loud here, I’d love to know how convincing 16-year-olds to eventually learn a trade helps us get four million homes in six years? (An electrician apprenticeship in BC, for example, is 48 months.) Wasn’t the time for this ramp-up a decade ago, or two? It remains unclear how this is intended to work. And looking at both of the above trades strategies together, what will massive volumes of new skilled labourers, domestic and international, do to wages? Will they stay the same? Will they go up? Gee, it’s hard to know what will happen. And, then, do those folks deserve homes? Will all this get normal, blue collar workers into the homes they themselves helped build (especially when many unionized apprentice electricians and carpenters currently earn about as much as baristas or retail cashiers)? And, someone might ask, when all of this unprecedented construction is done, and in just a couple of years, what happens to this huge flush of labourers? Massive layoffs? How do layoffs pair with mortgages? And then what, retraining? Learn to code? (Oh, right, coding has been made obsolete already, along with most other white collar work...) Or is the plan to sustain epic build rates for the rest of time? Convert all farms and forests into townhouses? Well, none of this and so much more is ever mentioned, never mind “addressed”; but, you'll be glad to know, all of it will, apparently, be “solved” and real quick.