Crisis?

What crisis?

Canada’s most recent federal election was just two years ago. I remember thinking it was strange that all parties agreed on one issue. Everyone agreed that there was a housing crisis in Canada. Every party decided that the solution was to throw more government money at the problem. Sure, they disagreed about the details, but the movement of tax revenues was central to the solution.

I sat in front of a television, bewildered. Why do so many politicians think that the appropriate response to a problem is to take more of my money? It shouldn’t be. If the government took less of my money, I could easily make my own housing choices. If governments at all levels reduced my tax burden by just 10%, I would have more money. I could choose a different apartment or purchase a house or condo. Taxation policies restrict the choices of Canadians.

Perhaps I don’t want a different home. Then, the extra money in my bank account becomes available for other purchases. Factories have orders to build things I want. They employ people to make them. Soon, those other people have more money to make their own housing choices.

Try this thought experiment if you don’t think it would make that much difference. Imagine the federal government announced the one-month suspension of the GST in December. Would you spend the difference on Christmas presents or pocket the extra savings? I’m guessing we’d all spend some of it. The economy is stimulated, benefiting us all.

A 10% tax reduction would be about $2500 for me. I know some of my readers would save more. Over the last 40 years, saving that much would give me an extra $100,000 spending power. You might think I’m not considering inflation, but I am. Even at the lower wages of 40 years ago, whatever I earned would have had similar buying power. I agree that I made less money back then, but that’s precisely when I could have used more. Even if I’m off by half, I wish I could have made my own decisions with that $50,000. That’s with only a 10% reduction in taxation.

Those were my initial reactions, frustration and irritation. Recently, I’ve been thinking a little more about the issue. Now I’m wondering how we got here and how do we get out. We’ve all felt the cost of the housing shortage in multiple ways. From the parents who struggle to find an affordable home in a safe neighbourhood to raise their family, to senior citizens who find it hard to pay rent, to businesses who can’t sell a product or service because their customers no longer have the money to spend, the problem affects us all.

Then, I started putting a different piece into the puzzle. There is pressure put on people to settle for less to save money. I know people who will have to make hard choices when they retire. They might be unable to afford their current home when they no longer have the income they’ve been accustomed to. They’ll probably rent smaller, less expensive apartments. Landlords will have a captive customer base and increase rents. That pushes people out of the market entirely. Those people end up with nowhere to go.

Here are the numbers for that. There are over 4,400,000 renter households in Canada. 40% of Canadian renters use more than 30% of their income for rent, 18% use more than 50% and 8% are over 80%. Part of this is explained by the fact that median income has gone up much slower than median rents.

I admit I hadn’t made that connection between the housing crisis and homelessness until recently. My memory of the past was that homelessness wasn’t a problem when I was growing up in the 60s. A quick web search verified my memory. Homelessness was so low in the 50s and 60s that everyone thought it would disappear in the 70s. What went so wrong?

First, there was a desire to move people with psychiatric disorders out of institutions and into the community. Called deinstitutionalizing or mainstreaming, it gained support for several reasons. Some feared that patients were becoming too dependent on their therapists or treatments. Secondly, there was an increased use of drugs to treat psychopathy. Third, and perhaps more importantly, governments hoped it would save money.

There was a clear benefit for some of the former patients. Those who were capable of and willing to take their medications gained from their independence. Others often fell into some psychological disrepair. Without adequate oversight, many stopped taking their medication or attending behavioural modification therapy. As a result, many ended up on the street, in prison or worse.

Starting in 1973, over 20,000 units of social housing were built annually in Canada. Federal policy changes in the mid80s reduced spending on social housing and stopped entirely in 1993. In 1996, the federal government officially transferred responsibility to the provinces.

I don’t know if the federal government was transferring money for that, but I’m guessing the answer is no or not much. I’m also not blaming one party or leader. The period includes both Liberal and Conservative non-leadership.

What do we do about it? I don’t know, but I think the next time some politician says they have the answer, I’d ask what their previous policies had done for people. There won’t be much for them to point to.

What will I do? I need to recognize that this problem is so significant that there won’t be a single solution. There are problems with our tax system. There are problems with what our taxes are spent on. There are problems with our mental health care. There are problems with municipal regulations that restrict housing in such a way as to boost housing values through scarcity. There are problems with allowing people who don’t live in Canada to buy houses. There are problems with NIMBY (Not In My Back Yard) homeowners who object to new construction in their communities and will use zoning appeals to block housing solutions.

I admit I don’t know the solutions, but perhaps, we need our politicians to agree on the problems.

Moving on to an unrelated topic, I want to raise awareness about a friend who provides an important service. Her name is Adele Thompson, and she’s a pediatric sleep consultant. Check out her website. Some little person and their parents will be glad you did.

Also, one of her amazing kids is a talented artist. You can see his work on Facebook. Look for Callan’s Art. If you like what you see, you can order some notecards.

Books I’m currently reading are Wilful Blindness by Sam Cooper and Democracy in America? by Benjamin Page and Martin Gilens.

Speaking of books, specifically mine: If you’ve read it, please head over to Amazon and/or Goodreads and leave a review or rating. Even negative reviews are helpful.

As always, it’s a great day to be alive!