The housing crisis that Quebec is going through is the subject of informed comments, and often relevant proposals. The work carried out by the Angus Development Corporation in terms of affordable housing both in certain neighborhoods of Montreal and outside of Montreal allows us to get closer to the difficulties of people affected by the crisis. We will see, in this text, the social and generational scope of this crisis.
In a second text, we will discuss a series of measures to tackle the shortage of housing, especially rental housing. But first let’s look at the real, concrete impacts of housing scarcity.
First, let’s note that the housing crisis has a vocation for growth. We already live in a world of housing scarcity, and therefore high costs, especially in the so-called affordable niche. Affordable housing, for the purposes of the discussion, is that which allows a family or an individual to invest no more than 30% of their net income for housing. Affordable housing is socially very important because it constitutes a point of economic stability which allows us to envisage with optimism a future marked by economic and social progress, whether individual or family. However, a simple statistical evaluation: the quantity of households whose income does not allow access to affordable housing is on an upward slope.
According to the Montreal Metropolitan Community, 200,000 low-income households in the community have an affordability problem. The same source tells us that 30,000 households are waiting for social housing (HLM). The most recent count of homeless people leaves you speechless, with more than 10,000 for all of Quebec and 5,000 for the city of Montreal alone. According to Statistics Canada (Portrait of Canadians who have experienced homelessness, March 2022) 15% of people making the decision for family housing have experienced one or more episodes of hidden homelessness, i.e., most often, cohabitation forced and temporary.
Behind the recent count of homeless people in Quebec lies an equally unacceptable reality; that is to say thousands of people and families who are struggling with unsanitary housing or, worse, simple mattresses left anywhere.
That’s a lot of people in a precarious state.
Even more, the Canada Mortgage and Housing Corporation highlights (Rental Market Report, January 2023) a gap of 28%, in Montreal, between the rents (for two bedrooms) paid for accommodation where a tenant is goes and those where there is continuity of occupation. In other words, when a tenant leaves a home, without the conditions of the home changing, its value increases by 28%. Such an escalation is unsustainable for our communities and leads to a race towards inequalities.
Scarcity and dearness produce inequity, despair, misery, social stagnation.
This is therefore not trivial: the social elevator is currently blocked.
The Quebec social contract which offers good living conditions, supported and supported by an institutional regime (governments, banking network, taxation, etc.) no longer produces effects for more and more people; there is a civic disaffection that sets in, fueled by a persistent disillusionment.
This is an aspect of this crisis that is largely underestimated. For more than a hundred years, from generation to generation, the economic situation of households has continued to improve. Access to property played a major role in this growth of family assets. The economist Thomas Piketty has clearly demonstrated the importance of this mechanism and also its impacts on social inequalities. We will have to talk about this too one day.
Without access to affordable or social housing, the mortgage will pass from the banking world to society. The interest to be paid will be generational and imposing.
If the formula of the suburban house is not ecologically sustainable, in the city or around it, the fact remains that any mode of housing which includes stability and affordability is the basis of improving the living conditions of families and individuals. Final point.
Furthermore, we must stop putting individual property at the pinnacle of social success. The important thing is that the roof that protects you does not ruin you and, even better; will allow you to accumulate capital throughout your life in preparation for retirement. These savings will also, in many cases, increase the wealth of the future generation.
Consequences
The first very visible impact of the scarcity of social and affordable housing can be seen in our streets, our parks, our woodlands. The number of people deprived of their homes is increasing: costs are too high, renovations, housing diverted to the tourist market. There will inevitably follow a procession of economic and social misery, as well as health problems of all kinds. In short, the current housing market is producing a new generation of homeless people.
The housing shortage, since it affects potential tenants (young people and newcomers), generates a formidable dynamic of systemic discrimination. There is a seed of inequity here, the social cost of which may surprise us.
Discrimination at entry constitutes an issue which is exacerbated in a situation of housing shortage. Owners have a choice and it is often the most vulnerable who pay the price.
We must also take stock of the housing crisis by increasing the use of food banks, which are inevitably struggling to keep up. When hunger nests on poverty, the crisis could take on unexpected colors.
It is a scandal which, as the mayor of Quebec, Bruno Marchand, repeats, must fuel righteous anger. This will therefore be the driving force behind our reaction.
A generational failure
If a housing crisis of this magnitude heralds the bankruptcy of the dreams of newcomers and the youngest of the middle class, as well as the poorest, it is also, unless there is a spectacular turnaround, a generational failure.
The crisis still has one virtue: it destroys the blissful belief in the theory of the invisible hand of the market which always balances things. This is not true.
Housing has been financialized. For investment funds or large landowners, often foreign, the major determinant is now the return on investment, when it is not the quarterly return. This dynamic is merciless, unbearable and, on its face, unsustainable. However, we persist in maintaining this joyful collection of individual interests. A recent study by Statistics Canada, February 2023, indicates that 11.7% of housing in Montreal already belongs to investment funds or management companies. In Nova Scotia, this rate reaches 30%. This shows the potential for financialization that Montreal housing represents.
The fact that companies can own thousands of doors, as they say in the industry, sets the stage for renovation practices, insensitivity to the social fabric, and the race for performance.
Thousands of homes have been taken off the market to accommodate tourists at high prices. De facto, the return that can be expected from housing is aligned with this perverse logic.
It must also be said that the crisis benefited from a certain indolence on the part of public administrations, incapable of seeing what all the studies predicted was coming. Consultation between the various governments still remains an objective, not an achievement. That said, the appointment by the Quebec government of a minister with sole responsibility for housing, a first since the appointment of Guy Tardif in 1976 by René Lévesque, is an excellent signal. What’s more, the fact that it’s France-Élaine Duranceau, who has real expertise in real estate development and who is driven by results, is an excellent choice.
It’s terrible, but for several years it has been impossible to produce affordable rental housing without government assistance offering the return expected by the market which operates by mimicry. The private sector is therefore withdrawing from affordable housing.
Demand is strong, but supply is non-existent for households where combined incomes are less than $100,000. Which, by system effect, increases prices, including for low-end housing.
We will see, in another text, that the time for proposals strictly based on subsidies to developers and builders or even tenants is over.
We must quickly bring together all available energies to rectify the situation. I am aware that elected officials, all affiliations combined, are now perfectly aware of the emergency.
Now we need anger and ambition.