Canadian housing inequality has decades-old roots – study

Canadian policies dating back to the 1990s have led to “deeply entrenched” housing inequality, according to a Simon Fraser University researcher.

Yushu Zhu, assistant professor of urban studies and public policy at SFU, said that an analysis of census data from 1981 to 2016 points to significant disparities and shifts in access to affordable housing, particularly in terms of gender and immigration status.

“Driven by the neoliberal belief in the superiority of the free market, the housing policy in Canada has shifted from a welfare-oriented policy to a market-oriented one over the past four decades, encouraging homeownership, deregulation and private consumption,” Zhu said.

While the focus on addressing the imbalance between supply and demand is justified, Zhu said that many of the market’s fundamental problems stem from the restructuring of the housing system over the last 40 years or so.

“Until the mid-1980s, Canada had a welfare housing regime with strong state intervention in social housing supply – first in the form of public housing financed and managed by the government, then in community housing developed by a mix of community groups with government funding and finance,” Zhu said.

The federal governments’ policies from the 1990s onward represented a significant reorientation from social housing to private-sector supply creation, Zhu said. This was most apparent in the share of federal spending on housing programs, which Zhu estimated to have declined from nearly 1.5% in 1981 to just over 0.6% of the total federal expenditure in 2016.

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“Since then, the social housing sector has become more ‘core-needs’ targeted, supporting people with special needs and leaving those in need of independent social housing to the private market,” Zhu said.

The transformation of the Canada Mortgage and Housing Corporation’s mandate from home builder to mortgage insurer, which was facilitated by Bill C-66, led to easier access to credit and lower interest rates, Zhu said. In turn, this led to the funnelling of household savings into the increasingly expensive housing market, “boosting housing demand and attracting financial capital into the profitable housing market,” Zhu said.

“State institutions have been utilized and transformed to facilitate, rather than limit, the commodification and financialization of housing,” Zhu said. “It is vital for public policies to recognize the state as part of the housing problem and shift the policy narratives around housing unaffordability from simply a market disequilibrium problem, to a failure of state institutions.”