Tag: homeless

Housing and Homelessness

February 4, 2024

My local city Councilor jolted me with the following statement in his late January 2024 newsletter: “The issue that I want to focus on for this newsletter is Housing & Homelessness. If ever there was a time in recent memory when this issue was front and centre in the minds of pretty much everyone, this is it. Whether you’re homeless yourself, whether you can’t afford to buy a home, refinance your home, or rent an apartment, or whether you’re worried about challenges that will be faced by the next generation, our current crisis is affecting a majority of Ottawa residents”. Sixty-four percent of Ottawa households own a home! So, how could these issues affect the majority of residents? This statement did not resonate with me on several levels!

On one level, it is not front and center in my mind or my friends’ or neighbors’ minds. It is in the newspapers, on TV channels, and on the radio, but people I know do not discuss and are not interested in those subjects. It is infrequent if they talk about it, and when they do, they mention parts of downtown where people experiencing homelessness congregate. But people I know avoid downtown for lack of parking or the cost, especially since we find all our needs met in the suburbs. In our neighborhood, I have yet to see homeless people. I go out daily, know my neighborhood well, and have not seen homeless people to date. I believe it is a non-issue in my community.

When I talk with my friends, subjects of our discussions relate to the amazingly mild climate this year, the current popularity of hybrid cars, how they function, and whether we should get one, a hip replacement facing a neighbor, a trip by a friend visiting the Abu Simbel Temple in Egypt, and when Trudeau may resign. When nine men met to form a book club, we discussed the need for a men’s book club, the schools we attended, and how we should run our new-fangled book club; for example, should we have lunch before discussing books? Homelessness was never mentioned.

On another level, if my local city Councilor were serious about doing something about homelessness, he should have had some statistics on how many homeless are in our community. All I hear today is “evidence-based” policymaking. So, how about some numbers to substantiate the homelessness issue in general terms and as it exists in our community?

The other subject the Councilor mentions is housing and its affordability. These are current political challenges to satisfying the massive demand for housing created by the influx of newcomers to Canada. The various levels of government blame each other for the housing shortage. One reads that local governments take too long to approve applications for development proposals and charge hefty development fees. Both are disincentives for speedy housing construction. Recent federal government policy let too many students, refugees, and immigrants into Canada, which combined to create a high demand for housing that the construction industry has been unable to cope with. Beyond general curiosity, my friends and I ignore this subject; we all have a house, mortgage-free.

Unless the Councilor can identify homelessness as an issue in our community, I would suggest he focus on our local problems, such as poor road conditions, through traffic, and traffic congestion on surrounding major roads. Many streets are in an abysmal state with potholes. People traversing our community to avoid traffic tie-ups at major intersections endanger our walkers on the streets. The construction of sidewalks and additional streetlights would enhance safety. I believe road maintenance, safety, and traffic control are the real issues in our community. The Councilor could survey residents on what they perceive to be the problems in setting his priorities.

Are We Panicking About Housing?

November 27, 2023

Current headline news bombards us with titles like: “housing shortage”, “unaffordable housing”, and “people die on the streets for lack of housing”. These housing-related issues have materialized since 2015; we did not have these topics at that time.

However, all of these headlines spawn questions. For example, what is affordable housing? One metric the Central Mortgage and Housing Corporation (CMHC, the Canadian mortgage insurance company) uses is that no more than forty percent of after-tax family income should be used for housing. But does this metric apply today?

The median family income in Ottawa is just over $100,000 today, and the average house price is slightly over $600,000. The minimum downpayment is five percent for the first half million dollars, ten percent for the next half million, which translates into $35,000 for the average house in Ottawa. So, with this downpayment one needs a mortgage of $565,000 that would cost today circa $4.000 per month. The annual cost, $48,000, would therefore be over forty percent of the annual income of the average Ottawa family income. Which means housing is, in fact, unaffordable, unless one has a larger downpayment to reduce the monthly mortgage payment.

One way to look at housing issues is to identify factors creating demand for, and supply of, housing. Either decreasing demand, increasing the supply of housing, or doing both, would alleviate the current housing problem.

The major factors on the demand side are immigration and the entry of foreign students. Canada let in 430,000 immigrants and 550,000 foreign students in 2022. All of the housing demand can be attributed to these two classes of newcomers to Canada: there are 424 housing units per 1000 people in Canada, so the close to one million newcomers alone needed 400,000 units in 2022 when Canada builds only 250,000 units per annum (Census and CMHC statistics).

While the last two classes of newcomers are beneficial to Canada, they create a huge stress on the housing markets. They are beneficial in that Canadian fertility rates are below replacement rate, hence the rationale for increased immigration. Similarly, Canada is short of skilled construction workers, and therefore welcomes immigrants with such skills. And foreign students pay two or three times the university fees Canadian students pay and therefore contribute to the universities’ bottom line. But we must balance our priorities and perhaps providing housing is more important today than other objectives.

Most of the supply issues can be attributed to the shortage of skilled workers and the lack of land for development. Land is especially a major issue in some of our large cities. Vancouver is surrounded by water and mountains. Toronto’s expansion is limited on one side by water.

Densification has become the key word today to accommodate the increasing population. Densification requires rezoning by municipalities, that takes years. And vacant land development, where available, also takes years for approval.

Are there any solutions? On the demand side, the federal government could reduce the flow of immigration and the intake of foreign students to alleviate demand and pressure on housing. And municipalities could accelerate the approval process to increase the supply of housing.

The two levels of government, working in tandem, could alleviate the housing problem. However, both initiatives would also create negative consequences; Canada needs skilled people and universities favor foreign students. And an acceleration of municipal approvals may weaken environmental reviews and public engagement – both important review elements in the development process and expected by Canadians.  

The bottom line is that increased coordination between the different levels of government would go a long way to streamline the process of welcoming immigrants and foreign students entering Canada by making sure that housing is available.

The danger I see is that a panicky response today encouraging a hugely accelerated house construction program could result in an oversupply of housing in the next few years during which the federal government may change its priorities and reduce targets for immigration and the entry of foreign students.