The problem with number 55
A few short steps from the intersection of King Street West and Dundurn Street North in Hamilton, Ontario, sits a physical reminder of Canada’s housing crisis in the form of an unremarkable home. This home, at 55 Head Street, is tall and thin, with a softly sloping gabled roof, a partially enclosed front porch, and a single, narrow chimney which cuts across the centre of its western wall. The house is covered in a rough stucco-like material which has peeled in enough places to allow for flashes of weathered vinyl siding to peek through. From available records, we know it was built sometime in the late 1800s. In a City of Hamilton fire insurance map from 1898, it is shown as a simple structure, shaded yellow, symbolizing a worker’s home made from a basic wooden frame.
The house has been abandoned since 2009 when it was purchased from owners who had held the property for over three decades. It was bought by a numbered company, eventually finding its way into the portfolio of Shoppers Realty Inc., a subsidiary of Shoppers Drug Mart. That company is itself now a subsidiary of corporate leviathan Loblaws, which controls over 27 percent of the Canadian grocery market.
But how does 55 Head Street symbolize Canada’s housing crisis? To understand that, we must first examine the crisis itself.
Cracks in the foundation
House prices in Canada have increased dramatically over the past decade, pushing rents higher and making Canadian cities unaffordable for many. A 2021 report by Oxford Economics observed that housing in Vancouver, Toronto, and Hamilton was less affordable than in Los Angeles, Seattle, or New York City. Canada’s Parliamentary Budget Officer released a report in 2022 noting that house prices have “de-linked” from household borrowing capacity. This has created an “affordability gap” where average home prices are far higher than that for which an average household could reasonably secure a mortgage.
The skyrocketing cost of housing has led to despair among Millennials and Gen-Zers, with a 2021 Royal Bank-commissioned survey finding 62 percent of respondents believed most
Canadians will be priced out of the housing market entirely by 2030. Over a third of respondents said they had “given up” on ever owning a home. The generational gap is striking. In 2018, researchers at the University of British Columbia observed that, in 1976–when many Baby Boomers were coming of age and entering the housing market–the average home price-to-average earnings ratio was four to one, meaning the price of a home was four times the average earnings of a young Canadian. By 2017, that ratio had jumped to ten to one across Canada. These changes in the price of housing have impacted rentals. In Hamilton, CMHC data indicates that, between 2001 and 2011, the average rent for a one-bedroom apartment increased by 15 percent. Between 2011 and 2021, that increase was 65 percent. The Canadian Centre for Policy Alternatives released a report prior to the COVID-19 pandemic indicating that an individual would need an hourly wage of $35.43 to afford an average two-bedroom apartment in Vancouver and $33.70 an hour to afford the same in Toronto. The same report noted that, in 23 of 36 metro areas in Canada, no neighbourhoods had a one-bedroom apartment that would be affordable for a minimum-wage worker, with only Montreal standing as an exception.
This is a Canada-wide problem that will only get worse with time. As wages stagnate, inflation skyrockets, and housing prices continue to increase, more and more Canadians will find themselves completely unable to enter the market, forced to rent at increasingly unaffordable rates.
How we got here
Understanding the causes of the housing crisis in Canada is complicated. Competing theories as to why the situation has devolved such abound in the media and the academy. One explanation is that housing supply cannot meet growing housing demand. A developer in Hamilton argued that allowing for more low-density greenfield development was one of the best ways to tackle the city’s housing crisis. Globe and Mail columnist John Ibbitson similarly argued in favour of urban spawl to add to Canada’s housing supply. While early estimates from 2022 indicate Ontario needs to build over 650,000 new units of housing to meet growing demand, academics are pushing back against the “Econ 101” perspective that equates higher prices with less supply. Instead, they encourage a more subtle analysis of where people are moving, why they move there, and what kind of homes they seek.
Another theory places the blame on low-density zoning and the mythical “single family home.” Former Ontario Progressive Conservative Party leader Tim Hudak (now the CEO of Ontario’s Real Estate Association) argued in favour of density to bring “that dream of ownership back into reach for families.” Steve LaFleur of the right-leaning Fraser Institute echoed this, claiming that increasing urban density will make it so that “the market will provide the housing Toronto needs...” Yet, academic studies of such policies have found no clear link between zoning changes and increased housing affordability and that, in some cases, such changes make housing more unaffordable.
One of the most targeted critiques is pointed at investors, speculators, and “flippers” who seek to extract value from homes, often at the expense of existing residents. Reports in 2021 indicated that over 25 percent of home buyers in Ontario owned more than one property and have comprised a plurality of those purchasing homes since 2019. A controversial 2021 article in Toronto Life, written by a 28-year-old multi-millionaire who owns six properties in Ontario, brought this issue into stark relief.
Larger landlords have come under fire for acquiring affordable buildings and increasing rents dramatically. These trends can be attributed to “financialized landlords,” and Real Estate Investment Trusts (REITs) who, scholar Martine August notes, remake “homes” into “assets” and now control “nearly one-fifth of Canada’s private multi-family rental stock.”
Beyond these Canada-based investors, much of the country’s attention has been targeted toward foreign-based property investors. During the 2021 federal election, candidates from every party fixated on foreign ownership and promised to tackle the issue with vigour, often speaking highly of British Columbia’s vacant properties and speculators tax. Yet, regardless of the increase in tax revenue, British Columbia’s housing crisis has not been fixed; indeed, 2021 set records for property sales in Vancouver. Commentators have challenged the “foreign-buyer driven housing crisis” narrative, with Dan Darrah writing in the left-leaning magazine Jacobin about the uncomfortable racial component in the discussion surrounding foreign buyers, making the point that “Canadian political parties often trot out the shadowy foreign investor to absorb widespread anger at Canada’s housing market.”
This was not the only aspect of the housing crisis to feature in the 2021 federal election campaign. During the English-language leaders’ debate, Rosemary Barton of the CBC challenged NDP leader Jagmeet Singh on his party’s housing policies, noting that many Canadians have invested their life savings in their homes, requiring home values to remain high to ensure their financial wellbeing in retirement. This is evidenced by a 2017 report from the Ontario Securities Commission indicating that approximately 45 percent of Ontarians rely on the increasing value of
their home to fund their retirement. Complications arise when people attempt to “monetize” their most important asset, though, and, as a financial planner told the Globe and Mail in 2021, “You can’t buy food with your eavestrough.”
Each of these issues alone may not explain the current housing crisis in Canada. But, together, they paint a picture of a housing market in chaos. This chaos has been caused, in large part, by an overreliance on the market itself. We rely on the market to build homes, having abandoned substantive public investment in social housing in 1994. We pursue delicate policies to nudge the market, encourage Canadians to buy property to ensure their very survival in old age, lament large corporations and landlords controlling a disproportionate amount of the residential market without stopping their growing influence, and fixate on short-term interventions without acknowledging that the current system prioritizes profit over community.
And so it would seem that, to effectively address Canada’s housing crisis, we need to look beyond the market and pursue democratic, community-centred policies.
The Homefront Strategy
Solving Canada’s housing crisis means reimaging what housing means to Canadians. Data from the 2016 census indicates that Canada is still very much a country of homeowners. The survey of Millennials and Gen Zers mentioned earlier also found that 30 percent of those surveyed still wanted to buy a home and would consider doing so within two years.
But what if we reconceptualized home ownership? What if homes were seen as community assets rather than commodities to be acquired for personal financial safety? What if we could democratize the concept of home?
To do this, we need to employ our collective skills and resources, utilize the power of the state, and embark on ambitious and creative projects—constituting a bold new strategy to remake housing: a Homefront Strategy.
This strategy has a few key solutions that can work to solve Canada’s housing crisis:
1) The creation of Community Development Boards to acquire land and property that can be adapted to non-market or affordable uses
2) A sweeping expansion of the Canadian cooperative housing network
3) Federal interventions that both support non-market, cooperative, and affordable housing and provide Canadians with more opportunities to save for and be secure in their retirement
Community Development Boards and the expansion of local democracy Canada’s provinces, using their powers under Section 92 of the Constitution Act, should create municipal Community Development Boards (CDBs). These boards would be established at the local level and would be composed of elected board members. CDBs would identify potential sites for new affordable or non-market housing, work with existing owners and municipal governments to purchase these sites, and then build, redevelop, and/or retrofit them. These sites could be vacant properties, brownfields/greyfields, and municipal surplus, as well as properties that come up for sale which feature redevelopment or renovation potential. A CDB’s primary method of acquisition would be purchasing land from existing owners, though expropriation would be an option in some cases.
A CDB would carry the weight of the state and act as a voice of the community, bringing a forceful presence to the real estate table. Rather than provide housing like a municipal housing corporation would, a CDB would identify lands and properties that could be developed in the best interests of the community and then returned to local residents. This could be through adding to the existing stock of social housing, working with existing non-profits to build out their housing stock, building small and affordable housing akin to Canada’s war-time homes, or, importantly, transferring ownership to housing cooperatives.
Democracy at home
Reorienting our housing efforts toward a Canada-wide expansion of housing cooperatives is a crucial step in easing the strain on the housing market. By offering Canadians an opportunity to become part of a democratic housing community, we can expand the options available for people and provide a real alternative that prioritizes community and democracy. Housing cooperatives will give people a chance to live in a way that builds communities and focuses on careful investments in community assets over the accumulation of wealth through private property. Cooperative housing is in extremely high demand, with long waitlists and notably lower per-month costs when compared with traditional rentals. An example of the desire for more cooperative housing can be seen in the Hamilton and Niagara region, where the area’s nearly 3000 coop units have, as of spring 2022, no vacancy at all. Beyond their appeal to those seeking
accommodation, cooperative housing developments have been cited as carrying the potential to help Canadian cities add “gentle density” and build cities on a more human scale. Cooperative housing was cited as a priority in the Report of the Federal Task Force on Housing and Urban Development in 1969. While the Task Force wrote that cooperative housing did not receive special treatment under the National Housing Act, the logistical complications involved with establishing contemporary cooperative housing will require special attention from all levels of government. Municipal councils can and should make zoning changes for cooperative housing speedily, provincial governments should provide energy and affiliated rebates, and the federal government should direct the CMHC to work collaboratively with cooperative housing developments to ensure a stable and reliable stream of financing is available for these ambitious and much-needed non-market alternatives.
How Ottawa can help
The federal government can respond to this crisis in two meaningful ways. First, the government can take the Liberal Party’s 2021 election campaign promise to create a “Housing Accelerator Fund” (HAF) and adapt it into a more targeted and meaningful program. The stated goal of the HAF is to “remove barriers and help municipalities build housing more quickly in an ambitious and innovative manner,” The best way to do this will be to target their investments toward human-scaled, community-focused forms of housing, cooperatives being prime among them. By offering funding for democratic forms of housing, the federal government can help ensure housing is an essential component of our communities rather than an investment from which profit can be derived. Beyond further support for cooperatives, the HAF should prioritize low-cost and affordable builds that allow people from a wide array of income levels to participate fully in the housing market in the way they want.
Second, the federal government must pursue a comprehensive strategy to provide Canadians with safe and secure alternatives to save for their retirement. With the percent of workers covered by a registered pension plan declining steadily for decades, Canadians are facing tough decisions when considering their retirement. Working to greatly expand the Canada Pension Plan, Old Age Security, and the Guaranteed Income Supplement, as well as financing community-based low-cost and cooperative retirement and assisted living homes can help Canadians worry less about their security after retirement.
Number 55 revisited
What is the problem with Number 55? It is a house that illustrates a wider problem. It was built by and for working people but sold to a massive corporation as an asset. Plans for its redevelopment have been shelved over community concerns over the proposal and corporate skittishness over Hamilton’s fluctuating rapid transit plans. And so, Number 55 has sat empty for over a decade while the surrounding community faces a dire housing crisis. It is a house that has been jostled and jolted by the market, representing all that is wrong and broken in Canada’s housing system.
But it also represents immense potential. A CDB could identify Number 55 as an underutilized property, purchase it, and work with community-based builders to renovate or replace it. A small walk-up or mixed-use development could be built and transferred to a housing cooperative. Supported by federal grants and populated by Hamilton’s growing population of seniors who, thanks to investments in Old Age Security and the Canada Pension Plan, do not need to worry about their survival as they age, Number 55 could go from being a blight to a beacon of hope.
All we need to do is recognize the incredible transformative potential of democracy and of communities working together. Looking beyond the market and toward democratic alternatives can help us overcome this housing crisis. And, in doing so, we can help build a better, fairer, more equal Canada. It all starts on the homefront.
About the author
Chris Erl (he/him) is a doctoral candidate in the Department of Geography at McGill, focusing on Canadian municipal politics and candidate diversity. He holds a Masters of Planning from Toronto Metropolitan University (formerly Ryerson), and both a Masters of Arts and Honours Bachelor of Arts from McMaster University. He presently lives in his hometown, Hamilton, with his partner Colin.
