In honour of National Housing Day, I’m live blogging from the National Housing Conference in Ottawa. One year after the adoption of the country’s first National Housing Strategy, CMHC is hosting housing experts from around the world on topics as diverse as social inequality and innovative financing tools.
Yesterday’s keynote speaker was architect Douglas Cardinal, who spoke about the different worldview between Indigenous and settler cultures. He gave examples of his engagement with communities, learning from their cultural practices and integrating their daily routines into his designs. There was a very interesting plenary session on the increasing commodification of the housing market with Manuel Aalbers (KU Leuven), Michael Oxley (Cambridge University), Leilani Farha (UN Special Rapporteur on the Right to Housing), Paul Kershaw (UBC), Susanne Soederberg (Queens), and CMHC President/CEO Evan Siddall. In a session on financial tools, presenters discussed energy-efficient mortgages and guidelines on energy efficiency and enforcement tools for rental buildings in the European Union. A session on alternative housing models featured a mixed-income cooperative model from Winnipeg (Blair Hamilton, Co-operative Housing Federation), tenancy in common ownership from San Francisco (Rosemarie MacGuinness, Sirkin Law), community micro-investments in local businesses from Portland (John Haines, Community Investment Trust), and fractional property investment from Australia (Sibel Buyukbaykal, Brick X).
Today’s keynote is Danny Dorling, Professor of Geography at the University of Oxford. The UK is now the country with highest income inequality in Europe. He commented that in countries where inequality is considered a real issue, like Norway, they’re trying hard to reduce it–in the UK and the US governments prioritized social inequality in the 1950s up until the early 1980s, but now they blame poor families for not trying hard enough. Since 2004, families having to live in the private rental market, where they pay exorbitant rents and can be evicted with only two months notice, have increased dramatically–eviction from private rental units is the most rapidly increasing reason for homelessness. However, income inequality has peaked in all OECD countries. Dorling concluded by saying that after the Grenfell Tower fire, housing has become central to UK politics. He suggested looking at second, third, or fourth homes that are empty and what is done about this in other countries like the Netherlands and Austria (e.g. increased property taxes, empty home taxes); deciding that everyone would pay 30% or lower for their housing by a certain year and then understanding what targets have to be met each year to achieve that; inspecting properties and allowing the state to take them over if they are not well maintained; allowing tenants to report poorly maintained properties and allow them to be taken over by the local housing authority.
The keynote plenary session today featured bankers from the Bank of Canada (Carolyn Wilkins), Reserve Bank of Australia (Carl Schwartz), Finansinspktionen (Swedish Financial Supervisory Authority) (Erik Thedeen), and the Central Bank of Ireland (Roberrt Kelly). In Canada, mortgage rules have been tightened since 2016 and the Bank of Canada raised interest rates, decreasing vulnerability among owner households with new mortgages (those who had borrowed up to 450% of their incomes). In Sweden, strong economic growth has contributed to rising housing costs since 2012. They introduced a loan to value cap and an increase in percent amortization for the loan to income ratio, and have seen a decrease in those vulnerable owner households. Australia introduced investor lending restrictions as well. In Ireland they increased the downpayment amounts to 10% for first time buyers and capped mortgages at 3.5 times their income; for second and subsequent buyers it was 20% deposit and the same mortgage cap. This helped stabilize the situation, but force first-time buyers to spend longer saving their downpayment, which will maintain pressure on rental housing.
In a session on focused on rental housing, Marika Albert (BC Non-Profit Housing Association) discussed the Canadian Rental Housing Index they created with partners across the country, using data from the 2016 long-form Census. According to Catherine Leviten-Reid (Cape Breton University), Cape Breton Regional Municipality conducted a study on their own, as the secondary rental housing market is not captured by the CMHC Rental Housing reports. They found that 43% of rentals and most new construction is in the secondary market, and that one and two bedroom units are more expensive than purpose-built rental units–three quarters of the secondary market units did not include all utilities. Just over a third of secondary market units were marketed towards seniors, and only 8% towards professionals. Nathanel Lauster (UBC) discussed the growth in condominiums as investment-rental opportunities, but contributes to more fragile tenancies as landlords can more easily claim the property for their own use. Rents are also more expensive than for purpose-built rentals, rented condo units have a higher turnover, and the typical households are couples rather than single parents or two parents with children. Jacob Cosman (Johns Hopkins University) discussed the declining rate of new housing construction in the US since the recession, and how in most cities it’s one or two companies that are building the majority of new units. There are fewer units built in general, less supply in the pipeline, and higher price volatility because of the monopoly. He hasn’t seen this same pattern in Canada as we didn’t see a major decrease in construction after the US housing market collapsed.
We had an interesting update from Maryam Monsef, the Minister of Status of Women, on the role that women will be playing in the new National Housing Strategy. A Pan-Canadian Symposium on Women’s Housing was held with a range of women across the country directly impacted by women’s housing and homelessness. They produced six calls to action including guaranteed annual income, including women with lived experience in policy development and roundtables, north and Inuit housing, transparency with the National Housing Strategy and National Poverty Strategy, and support for a symposium next year. CMHC President Evan Siddall agreed to many of these, and CMHC will be publishing the report from the symposium within a few weeks.
The final plenary session looked at the impact of private capital on social outcomes. Nancy Neamtan (Territoires innovants en économie sociale et solidaire) forcused on solidarity finance: tools, institutions, actors that are designed for collective initiatives and enterprises (non-profits and co-ops), which are co-built with community actors. In Québec, there has been a 32% growth in this type of financing from 2013-2016. Some examples include Réseau MicroEntreprendre, which has 15 funds in 12 regions, the Chantier de l’économie social Trust in 2007, a $52.8 million fund in patient capital for collective organizations and enterprises, and $66 million invested in 249 projects in the province. There’s a fund for cooperative student housing (FILE) which was initiated and supported by student associations and youth organizations and will allow construction of co-op housing units, and one to assist community housing renovations (FARHC). Major challenges include scaling these efforts up, continuing to attract new categories of investors, and mobilizing private capital in long term (bond type) investments. Shayne Ramsay (BC Housing) discussed the new Housing Investment Corporation, which allows non-profits to access national and international capital–it’s funded partly by a $20 million contribution from CMHC, which allows the HIC to leverage $400 million in loans, and TD and Scotiabank are co-leads on the project. This allows the money to be available regardless of the federal government’s priorities, and enables long-term fixed-rate mortgages (30 years +) for non-profits, because it aggregating non-profits together rather than treating each one like a small, individual borrower. Their first loans will be given in the next few weeks, focused on new housing and meeting the housing innovation fund criteria. Michael Oxley (Cambridge University) mentioned that non-profit housing associations in the UK raise money through selling their own bonds and by borrowing from traditional lenders, as well as the Housing Finance Corporation. Inclusionary zoning is also increasing in importance–it contributed to over 40% of affordable housing starts from 2014-2016. Tax concessions have been granted in other countries (e.g. Germany) to developer who agree to provide rental units at below-market rents to low income households. Tara Vrooman (Vancity).
A great effort from CMHC in bringing together a very diverse group of people to discuss affordable housing, including non-profit staff, people with lived expertise, government officials, and researchers!