By Dr. Alan Walks (Professor, Geography and Planning, University of Toronto), Sean Grisdale (PhD Candidate, Geography and Planning, University of Toronto), and the Affordable Housing Challenge Partnership collective
Of the three major platforms, the NDP does the best job of emphasizing the need for more affordable rental housing as a key component in addressing Canada’s housing affordability crisis. The platform commits to building 500,000 quality, affordable units in ten years. The NDP implies that the majority of this 500,000 will be rental tenure, built in collaboration with provinces, municipalities, co-ops and affordable housing providers. We are pleased with the prominent attention given to co-ops and non-profits as we consider these institutions as key to building a genuinely affordable housing landscape. We would also emphasize that the NDP’s building incentive (waiving HST/GST on affordable development) is the only building incentive among these three platforms that is explicitly attached to building “affordable” housing. Our main critique of the NDP platform is that is falls prey to two trends we see in the other platforms: promoting easier access to mortgage credit (with 30-year amortizations), and scapegoating foreign buyers as a significant cause of the housing crisis.
- Commits to producing a significant number of new, quality, energy efficient and affordable housing units (500,000 over ten years).
- Explicitly commits to helping co-ops and non-profit housing providers build new affordable housing as fast as possible
- Waiving federal portion of HST/GST on production of affordable housing is a real incentive that will get more housing built
- Rent relief will provide immediate and important relief for society’s most vulnerable
- Policies facilitating co-housing serve an important form of niche housing that is currently underserved
- A Beneficial Ownership Land Registry will be key to identifying who owns real estate
- Commits to an “Indigenous National Housing Strategy” within 100 days of office
- Commits to ending homelessness within ten years
- Policies expanding access to mortgage credit will only make housing more unaffordable (eg. 30-year mortgages)
- Overemphasizes the potential impact of a foreign buyer tax
- Unclear plan for addressing role of domestic big business and speculation in the housing market
The New Democratic Party Platform
There are eight stated policies or policy objectives related to housing in the NDP platform:
1. Create at Least 500,000 Units of Quality, Affordable Housing
Stated Policy Objective: “a New Democrat government will create at least 500,000 units of quality, affordable housing in the next ten years, with half of that done within five years. This will be achieved with the right mix of effective measures that work in partnership with provinces and municipalities, build capacity for social, community, and affordable housing providers, to provide rental support for co-ops, and meet environmental energy efficiency goals.”
Will this policy lead to housing that is more affordable? Yes. The stated goal would create enough new units to substantially improve the affordability of rental housing, and of potentially owner-occupied housing as well, given the greater choice provided to consumers. However, it remains unclear how many of these new units will be purpose-built rental tenure or some other tenure.
Will this policy lead to the production of new affordable rental housing? Yes. The statement says 500,000 new units of ‘quality, affordable’ housing will be built over 10 years, half of this in the first five years (which does not actually indicate speedier development early on – they are saying that half the new units will be built in the first half of the period). This translates to 50,000 units per year, which is an ambitious but eminently doable objective. It is not clear exactly how many of these units will be rental units, but the language suggests that rental tenure will be the main tenure for the vast majority of these units.
Will this policy alleviate housing-based inequality? Yes. This policy would substantially alleviate housing-based inequalities by building much-needed affordable rental housing.
2. Fast-Start Funds
Stated Policy: “In order to kick-start the construction of co-ops, social and non-profit housing and break the logjam that has prevented these groups from accessing housing funding, we will set up dedicated fast-start funds to streamline the application process and help communities get the expertise and assistance they need to get projects off the ground now, not years from now. We’ll mobilize federal resources and lands for these projects, turning unused and under-used properties into vibrant new communities.”
Will this policy lead to housing that is more affordable? Yes. The purpose of this policy is to help “co-ops, social and non-profit” housing providers build new affordable housing, and these providers are among the main experts in providing affordable housing. If the full 500,000 new units are built, this will substantially improve the average affordability of rental housing across the country.
Will this policy lead to the production of new affordable rental housing? Yes. These new ‘fast-start’ funds will help “co-ops, social and non-profit housing” providers get new projects “off the ground”. Presumably, this will be linked to the construction of the 500,000 new units of quality affordable housing mentioned in the first policy statement.
Will this policy alleviate housing-based inequality? Yes. Any assistance that can be provided to co-ops, social and non-profit housing providers to produce new units will create a more equitable housing landscape.
3.Waive the federal portion of the GST/HST on new affordable rental units
Stated Policy: “A New Democrat government will also spur the construction of affordable homes by waiving the federal portion of the GST/HST on the construction of new affordable rental units”
Will this policy lead to housing that is more affordable? Yes. This policy will improve the construction cost equation for building new affordable rental units, which will mean the resulting units can be rented for less than they would have otherwise, producing more affordable units.
Will this policy lead to the production of new affordable rental housing? Yes. This policy is intended to incentivize the production of new affordable rental housing. If there are projects that were previously bordering on being viable that could benefit from having this tax reduced, this policy will push them into fully viable territory, facilitating the construction of new units. Saying this, it is not clear how many units this policy could actually help produce.
Will this policy alleviate housing-based inequality? Yes. If this policy makes some projects newly-viable from a cost perspective, it will have improved the housing equity landscape.
4. Rent Relief
Stated Policy: “We’ll provide immediate relief for families that are struggling to afford rent in otherwise suitable housing, while we bring forward long- term solutions to the housing affordability crisis.”
Will this policy lead to housing that is more affordable? Unclear. Any household receiving rent relief will obviously benefit, but the provision of rent relief could mean that landlords feel there is room to raise rents further. Thus, the impact on the average rent remains in question. This does not mean that the policy is misplaced, however, as the benefit of rent relief to vulnerable households facing eviction far outweighs any potential changes in average rents, which even if they involve increases would be minor.
Will this policy lead to the production of new affordable rental housing? No. This policy is meant to provide stability for existing tenants.
Will this policy alleviate housing-based inequality? Yes. This policy helps lower-income tenants who are most vulnerable remain in their housing. It will significantly help improve the lives of the children of lower-income households, as they will not have to move to new housing as often (and in turn, move to new neighbourhoods, schools, make new friends, etc). Moving often as a child has been found to impact well-being later in life.
5. 30-Year Mortgage Terms for First-Time Buyers, and double the Home Buyer’s Tax Credit
Stated Policy: “we will re-introduce 30-year terms to CMHC insured mortgages on entry-level homes for first time home buyers. This will allow for smaller monthly payments, freeing up funds to help make ends meet for young families. We’ll also give people a hand with closing costs by doubling the Home Buyer’s Tax Credit to $1,500.”
Will this policy lead to housing that is more affordable? No. While the lower payments will initially benefit those first-time buyers who qualify for the longer amortization term and the additional Home Buyer’s Credit, the fact this allows households to bid more for housing will push up prices to the point where they are no longer better off. The eventual result will be higher prices, coupled with higher debt loads for first-time buyers.
Will this policy lead to the production of new affordable rental housing? No. This policy is intended to help buyers to bid for housing.
Will this policy alleviate housing-based inequality? No. It is likely to increase inequalities, as the price of housing and land rises as a result of these policies. Higher prices in the owner-occupied sector lead to higher rents in the rental sector, as landlords find they need to charge higher rents to afford their own mortgage payments, and the higher prices of owner-occupation push more people to compete in the rental sector.
6. Facilitate Co-Housing
Stated Policy: “a New Democrat government will provide resources to facilitate co-housing, such as model co-ownership agreements and connections to local resources, and ease access to financing by offering CMHC- backed co-ownership mortgages.”
Will this policy lead to housing that is more affordable? Yes. Co-housing models have traditionally provided affordable options for middle-income and lower-income households, so any policies that help build co-housing will improve overall affordability.
Will this policy lead to the production of new affordable rental housing? Potentially (unclear). Co-housing typically involves shared ownership, but there may be room for including some rental units in any new co-housing buildings.
Will this policy alleviate housing-based inequality? Yes. Co-housing models help serve a greater diversity of households, and help maintain housing stability for lower-income households. While co-housing will never be the main solution to the rental housing crisis, it can serve an important niche in helping create a more equitable housing landscape.
7. Foreign Buyer’s Tax
Stated Policy: “To help put an end to speculation that’s fuelling high housing prices, we’ll put in place a 20% Foreign Buyer’s tax on the sale of homes to individuals who aren’t Canadian citizens or permanent residents.”
Will this policy lead to housing that is more affordable? Not likely. As noted above, foreign buying was already minimal before the pandemic (especially, after the introduction of provincial taxes on foreign buyers) and it has dwindled to very small numbers during the pandemic. It has had minimal effect on housing prices, so an additional tax is not likely to do much at all.
Will this policy lead to the production of new affordable rental housing? No. The policy only targets sales of property.
Will this policy alleviate housing-based inequality? No. As noted in relation to the platforms of the Liberal Party and Conservative Party, if there were a number of foreign buyers waiting on the horizon for the pandemic to end in order to unleash a new wave of foreign buying, this policy could help prevent that from occurring. However, there is no evidence of that wave waiting to happen. Furthermore, if implemented in similar fashion to the policies in British Columbia and Ontario, this tax could reduce the incentive to immigrate to Canada (given the lack of affordable rental housing new immigrants face in Canada). And a policy like this makes it seem like foreign buying is one, or perhaps THE, cause of the housing affordability crisis, when in fact there is no evidence of this, but the perception can lead to greater inequalities as a result of rising racism, xenophobia and discrimination.
8. Fight Money Laundering
Stated Policy: “New Democrats will also fight money laundering, which fuels organized crime and drives up housing prices. We will work with the provinces to create a public beneficial ownership registry to increase transparency about who owns properties, and require reporting of suspicious transactions in order to help find and stop money laundering.”
Will this policy lead to housing that is more affordable? Potentially. As noted in relation to the other platforms, Canada needs more data on fraud and money laundering, and the latter typically leads to higher costs, so this initiative is welcome and could (slightly) lead to improved affordability.
Will this policy lead to the production of new affordable rental housing? No. This policy is not directed to producing new rental housing.
Will this policy alleviate housing-based inequality? Potentially. Lower-income households are more likely to be victimized by fraud, so addressing the latter will produce more equitable outcomes overall. As with the other platforms, a beneficial ownership registry would help the public understand who owns land and housing, and help produce a more transparent, fair and democratic housing system, but more detail is required to fully assess the impacts on inequality.