Should Canadian taxpayers finance more subsidized housing?

It is a debate of our era: Should Canadians allow more of their taxes to be directed to people squeezed out of housing?

Developers might argue that giving free rein to the for-profit housing market, which would lead to homes being built easier, cheaper and faster, is the way to bring down prices.

But a coalition of 28 Metro Vancouver urbanists maintain subsidized housing has in the past, and will in the future, be a crucial component for solving the country’s housing crisis.

Prominent developer Stanley Kwok, the key figure behind Concord Pacific’s massive Vancouver Expo lands highrise development, reflects an attitude common among mega-developers.

Kwok does not believe affordability lies in social housing, of whatever form. That’s mostly, he told me a few years ago, because “the money that goes into it is, in fact, taxpayers’ money. Nothing is free.”

Instead, Kwok said the route to affordability lies in governments allowing developers to build smaller apartment units in a sea of residential towers — like in Hong Kong, where Kwok was raised.

“I think (Metro Vancouver’s cities) should upzone everything. Then the prices cannot go up, because it would overflow the market. It would flood the market with housing supply. Then prices can’t go up,” Kwok said.

The B.C. government has, for all intents and purposes, basically adopted Kwok’s model, for good or bad.

Premier David Eby brought in sweeping legislation to upzone much of the province, which forces mayors and city councillors to automatically approve four- to six-unit apartment buildings on virtually all detached properties, as well as towers around transit hubs.

But mandating radical increases in housing density won’t necessarily bring affordability, say the scholars, planners, architects and small-scale developers who recently wrote two public letters to Prime Minister Mark Carney, Eby and other politicians. Going by the name Housing Reset, the ad hoc coalition champions the role governments can play in financing housing.

Among other things, the authors called on federal and provincial governments to do more to “invest in non-profit, co-op and public housing that remains affordable long-term.”

In addition to promoting “co-op housing with larger units for families,” the urbanists call on governments to provide tax incentives for families to build more secondary suites, to legislate more affordable 99-year leases, and to offer more public land for housing.

To help make their case, the urbanists cite a variety of what they consider creative state-sponsored housing programs in Singapore, Vienna, the Netherlands, Finland and England.

The governments of B.C. and Canada have in the past couple of years have begun again to put more funding into subsidized housing. Prime Minister Mark Carney talks a lot about his massive Build Canada Homes program, and this province has B.C. Builds Homes.

That said, it remains almost impossible to separate rhetoric from reality and obtain reliable figures on just how much Ottawa, the provinces and municipalities have been directing to subsidized housing.

Without bogging down in the endless details of how different forms of subsidized housing are structured, I asked three signatories of the open letter to explain the value of using public funds to help house those who cannot afford a decent place to live.

“Instead of viewing subsidized housing as a burden, we need to start seeing it as essential to realizing a healthy economy,” said Penny Gurstein, a UBC professor emeritus who specializes in planning.

“Affordable, suitable and adequate housing is an asset that revitalizes communities, creates employment and provides secure homes for people to move forward in their lives.”

Gurstein is not alone in citing the prosperity that came from Canada subsidizing housing for veterans after the Second World War. “Between 1944 and 1960, a million low-cost homes were publicly built and financed for the families of returning servicemen,” she said.

A second heyday of federal support occurred in the 1960s and 1970s, Greg Suttor says in his book, Still Renovating: A History of Canadian Social Housing Policy. At one time, Ottawa produced about 25,000 non-market housing units a year, particularly co-ops and low-cost rentals. But those programs were drastically curtailed in the early 1990s.

In their public letters, the urbanists make it clear that taxpayer-funded subsidies are just one of the ways forward. It’s also important, they say, to reduce demand for housing by lowering international migration levels, and by finding ways to discourage investor speculation, domestic and foreign.

Asked about the fairness to taxpayers of providing subsidies, Patrick Condon, a UBC prof, brought up some local success stories.

“Many Vancouver residents don’t realize that creating the famous False Creek South and Champlain Heights co-ops required very little direct taxpayer funding — and the taxes generated by these developments quickly offset what was spent,” said Condon. author of Broken City: Land Speculation Inequality and Urban Crisis.

“The crucial support came from CMHC in the form of loan guarantees at interest rates two points below market,” he said. “In effect, all public support was fully repaid, with interest, over standard amortization periods.”

UBC geography professor emeritus David Ley, author of Housing Booms in Gateway Cities, broadened the philosophical case for taxpayers underwriting housing.

“A democratic society implies some level of redistribution to mitigate inequalities. So in Canada we … recognize that excessive disparities are not compatible with fairness, justice and social order,” Ley said.

“National public health care recognizes that people’s access to health should not be governed by their ability to pay. Social ethics, altruism are part of the motivation here, derived from long-established biblical principles to protect ‘widows and orphans.’”

That said, there is a second reason for governments to invest public dollars in housing, Ley said.

Self-interest.

“The greater the inequality, the more likely are higher crime rates among the poor and marginalized that will penalize the whole society. Many see housing, like health care, as a right, with the under-housed having a legitimate claim on society, especially in high-priced cities where even full-time employment may not guarantee adequate housing.”

A big city relies on the working poor to serve in a multitude of necessary jobs, Ley said, persuasively. “In gateway cities like Vancouver, with high levels of housing unaffordability, employers are recognizing the private market is blocking access to the labour force they require. Some form of social housing is the necessary solution.”

Expect this debate to become more intense and focused in the years to come.

dtodd@postmedia.com

x.com@douglastodd

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