Real estate investment or housing discrimination?
By: Natalie Pilla and Salomeh Ahmadi
Housing supply in Ontario has been increasing in the last decade, amidst the continued use of residential real estate as an investment tool. This prices out and displaces community members. This practice, known as the commodification of housing, or the financialization, threatens the dignity and safety of people and their communities, leaving many low- and middle-income people without adequate, affordable housing.
The financialization of housing “occurs when housing is treated as a commodity – a vehicle for wealth and investment, rather than a social good” (OHCHR).
The financialization of housing “occurs when housing is treated as a commodity – a vehicle for wealth and investment, rather than a social good” (OHCHR). Investors now make up more than 25% of Ontario homebuyers, pushing prices higher (Merali, 2021). What this proposes is housing is not a place that helps to determine all other social determinants of health, but a commodity to profit off. The domino effect is – at the expense of someone’s livelihood by using higher and higher market rent rates, and through exploitative means such as, above guideline increases or renovictions. The efficient way to maintain affordability is to address the disappearing affordable housing stock. Renovictions Toronto has mapped the patterns out. As they note, “an AGI can result in a tenant paying tens of thousands of dollars more in rent over the course of their tenancy. AGIs create financial strain for tenants and often follow disruptive repairs and a daunting administrative process, contributing to displacement and the loss of affordable rental housing in Toronto. Landlords frequently conduct renovations to justify AGIs while simultaneously failing to maintain buildings and being slow to respond to tenants’ maintenance requests.”
Ontario has the highest rate of households in core-housing need in the country, and so increasing affordable housing is important in addressing the compounding social issues that come with struggling to meet the rise in cost of living. This includes attending to the social, physical and psychological needs in order to thrive as an individual or family. A home should not simply be shelter, but encompasses the ability to thrive with adequate and suitable housing, nutritious food and income available to attend to all facets of life such as transportation, internet, child-care, leisure, debt and savings, among others.
Core Housing Needs
According to the 2021 census, 25% of tenants in Ontario are in core-housing need (Statistics Canada, 2022). A household is in core-housing need if their housing requires major repairs, has shelter costs equal to more than 30% of total before-tax household income, or does not have enough bedrooms for the number of residents (Statistics Canada, 2017). Census data on Etobicoke-Lakeshore, the area most geographically aligned with South Etobicoke with publicly available data from the census, indicates that 30% of tenants households in the area are in core housing need (Statistics Canada, 2022).
In our survey of residents in South Etobicoke, the top three self-reported issues were the need for repairs, high rent prices, and security. This suggests many community members may be in core housing need. 88% of respondents made less than what’s needed to afford the median market rent in South Etobicoke, and 74% spent more than 30% of their total income on rent, which is the threshold the Canadian Mortgage and Housing Corporation has established for one’s housing to be deemed affordable (CMHC).
We need real housing solutions. ACORN has been calling for rent control, vacancy control, rent freezes, restrictions around above guideline rent increases, and creating a rent relief program for tenants at risk of eviction. These solutions, in addition to building more affordable housing, can help us ensure every community member has a place to call home. People should not be displaced by denying them the right to a secure home and their social networks, by defaulting to a capitalist approach to housing that benefits owners and corporations. Passing off the costs to tenants who have fewer access to resources continues to fuel inequities.
Despite the myth that ‘landlords have mortgages too’ – by and large, it’s lucrative to be a landlord in Canada, including small landlords. New data from 2020 shows 76.3% of “artisanal” landlords reported having profitable rental income, in the Globe and Mail article. There are also significant wealth gaps, landlords’ median annual income is $113,030, which is nearly double that of families with no rental income at $63,040.
Financialization and Corporate Greed
Our community shared “corporate greed” or the inequities created by market command – as a reoccurring theme that’s compounded the #HousingCrisis Income is the only benchmark for housing needs. Corporations should not be defining a human right. Even as they try to, The Star reports, Community advocates blame ‘greed’ for developers’ resistance to new affordable-housing definition, as they call out developers to stop fighting the City of Toronto’s new criteria for affordable housing.
Housing is a human right, not a commodity.
