In the midst of the oil-sand-fuelled economic boom in Alberta, people across the province are facing what could be the worst housing crisis in its history. The rapidly developing oil industry has caused a migration of people from across the provinces into Alberta and has put a tremendous pressure on the housing and rental market. Housing prices in Alberta have increased to a point that it is almost impossible for working people to get a house without being tied to an exorbitant mortgage. At the same time, the rental vacancy rate has dipped below 1% in Alberta, while landlords, capitalizing on the housing shortage, dramatically increase their rents.
The labour shortage caused by the booming economy has attracted many people from across the provinces – and across the world as well – to come try their fortunes here in Alberta. The 2006 census revealed that Alberta’s population increased by 10.6% between 2001 and 2006, the highest population growth amongst all the provinces and nearly double the national average of 5.4%. Such massive population growth creates a tremendous pressure on infrastructure: health services, social services, education, sewers, and housing. Many municipalities have cried out for a moratorium on the oil-sand development to allow them to catch up on the lagging infrastructure, a legacy from years of neglect by the Conservative government who refused to invest adequately in public infrastructure.
The great influx of people into Alberta has created a shift in housing supply and demand. Apartment vacancy rates in Edmonton fell from 4.5% in October 2005 to 1.2% in October 2006. As of April 2007, the average vacancy rate in Alberta was 0.9%, the lowest in Canada (compared to the 2.8% average in Canada’s 35 largest cities). You do not need to be an economist to know that such great demand over supply means an increase in rent. In Calgary alone from October 2005 to October 2006, the average rent for a 2-bedroom apartment increased by 19.5%. Amongst Canada’s major cities, Calgary now has the third highest average rent for 2-bedroom apartment, $1037 per month, after Vancouver ($1051) and Toronto ($1073). Meanwhile, in the northern community of Wood Buffalo where major oil sand projects are located, the average rent for a 2-bedroom apartment reaches a whopping $1681 per month. The average price for a house in Alberta increased from $257,000 to $343,000 from the beginning of 2006 to the beginning of 2007, an increase of 33.4% compared to the national average of 10%. In Edmonton alone, over the same period, the average housing price increased by 50.1%.
Such is the picture of Alberta’s housing market that is spiralling out of control. The number of homeless people in Alberta is shooting up, and more and more people are at risk of being homeless as they are unable to pay for housing. This is especially true for people with a lower fixed income such as seniors and the disabled. People are now questioning why, in a booming economy, are people finding it harder and harder to live? Who is actually benefiting from this booming economy? In response to this crisis, many grassroots coalitions are being organized to call for government intervention. However, the Conservative government is adamant that it won’t intervene at all. The market will correct itself, say the Conservatives.
In order to solve the problem of housing, once and for all, a correct understanding of the problem is needed. Just like a doctor who seeks to cure a patient, the doctor needs to know all there is about the patient and its disease. Without knowing so, the doctor might end up killing the patient. This is true for the housing movement that is now crystallizing in Alberta. Without a correct understanding of the system that causes such a crisis, a correct program can never be formulated, and the movement will end up just treating the symptoms instead of curing the disease. And often, such a movement itself could be an impediment to the very goal of eradicating housing problems that they claim to serve.
Petty Reformers and the Housing Crisis
It is quite interesting to study the solutions being offered by the army of well-intentioned reformists on the housing question. One proposed solution to the housing crisis is for each family to own a house – not to rent from the landlords, but to independently own a house. That way, each family is a master of their own domain and not at the mercy of the landlords whom they see as parasites taking away part of their salaries. However, this solution ignores the fact that a mortgage is not real ownership – the bank has replaced the landlord. It can often take over 30 years to pay this mortgage off.
Instead of renting a house, various proposals of rent-to-own schemes are put forward. They put forward an argument that all landlords, through collecting rents over a period of time, have already secured their initial capital. Therefore, tenants should own the place that they are renting after a certain period of payment and not be obliged to pay rents anymore.
Another solution that most of these housing activists, reformist in nature, propose is regulations in rent control and housing prices. In effect, they want to control the free market through regulations. Not surprisingly, both rent controls and rent-to-own plans are condemned by developers and investors, who threaten to abandon development if their profit margins are put at risk. The petty bourgeois reformists cannot do anything other than condemn these capitalist developers and morally advocate the need for affordable housings for all.
Socialism, the only solution
It is very clear that these housing developers and investors are not interested in providing adequate housings to everyone. This is not just an isolated incident in time and space. Over more than 100 years, they have shown themselves to be unwilling and incapable of providing basic housing for all. It is time for us then to take control of our own lives. Just 40 years ago, Canadians fought hard to reclaim their healthcare so that each of us could have access to healthcare regardless of our income. Now, it is the time for us to reclaim our housing industry, to establish a universal housing program much like our universal healthcare, to establish a democratically planned housing industry.
However, another lesson has to be learned from our constant struggles to keep our universal healthcare. Such public services cannot be maintained under capitalism. Since its inception, our public healthcare has been under attack. Both open and hidden attempts have been made to privatize our healthcare. This is true for all the social gains that we have achieved. Under capitalism, our gains will never be secure. Socialism is the only way forward. The working class needs to take over the means of production and banks from these parasites and direct the wealth of society democratically and in a planned manner in order to solve all societal problems, including the housing problem. Under socialism, public housing, controlled by communities, will be set up to ensure that everyone has a right to a house according to their needs.
While many of the reformists or so-called radicals will scorn at this socialist solution, claiming that it is too radical and will scare away many people, it is exactly at such impasse in capitalism that a radical solution is needed. The masses are now looking for a real alternative. What is needed is a correct understanding of the underlying problems of capitalism, patience and tactfulness in explaining the socialist solution, and persistent ground work. With these methods, a genuine socialist solution to the housing problem can be found to end the scourge of homelessness, debt, and poverty.