Every year in Toronto, we hear the same story: homeless shelters and the special “winter respite centres” bulge at the seams, homeless Torontonians die on the streets, and tens of thousands of homes lay empty as rents continue to skyrocket. About a week into the new year, 35-year-old Crystal Papineau died trapped in a clothing donation bin. One week later, 58-year-old immigrant Hang Vo was crushed by a garbage truck while sleeping in a laneway in the financial district.
In 2018 alone, at least 91 known homeless Torontonians lost their lives, almost two deaths per week. Between January 1st and April 9th, 2019 at least 18 known homeless Torontonians lost their lives, with many more to come.
About 235,000 Canadians are homeless each year as of 2016. However, this is not due to a lack of housing. There are more than 1.3 million empty homes in Canada, enough for 3.2 million people to live in. That means that 8.7 per cent of all homes in Canada are empty. That is a ratio of about 5.5 empty homes for each homeless person in Canada.
In 2016, there were more than 99,000 empty homes in the GTA, enough housing for some 240,000 people. That means that 4.5 per cent of all homes in the GTA are empty. Toronto proper has some 65,000 empty homes, enough for at least 150,000 people compared to a homeless population of more than 9,200. This gives us a ratio of more than seven empty homes for each homeless person in Toronto! These statistics are self-reported by landlords, so it is safe to assume that the actual number of empty homes likely exceeds the reported number.
An estimated 1.7 million households, or 12.7 per cent of Canadians, are in “core housing need” as of 2016, meaning that they either spend at least 30 per cent of their before-tax income on housing, have smaller than required bedroom space, or have housing in need of serious repairs. Youth, large families, new immigrants, and Indigenous Canadians make up the majority of those in core housing need.
Meanwhile, by analyzing the language of real estate listings that implied, or outright stated, that a property was “never occupied”, Better Dwelling found that 1 in 3 listings being resold in Toronto have never been occupied. Most of these were dwellings that were built just over a year ago, and were bought before construction for the purpose of house flipping, with each successive seller adding a premium before selling it to the eventual occupant.
This stark contradiction between homelessness and empty real estate clearly illustrates the absurdity of the market under capitalism. We have the resources to end homelessness in the GTA, yet it continues to rise.
Housing for profit rather than need
The reality is that in Toronto today, housing is used for speculation and the profit of the wealthy elite, rather than being considered a right for the majority of people. Rising housing costs attest to this fact. The cost of an average home in Toronto increased by $132,721 between October 2015 and October 2016. That is twice the median household income. The median household income has risen by less than one per cent over the past 30 years while the average home cost has increased by more than 188 per cent!
The average working class Canadian has lost all hope of being able to afford a property. In Toronto, in February 2019, the average price of a home was $767,800, making it the second highest price of an average home in Canada, right after Vancouver. This has helped make the Toronto housing market one of the fastest-growing sectors in Canada, and raked in huge profits for construction companies and banking elites that continue to speculate on mortgages. The Toronto housing bubble is the third largest globally and far surpasses what the U.S. housing bubble stood at just before the 2008 financial crisis.
Crushing debt making home ownership a fantasy
The lack of affordable housing in Toronto and in Canada is a symptom of capitalism. We have a surplus of homes, but the people who need them the most cannot afford them, leading to droves of empty homes. Real estate speculation runs rampant in housing markets caught in a bubble. The same thing happened during the 2006 housing bubble in cities like Miami, Las Vegas, and Phoenix. Flipping units for profit is a problem for Canada’s record consumer debt.
According to the Bank of Canada (BoC), Canadian household debt has been rising at an annual rate of six per cent. In December 2016, it reached a new record high, surpassing $2 trillion. That is nine per cent higher than the total business debt, 20 per cent higher than GDP, and 30 per cent higher per capita than in the US.
A shocking 70-plus per cent ($1.436 trillion) of all this debt is real estate mortgage debt, which is rising at a rate of seven per cent per year. Personal debt made up of credit card debit, personal lines of credit, auto loans, and consumer credit amounts to just under 30 per cent ($569 billion) of all debt and is rising at a rate of 3.3 per cent per year. Hence, Canadians owe $1 in personal debt for every $2.50 in mortgage debt! In addition, mortgage debt is rising faster than household debt and is rising at twice the rate compared to personal debt.
Tory’s Housing Now initiative
The housing crisis is so acute that it cannot be ignored, even by the ruling class. On Jan. 30, Toronto City Council approved Mayor John Tory’s Housing Now initiative. The plan intends to fulfill Tory’s campaign promise of building 40,000 affordable units over the next 12 years.
The first step of this plan is to start building 10,000 homes on 11 sites, including some commuter parking lots near subway stations, by 2024. Of these first 10,000, a third must be offered at affordable rent rates, another third can be offered at market rates, and the last third can be made into (much more profitable) condominiums.
The plan incentivizes property developers and non-profits to build housing at these sites and, in return, the land is offered at 99-year leases and property taxes and other fees on the affordable housing are waived, giving already wealthy property developers a sum total of $280 million in tax breaks and subsidies.
The weakness of the plan becomes even more evident when one considers that the affordable rent rate is defined at 80 per cent of the market rate. In 2018, the average market rate for a one-bedroom rental in Toronto was $1,372, making the “affordable” rate $1,098. The city uses a benchmark that a maximum of 30 per cent of income should go toward rent, which means a tenant needs to earn $44,000 a year to afford such an apartment. Only 10 per cent, a mere 370, of the new affordable units will be offered at a maximum of 40 per cent market rent, which comes out to a maximum of $549. For these units, the tenant needs to earn at least $22,000 annually!
This utterly ridiculous plan will do nothing for the 97,000 people on Toronto’s waiting list for “rent-geared-to-income” social housing. Furthermore, those on social assistance and suffering from homelessness cannot afford to pay anywhere near 80 per cent of market rent or even 40 per cent of market rent. This “affordable rent” is completely unaffordable and provides nothing for the most marginalized members of society. The best way to provide homes for people is by investing in public housing, something both the Conservatives and Liberals are completely unwilling to do.
Moreover, subsidizing prices does nothing to address the root of the problem: that under capitalism, housing is only produced for profit. Subsidizing prices just aids the parasitic developers, construction firms and landlords by propping up the market. Deputy mayor and chair of the planning and housing committee Ana Bailao, acknowledges this, saying that demanding more affordable units could “kill the program” by scaring off non-profit and private sector partners.
Canada’s 10-year National Housing Strategy
In April 2017, the federal Liberals announced a $40 billion, 10-year plan to deal with homelessness and the affordable housing crises. It aims to provide affordable housing to elderly and battered women, repair 300,000 units, lift 50,000 people out of homelessness, ensure that 385,000 homes keep their affordable rent, eliminate housing need for 530,000 households, and provide an average of $2,500 in rent subsidies for 300,000 households through the Canada Housing Benefit. The strategy also requires all incoming federal governments to maintain a housing plan.
One massive catch in this strategy is that $14 billion of the funding is supposed to come from the provinces, territories, municipalities, and the private sector. Provincial subsidizing of housing has been decreasing considerably over the past period. Instead of reversing this trend towards austerity, provinces will pay for funding requirements by squeezing money from other programs, placing the cost on the backs of struggling workers and the poor, as we are seeing right now with Ford in Ontario. Instead, this money should be taken from the wealthy parasitic capitalists who created this crisis in the first place.
A more important aspect of this strategy is that most of it, including both construction of the 100,000 pledged units over a decade and the $2,500 annual housing benefit for 300,000 families in need, is not slated to take place until after the 2019 federal election in October. This delay makes it clear that the strategy is nothing but a blatant attempt by the Trudeau Liberals to use the rampant homelessness and lack of housing as an election ploy. This strategy also does nothing to tackle the widespread homelessness and housing needs of Indigenous communities.
The “state of emergency” vote
Some housing advocates have been calling on the city to declare homelessness and the housing crisis as a “state of emergency”, hoping that this will put “a moral obligation” on the city to deal with it. On Jan. 30, Toronto City Council voted down that motion. Don Peat, communications director for Mayor Tory, said that “city staff has been clear that emergency declarations don’t apply to long-term systemic and economic problems.”
While declaring homelessness a “state of emergency” would not have actually obligated the city to do anything to solve it, by voting it down Tory makes it clear that he does not care about homelessness and is quite open about his disdain for struggling tenants.
From the “Housing Now” plan to voting down the largely symbolic “state of emergency” declaration, to the federal Housing Strategy, it is clear that we cannot appeal to the Conservatives, Liberals or property developers to solve this crisis—they are the very people who created the housing crisis in the first place. We cannot appeal to the oppressors to help the oppressed. What we need is a solution by working class people for working class people. What we need is a socialist solution to housing.
No solution to housing crisis under capitalism
Concretely addressing the housing crisis, inevitably, leads us to addressing capitalism and its ills and the ultimate question of who should pay.
All of the solutions presented by the Tories, Liberals, and even some reformists put the burden of paying for housing on working class people. However, it is the speculation of the wealthiest one per cent that leaves homes empty and causes rent to skyrocket. The rich should pay for this crisis in housing.
A socialist government would seize empty, unused homes and utilize them to house working class people in addition to investing in a massive plan to construct high quality social housing units for poor neighborhoods. Under socialism we could eradicate the scourge of unemployment through training an employing youth from poor neighborhoods to be builders, architects etc… Only by taking the reins of the economy into its own hands, and making decisions based on need instead of profit, can the working class solve this problem for itself.