Evidence of meeting #69 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was financialization.
A recording is available from Parliament.
Conservative
Associate Professor, School of Planning, University of Waterloo, As an Individual
Just to answer your question, we have increasing investor-based ownership—
Conservative
Scott Aitchison Conservative Parry Sound—Muskoka, ON
I'm sorry. I'm going to stop you, if you don't mind.
Thank you.
Associate Professor, School of Planning, University of Waterloo, As an Individual
I was just going to finish answering your question.
We do have increasing investor ownership of single-family rental housing as well, so that would be.... There's core development REIT, for example, real estate investment trust of single family homes—
Conservative
Scott Aitchison Conservative Parry Sound—Muskoka, ON
Ms. August, thank you.
I ask the questions, you answer, and when I'm done with what you've talked about, I'm going to move onto the next thing.
I'd like to make it clear that I'm not trying to downplay anything that you're talking about. I just want to make sure that I understand exactly where you're coming from, and I want to be sure that I was clear about the second home that people buy to provide a rental and what your thoughts on that are, so thank you for that.
I'm going to move on.
My next question is for the folks at ACORN.
I'm wondering if you can comment on the age of Canada's rental housing stock.
Tanya Burkart Leader, ACORN Canada
Canada's rental stock is aging. It needs to be maintained.
For financialized landlords, their profit strategy basically thrives on lack of maintenance, buying old buildings and using tools like lack of rent control, illegal buyouts, renovictions and demovictions. They have a lot of tools in their arsenal. They have above-guideline rent increases. There's no vacancy control.
Landlords of financialized housing thrive on using old buildings. The conditions of buildings often work against tenants—
Conservative
Scott Aitchison Conservative Parry Sound—Muskoka, ON
Do you think—quickly because I don't have a lot of time—that some of the incentives that used to be used before the seventies to incentivize the construction of new rental units would actually help get more rental units constructed today, if they were reinstated?
Liberal
The Chair Liberal Bobby Morrissey
Thank you, Mr. Aitchison.
We'll now go to Mr. Coteau for six minutes, please.
Liberal
Michael Coteau Liberal Don Valley East, ON
Thank you so much, Mr. Chair.
I'm going to share half of my time with my friend from Hamilton.
My question is for Dr. Lewis.
Thank you for being here today. What you've done to look at the financialization and how it impacts racialized communities here in Canada, I think, is very valuable work.
I'd like it if you could take a few minutes to talk about how financialization impacts communities, and communities within communities, differently.
From some of the research I've seen around home ownership and systemic barriers that are placed in rentals, I know that this impacts communities differently. Can you talk about how it impacts different communities within communities from racialized communities?
Sorry for using the word “communities” so many times.
Dr. Nemoy Lewis Assistant Professor, School of Urban and Regional Planning, Toronto Metropolitan University, As an Individual
No worries.
Financialization impacts communities, especially racialized communities, because a part of the financialization business strategy is to find underperforming properties. Oftentimes, these underperforming properties are in historically disinvested communities, which are, oftentimes, racialized and economically disenfranchised communities.
As such—even speaking to the question that was asked by the other member—these particular entities acquire these aging properties because of the fact that they can deliver the most returns on their investments.
Yes, a lot of these properties are desperately in need of investment, but I think one of the things we have to be clear on is that these companies aren't making these investments for free. These come at a cost. In fact, they come at a very high cost for a lot of folks who are either on social assistance or on a fixed income, especially some of our seniors who are receiving fixed income in terms of their pensions. These particular investment strategies have the potential to exacerbate some of the affordability problems in communities.
Liberal
Michael Coteau Liberal Don Valley East, ON
If you had some recommendations to provide to this committee on things.... If you were in charge, what are, quickly, two or three things you would do to change the practices that are taking place that prevent some communities from having home ownership or just rental access in general? What would be the three big recommendations you'd make to this committee?
Assistant Professor, School of Urban and Regional Planning, Toronto Metropolitan University, As an Individual
In terms of recommendations, one of the things I think I talked about last week was where a lot of these financial intermediaries, such as asset management firms and private equity firms, are getting a lot of their capital. The source of their capital is institutional investors, including some of our public pension funds. I think one of the things that would be prudent of us to do is to prohibit public pension funds, including federal public pension funds, that undermine the government's efforts in realizing the human right to housing for all Canadians.
Liberal
Michael Coteau Liberal Don Valley East, ON
Thank you so much.
I'm going to turn it over to Mr. Collins.
Liberal
Chad Collins Liberal Hamilton East—Stoney Creek, ON
Thank you.
Mr. Chair, I'll start with Dr. August.
Dr. August, all levels of government use a kind of carrot-and-stick approach when it comes to legislation and policies when we try to incentivize areas that we're looking at to perform. In the housing sector, I would use our housing accelerator fund as an example of a carrot approach, as it relates to trying to incentivize municipalities to create new housing supply.
When I look at real estate investment trusts, one of the things I'm looking at is how the national housing strategy should or shouldn't apply to REITs. I've read a lot of your information as it relates to the impact that REITs have had on rising rents across the country. I would agree with a lot of the assessments you've provided. I guess my question would be how we incentivize REITs to help us with our supply issue. I think the private sector is a big part of helping us with the issue of supply.
How do we discourage them from participating in the national housing strategy and contributing to or getting at that issue you've raised as it relates to their impact on market rents? Can you help us with that in terms of recommendations and in terms of how we should treat REITs with financial assistance through the national housing strategy with those two issues at play?
Associate Professor, School of Planning, University of Waterloo, As an Individual
Thank you. That's a great question.
I think it's important to remember that the federal government has an obligation to uphold the right to housing. These firms are violating that right to housing. I think the government should decide to no longer use national housing strategy funds to support firms that are violating the right to adequate housing.
That would mean no longer providing national housing strategy funds to financial firms such as real estate investment trusts, asset managers, private equity funds, institutional investors and so on, whose business strategy in rental housing is to raise rents and extract more value from tenants, make housing less affordable and decrease the security of tenure. There's no social purpose associated with this approach, and so no justification for using federal funds to support these types of companies.
That will go for national housing strategy funds and also for preferred financing from the Canada Mortgage and Housing Corporation, and again, also for tax subsidies. REITs have preferential taxation in this country, and there's no social justification for that. In terms of the stick approach, we should definitely not be using federal taxation policy and subsidies and support for these firms that are actually violating the right to adequate housing in Canada.
In terms of supporting the private sector in developing housing—
Liberal
The Chair Liberal Bobby Morrissey
Dr. August, your time has gone by. Maybe you can get to that in a follow-up question from another committee member.
Bloc
Denis Trudel Bloc Longueuil—Saint-Hubert, QC
Thank you, Mr. Chair.
Thank you to all the witnesses for being here today.
As I mentioned earlier, housing is a critical issue. It is one of the major crises we are facing right now.
Liberal
The Chair Liberal Bobby Morrissey
I'm sorry, Monsieur Trudel.
Do you have a point of order, Mr. Van Bynen?
Bloc
Denis Trudel Bloc Longueuil—Saint-Hubert, QC
Can you hear me all right?
Long live Quebec independence!
Did everyone get that?
