When a bank raises the alarm about housing

Have you looked at the price of housing lately?

According to the Realtors Association of Grey Bruce Owen Sound, the average price of a home last year was $693,726. Rentals start at $1,800 per month and go up from there.

To say there is a serious housing crisis in our community, our province and our country is to state the obvious.

In January, Scotiabank Economics published its analysis for the housing crisis we face. Their evidence, comments and solutions are startling.

The report begins by saying, “Imbalances persist across the housing continuum as a result of pervasive policy coordination failures. Fixing the broader housing supply issue remains an imperative and is still the firstbest option. Signs that we are on this path are not promising. The recent uptick in housing starts is welcome but insufficient to restore affordability.”

In other words, government efforts to address housing affordability are not sufficient. Government promises of housing starts are not enough.

More significant, however, is the deep deficit in social housing. That would include subsidized rent, geared to income and social housing.

The Scotiabank report says more than 10 per cent of Canadian households (or 1.5 million people) are in “core housing need” according to the 2021 census. By definition, they have nowhere else to go in the marketplace. Another near-quarter of a million Canadians are homeless.

As troubling as those numbers are, the picture is even worse. Canada's stock of social housing represents just 3.5 per cent (655,000) of its total housing stock, while wait-lists are years long.

Scotiabank uses very un-banklike language to drive home the issue. It say, “The moral case to urgently build out Canada's anemic stock of social housing has never been stronger.”

For a financial institution to use the words “moral case,” means this is far more than just a matter of dollars and cents.

Scotiabank's comments cut even deeper. They say, “Governments are attempting to alleviate the strain on lower income households with a host of transfers, but the cost to do so will continue to escalate as shelter costs rise, market income provides little offset, and policy failures persist.”

Not only that, government transfers are simply tokens; they are not enough to give meaningful help. Again the report says, “Government efforts to alleviate housing affordability pressures through targeted housing transfers are largely trivial relative to the scale of the gaps.”

What can be done? Scotiabank makes several suggestions.

It closes its report by saying, “Canada needs a more ambitious, urgent and well-resourced strategy to expand its social housing infrastructure. Aims to double the stock of social housing across the country could be a start. This would bring Canada just in line with OECD (and G7) averages, but well-below some European and Nordic markets. There is no particular magic behind this number: bringing the stock to 1.3 million dwellings would not fully close gaps. But it signals far more ambition than the 150 k incremental units targeted under the National Housing Strategy with the bulk of its efforts focused on keeping the current count whole.”

In other words, all parties, including federal, provincial and municipal governments, have to step up and step up big to address our housing crisis. Current Band-aid proposals are simply not enough.

The bank continues, “A target should not necessarily imply new builds—in fact governments may not be best-placed to do so. It should encompass a broader approach that contains optionality to build, buy, renovate, or retrofit units to add incremental supply to the social housing sector. The toolkit would also involve much higher rates of concessionality (including greater grant-based approaches) in partnering with other actors, while avoiding conflating the potentially distinct roles around building/ renovating, operating, owning, and funding the expansion of supply. It will take private, public and non-profit sectors together to revitalise Canada's social housing sector.”

That's high level language for “Get your act together, bring people to the table, get visionary and get started.”

Are our governments prepared to step up? More importantly, are we?