Last year, the value of our home increased half a million, tax free, in one year. Wonderful!
No, it is not wonderful at all. More and more people cannot afford a roof over their head. Think of young couples both working full time, delaying starting a family, saving for their homeownership dream. For too many, it is nothing but a dream. Vancouver condo values increased 22 percent in 2016 and single-family homes 45 percent. No one can save at such a rate. In Vancouver, 51 percent of households now rent. It is a record. The vacancy rate is under one percent, driving up rents. Despite a maximum allowable rent increase of 2.9 percent, Vancouver rents increased 6.9 percent in 2016. Too many loopholes! Run-away house prices sprout inequality like mushrooms scarring the next generation, breeding social tensions. Our cities have become unaffordable, especially to lower-income families. High housing cost is a leading cause of poverty. Most renters spend over 50 percent of their income on rent. Evictions, once rare, now occur regularly. City hall promised to eradicate homelessness by 2015 and initiated real efforts to help. And yet Vancouver’s homelessness is at an all-time high. The social ills of ever rising real estate are impossible to combat. To put housing affordability in stark relief, consider this. When Jayne and I started out 50 years ago, we bought a fine two-bedroom, full-basement family home on a large city lot. A single, modest income paid the mortgage plus the borrowed down payment while Jayne was a stay-at-home mom. Unthinkable today!
The right to shelter
So what can be done? While Christians help the homeless and some churches have built social housing by creatively redeveloping their land and buildings, demand rises faster than supply. It is not enough to treat the symptoms; we must strike at the cause. As a society we allow residential land and buildings to be used for investment purposes. That needs to be stopped. Housing that is affordable is a human right and essential for healthy communities. Where land is limited, it is sheer folly to permit speculation, whether foreign or domestic.
In Vancouver’s notorious Trump tower, 20 percent of suites are owned by buyers who purchased more than one. Speculators take money from society, lots of it, without returning anything to society. This is morally reprehensible and a bankrupt public policy, easy to stop. All gains from real estate transactions should be taxed, heavily, 90 percent or more. Socially useful exceptions could be allowed, such as social housing or homes that have been owner-occupied for several decades. Profit on re-zoning, land development and new construction should be regulated. Residential land and houses are for basic accommodation, not for making money. If we embraced that fundamental principle and fully taxed all attempts at private gain, Vancouver and Toronto’s housing crisis would be no more. Any alternative measures are failures, especially the call to let the market decide. In B.C.’s Lower Mainland land is finite, but the world-wide money supply is by comparison infinite. Under such conditions normal market forces don’t apply. Land is unique; God made only so much of it.
We accept government intervention in the rental market, so why not in home ownership? The energy to heat and light our homes is regulated, as is water, the internet, radio, TV, telephone, butter, milk and cheese. Why not the house itself? Do we believe that the right to a decent, affordable home is part of what it means to be human? We recognize that everyone has a right to basic education, adequate healthcare and support during our senior years. Why not decent affordable housing? In most instances when something gets too expensive, we buy less or do without. But when the rent gets too high for lower-income families, where do they go? Are they to be banished from the city? Child labour laws, the eight hour workday and worker safety rules all came about when we chose to put people ahead of profits. Lack of affordability exists because someone profits from it. We give people the right to make as much money as possible on housing. But in certain markets, that right for some denies the right to affordable shelter for others. In those places, it is time to limit the right to profit to protect people. Justice demands it.
Yet there is little support for regulating the housing market. Those who have a house don’t see speculation as a problem, so they come with other suggestions: build more social housing, increase income supports, raise the minimum wage, make rental vouchers universal, speed up re-zonings and new housing starts, create stiffer rent controls. We have heard it all and some efforts have been made, but in markets such as Toronto and Vancouver, keeping up is impossible. There is a more effective way. For example, France treats agricultural land as a communal good; private gain is clawed back. As a result, agricultural land near Paris has a market value one-tenth of agricultural reserve land outside Vancouver. It is entirely possible to give every family a decent home at affordable rates. Do we have the will? Are we attuned to being our brother’s keeper?
Taxing all unseemly profits out of housing strikes many, also Christians, as intrusive, an unacceptable limitation on the right to make money. It clashes with our idea of private ownership. And people like to see their homes appreciate in value, even though there is no benefit when all homes go up. Few people are on fire to make home ownership available to all. Will politicians make a move? Not likely! Canada-wide, 70 percent of all households are owners. Renters are a minority, easily pushed aside. (Here is an agenda item for social justice committees.) Politicians do not act because people do not demand it. Christian citizens should, because Jesus says if you don’t, you’ll be ranked with the goats (Matt. 25).
Challenge the status-quo
Christians can act. Twenty-five years ago an area church organized a non-profit housing society, donated part of its parking lot and built an apartment, and to this day five of the 26 suites are rented to seniors of limited income. Twenty-five years of affordable housing without a penny of government money. The most recent renters, he aged 88, a veteran, poor of health and she aged 74 faced eviction, their building slated for demolition. When they applied and learned their suite would be newer and roomier at less rent, their faces lit up but one worry remained: what if she was left alone? Imagine their joy when told she could stay with rent adjusted to income? Rising real estate values are an opportunity for churches to utilize their land and buildings for social housing. Increasingly more congregations are doing so.
Individuals can also act. For example, fellow church members recently helped life-time renters, just years from retirement, facing eviction and a rent increase wildly beyond their means. A few people pooled funds for a private mortgage at low interest to completely finance the purchase of a small apartment with payments at less than the rent. Now, another couple enjoys the security of home ownership made possible because a few people cared. Individuals can do for others what no bank or mortgage lender will.
A final example: 25 years ago a Christian couple purchased an apartment for a single parent. It provided rent at affordable rates and stability, no fear of eviction. Recently this couple made a gracious gesture with these words: “The mortgage is paid for; even our down payment is paid off and it is your rent that paid for it. We want you to have the apartment because something is not right. For all those years you paid, while we paid nothing. Why should we end up with a lot of equity, and you with nothing? Please take the keys. This place is rightfully yours!”
Why are such heart-warming examples rare, also among Christians? Don’t wait for government. We can all contribute inspirational stories. What is the story of your life?