HANSARD: Jenny advocates to stop the financialization of housing

House of Commons Debate
Housing
Adjournment Proceedings
May 31st, 2022 / 7:15 p.m.

 

Jenny Kwan (NDP) Vancouver East, BC

"Madam Speaker, Canada is faced with a housing crisis and we have to address this issue, which in no small part was a result of the federal Liberal government walking away from the national housing program in 1993. Soon after that, we saw the financialization of the housing market take root. This is when corporations and wealthy investors make big money by putting people out of homes. They buy up rental housing units, often older buildings, renovict everyone and jack up the rent. This is what the financialization of housing means, and it has to stop.

REITs alone have grown from owning zero residential units in apartment buildings in 1996 to nearly 200,000 in the year 2020. In total, the largest 25 financial landlords held about 330,000 suites last year, which is nearly 20% of the country's private purpose-built stock of rental apartments. According to researcher Steve Pomeroy, for every one affordable housing unit created by government funding, 15 become unaffordable due to the financialization of rental housing.

Right here in Ottawa, we are seeing 300 tenants at Manor Village be renovicted by their corporate landlord. The fallout is on the residents, who find themselves without a home. A senior named Peggy has lived there for 30 years. She is a fixed-income senior. People like Peggy are at the mercy of huge corporations and wealthy investors who are fuelling the housing crisis. Rich investors should not be allowed to buy up affordable rental units, force existing tenants out of their homes and jack up the rent to unaffordable levels.

Canadians need the government to fix the mess it helped to create. The reality is that, left unchecked, the government cannot possibly build affordable housing units as fast as wealthy investors can buy them, hike up the prices and use the housing market to make money off of Canadians. For decades, Liberals and Conservatives have created a rigged system where wealthy investors profit and Canadians pay the price.

That is why the NDP is calling on the government to take immediate action to stop corporate landlords and REITs from treating our housing market like a stock market. New Democrats are calling on the government to stop the financialization of housing by putting in place a moratorium on the acquisition of affordable homes by REITs and other corporate landlords. We are also calling on the Liberals to put in place an acquisition fund to allow non-profits or land trust organizations to purchase rental buildings when they come on the market.

Changes must be made on how REITs are taxed, as well. The government is essentially giving massive tax breaks to wealthy investors: seven of the largest apartment-owning REITs in Canada have saved a combined $1.5 billion through federal tax loopholes. The government must close these loopholes.

Amendments should be made to the Income Tax Act to require landlords to disclose in their tax filings the rent they received pre- and post-renovations and to pay a proportional surtax if the rent is excessive. Attacking the Bank of Canada, as the Conservative leader front-runner wants to do, is not going to fix the financialization of the housing crisis. A meagre foreign-owner tax will not do it either, but a moratorium on purchases—"

 

The Assistant Deputy Speaker (Mrs. Alexandra Mendès) (Liberal) Alexandra Mendes

"The hon. Parliamentary Secretary to the Minister of Housing and Diversity and Inclusion."

 

Soraya Martinez Ferrada (Liberal) Parliamentary Secretary to the Minister of Housing and Diversity and Inclusion (Housing)

"Madam Speaker, I want to thank my colleague from Vancouver East for her advocacy on affordable housing. This is an issue of great concern for our government, so I am glad to have the opportunity to explain how we are addressing it through our 10-year and over $72-billion national housing strategy.

This plan is creating housing to suit every need in Canada, from shelter and transitional housing to community housing to market rentals, and is helping to keep the dream of home ownership within reach of young families. Most of this strategy's program focuses on our most vulnerable populations. This includes the rapid housing initiative, which is already creating over 10,000 deeply affordable units for the most vulnerable. This includes 88 new units opened in the member's city of Vancouver in March, thanks to a $30-million federal investment.

We are not stopping there. Through budget 2022, we are extending the RHI to create an additional 6,000 units. At the same time, we also need to address the issue of housing affordability for middle-income Canadians. In many of our cities, the people who work hard to keep communities running can no longer afford to live in them. Many teachers, nurses, store clerks and construction workers find it impossible to live, work and make ends meet in their urban centres. Even smaller cities and towns outside major urban hubs are seeing costs rise as more and more families leave the big cities. This is unacceptable. It threatens the well-being of middle-class citizens and their families.

The rental construction financing initiative that my colleague mentioned helps those who do not qualify for assisted housing but still cannot afford the escalating prices of market rent. It encourages a stable supply of rental housing for middle-class families in expensive housing markets. This includes many of the people who are essential workers and who have played an invaluable role in our communities, especially throughout the COVID-19 pandemic.

The program provides low-cost construction loans for 10-year terms. This gives developers stable, predictable funding in the early stages of development. In my colleague's riding of Vancouver East, it has created more than 400 units of rental housing, all near public transit, workplaces and community services.

However, we recognize there is more to do to improve affordability. That is why, through budget 2022, we announced that the RCFI will target a goal of having at least 40% of the units it supports provide rent equal to or lower than 80% of the average market rent in local communities going forward.

We will not rest until we ensure that every Canadian has a safe and affordable place to call home."

 

Jenny Kwan (NDP) Vancouver East, BC

"Madam Speaker, in question period on March 21, I asked the government why 90% of the funding under the rental construction financing initiative went to for-profit developers and why the units being built often ended up being 30% to 120% above the average market rent. I called on the government to change the requirements to ensure that housing units built under this program are substantially below market rent, and reforms were included in the agreement the NDP entered into with the Liberals.

I am glad the confidence and supply agreement has significantly reformed the RCFI, including changing the eligibility for the program to under 80% of average market rent and allowing for loans to be forgiven when rent is below this minimum threshold. The change also includes an increase in the percentage of units per building that need to meet that criteria, from 20% to 40%. By way of comparison, let us say no changes were made. Rent based on the Liberals' affordability definition under the old RCFI was $2,294 in Vancouver per month. Under the new agreement—"

 

Soraya Martinez Ferrada (Liberal) Hochelaga, QC

"Madam Speaker, our government is fully committed to making housing more affordable for Canadians, whatever their housing needs. While our focus is on the most vulnerable populations, Canadians can count on us to be there to support the middle-class families that are working hard to keep our cities running. This is what builds inclusive, resilient communities where everyone has a chance to thrive.

I encourage all members of the House to work with their communities to make the most of the national housing strategy and all the programs it has to offer, as well as the over $4 billion we are investing in housing through budget 2022."

 

https://openparliament.ca/debates/2022/5/31/jenny-kwan-1/

Constituent Resources
Mobile Offices
Contact Jenny

Sign up for updates

Connect with Jenny