(Image Credit: Sergey Filippov at pexels.com; the image is at this link. Used without modification under Creative Commons Licence).
The term ‘housing crisis’ is usually understood in the context of home ownership – with a slight nod of acknowledgement to renters. But there are other demographics where the housing crisis is as acute – if not more so.
One of the great advances in scientific knowledge in the 20th century was the ‘Uncertainty Principle’ by German Physicist Werner Heisenberg. In simple terms, it states that there is a trade-off between how much we know about a sub-atomic particle’s position on one hand and its speed on the other. The more you know about one, the less you know about the other. Ever since I was introduced to the Uncertainty Principle, I have believed that it can be applied to many areas of day-to-say life as well. This is because of the basic trade-off between the availability of resources (including time, energy etc.) and their alternative uses. The more attention we give to one area, the less we can give to other areas. Such trade-offs are unavoidable at times, however, unless we are careful, we may end up making unwise trade-offs.
I believe that this is happening on the front of the much talked-about housing crisis. From my understanding, this is the result of something that I trace to the early part of the 21st century. Before the crash of 2008 and the Great Recession that ensued, one of the buzzwords was ‘ownership society’. It meant that more and more people would own – or strive to own – houses and assorted financial assets. Naturally, this brings the owners of houses and financial assets – and the challenges / reverses that they face – in greater focus, at the expense of the attention given to the less fortunate.
To be fair to the media and others, however, it must be said that there is a good deal of attention – maybe not enough, but certainly not insubstantial – paid to the homeless. This demographic is at the other end of the spectrum of prosperity. In between the two, there are two distinct demographics that languish in obscurity. Their challenges are substantial, and if a society is sensitive to the welfare of each individual member, their plight should be of concern to everyone.
Recently, a couple of good friends made me aware of the challenges faced by these two demographics, and the facts are concerning indeed. The first group consists of people who need financial assistance for being able to afford a place to rent, while the challenges facing those in the second group are the result of regulatory failure of the government in the wake of dubious business decisions by insurers.
LEFT IN LIMBO
(Note: The information and subject expertise for this demographic were provided by my Twitter friend @RE_MarketWatch, who has worked with vulnerable people for a decade and half. The data she provided pertains to Toronto. I am using it as an illustrative example of a nationwide problem. I must note that some of the data is a bit dated.)
According to the data on the website of the City of Toronto, as at the end of Q3 of 2022, there were 81,042 applications for subsidized housing on their waiting list. As at the end of Q4 of 2021, this number stood at 78,879 (see this link). This means that in a span of 9 months, the waiting list for subsidized housing grew by 2,163 applications, or about 2.75%. Compared to 2019, when the number was 75,191, the increase in the waiting list is of 5,851 applications, or about 7.8% over 33 months. A 2019 report by Social Planning Toronto (funded by United Way Greater Toronto and the City of Toronto) states that in the preceding decade, the wait list for social housing had grown by 51.9%. One special category consists of people who not only need social housing but also support-systems on account of their disability. Over the decade preceding the report, the wait list for supportive housing had nearly quadrupled, growing to 3.8 times the size, i.e., 380% (Page 7 of the Report).
As far back as 2016 (i.e., much before the mad run up in hosing prices / rents AND before the economic hardships caused by Covid lockdowns & restrictions), over 23% of the renters were paying more than 50% of their income on shelter (Page 11 of the Report). It is possible that some of these renters have joined the waiting list for social housing in light of the developments since 2016.
One would think that the City Council would be ‘seized of the matter’ and working aggressively to resolve this worsening crisis, but one would be wrong if one did indeed think that. Between 2010 and 2019, the number of affordable rental units added to the supply was a meager 4,093. With a waiting list of 80,000 for social housing, the city of Toronto is creating new supply of social housing units at the rate of 400 per year. By simple math, it would take 200 years to catch up with the backlog – by which time, many more tens of thousands of people would have been added to the waiting list. In other words, this problem is not only perpetual but also perpetually growing – but hardly finds any mention, if at all it does, in the discussion about the ‘housing crisis’.
On the other side of this social housing crisis, there are administrative inefficiencies further reducing supply. For example, this report in the Toronto Star in October 2019 talks about the auditor general’s finding that “the city doesn’t know if people getting rent subsidies are actually eligible’. An earlier report, from June 2019, is about the auditor general’s finding that about 1,400 of Toronto’s subsidized housing units were sitting empty each day. That report also said that only 56% of the households on the waiting list for social housing were ‘eligible and active’. In other words, there is a great deal of confusion about who is in need of social housing and who is just trying their luck to make a financial gain. And regardless of who deserves this support and who doesn’t, the machinery to address this need by adding to the supply is ‘moving at a pace that would be regarded as unduly slow in a community of snails’. More frequent discussion of this in the public sphere – including in the media – is essential to fulfilling this need of our less fortunate fellow-Canadians.
FORSAKEN & FORGOTTEN
(Note: The information in this section was provided by an affected individual who wishes to remain anonymous. I trust this individual enough to make this information part of my article.)
A friend of mine lives in western Canada. A couple of years ago, his house suffered damage to the roof due to a severe wind-storm. He made an insurance claim with his insurer. The company dragged its feet initially, then sent in what my friend called ‘Kijiji contractors’ who didn’t do a good job of fixing his roof. A year dragged by while he kept complaining to his insurer, then there was a wildfire in which the roof of his house was nearly destroyed. Some time after his second claim was lodged, the insurer company was sold to another company. That second company also dragged its feet; in the meantime, my friend discovered that the time limit to take the matter to court had expired. It is unclear if this was the result of basic incompetence on the part of the lawyer who was representing him with the company or something else.
Over the period of two+ years, the cost estimate for the repairs to the roof and other adjacent parts of the house has ballooned from $200,000 to $800,000. The house would be worth $1.5 million if it were in an undamaged condition. The anniversary for renewing the insurance on the house is nearing, and the (new) insurance company has conveyed that it will be unable to keep the insurance in place in view of the damaged condition of the house, unmindful of the fact that the condition of the house is what it is because the company itself hasn’t honoured its obligation to have the damage fixed. Without a property insurance in place, the mortgage company would call in the mortgage. The outstanding amount on the mortgage is beyond my friend’s ability to pay off. In a nutshell, my friend faces the prospect of losing his home after paying the mortgage for many years, and through no fault of his own.
I wouldn’t be writing about this if it was an isolated case. But my friend tells me that there are about 90 homeowners in the area who are facing the same predicament. This leads me to wonder how many Canadians are in similar circumstances nationwide. Unfortunately, there is no way of knowing their total number, largely because local media has been decimated – almost obliterated – in recent years. In a nutshell, this is a tragedy that keeps happening all the time without us knowing about it.
What is happening with these (former) homeowners? Much of their financial net worth was tied up in their house. Once that is wiped out, it would be difficult for anyone to get back on their feet. Their mortgage having been foreclosed would have dented their credit score in a big way, so I can envisage the difficulties that they would face in finding a place to rent. This sad situation reminds me of a popular expression in India: ‘Karod-pati se road-pati’ (From being a millionaire to living on the streets).
For the past two decades – and especially in the last 5 years or so – home ownership became the primary engine of generating personal wealth in Canada. Why this happened and what we can do to redress this imbalance is a separate discussion, but my emphasis here is on the fact that as a result, our public discussion about housing has also mostly centered around home ownership and the challenges that homeowners (whether current of would-be) face. As I said in the inro to this article, we do give token acknowledgement to renters in our discussions about the housing crisis – but that discussion largely ignores the two specific demographics that I have talked about here. We have started viewing homes essentially as ‘investments’, but the reality is that they are places where we live. Having a location where we can anchor our lives makes us unique among all the species. In other words, homes are what make us human. In a prosperous G7 country like Canada, the least we can do is to think about those of our compatriots who are struggling to maintain their humanity. Hopefully, we will even have some solutions after all that thinking is done.
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