BC Housing reboot: there’s a lot of catching up to do

Image: BC Housing

BC HOUSING CORPORATION is suffering growing pains and no wonder. After years of neglect in building affordable housing, there ís a lot of catching up to do.

The provincial housing agency’s budget has increased 140 per cent from five years ago to $2 billion. It ís expected to rise to $7 billion in the next decade.

I’m not surprised that BC Housing would require review but the shakeup was dramatic. The government fired the entire board after an independent probe of BC Housing uncovered serious problems.

Not only was the board fired. The CEO of BC Housing, Shayne Ramsay, announced his retirement in a rambling statement. “I no longer have confidence I can solve the complex problems facing us at BC Housing,” he said.

Ramsay added that he’s been watching with growing alarm at violence perpetrated against homeless people. He said “something shifted” for him in May as he watched police converge on a Downtown Eastside park where a man lay fatally stabbed, an incident that occurred just minutes after Ramsay had left the area while walking his dog.

The independent probe by Ernst & Young found the agency had grown exceptionally fast and was handing out multimillion-dollar contracts without rigorous review and no clear documentation for why some contracts were awarded.

Included in the top 10 funding projects in 2021 were Coast Foundation ($10-million); Pacifica Housing ($9.4-million); Affordable Housing ($9.1-million); ASK Wellness of Kamloops ($7.8-Million); and More Than a Roof ($7.5-million).

The probe found two programs in particular as being notable for unclear documentation or criteria for awarding contracts. While the review did not name one of them specifically, Atira is the largest provider of those programs.

The executive directors at Atira were earning substantial wages considering that they are non-profit society.

An investigation by the Globe and Mail found that, according to 2021 Revenue Canada reports, Atira’s top-paid executive was making in the $200,000-to-$250,000 range, while the next two highest-paid staff were in the $160,000-to-$200,000 range.

It’s no accident that there is a shortage of affordable housing. The shortage of affordable rental units is the result of deliberate government policy starting with the Mulroney Conservatives in the 1990s and carried on with the Liberals.

Governments stopped investment in affordable rental units for a number of reasons: strong wage growth from 1996 to 2006 coupled with declining interest rates and modest housing prices enticed more renters into home ownership.

That period also saw a shift in politics in which government off-loaded the building of affordable housing to the private sector.

However, all that changed by the mid-2000s. Stagnant wages and the growth of low paying jobs along with escalating housing prices pushed people out of home ownership and into rentals.

A half-century ago, governments got housing built. The mid-1990s austerity ended all that. Since then, the private sector has failed to meet the needs of low to moderate income earners.

There’s a lot of catching up to do and BC Housing needs to refocus to the task. B.C.’s premier-apparent, David Eby, is determined to get affordable housing done right. His board replacements are competent former deputy ministers and bureaucrats with financial expertise.

It’s time to get B.C.’s housing in order.

Advertisement

Housing affordability has improved for wealthy, worsened for low-income

With the soaring cost of housing, you wouldn’t think anyone could be further ahead. But for the wealthy, that’s the case.

image: phys.org

That’s what Professor Yushu Zhu of Simon Fraser University found in study of statistics from 1981 to 2016.

Professor Zhu’s study confirmed the obvious: the cost of housing has risen steadily for most people. It’s been especially hard on renters who saw the percentage of income spent on rent rise from 35 to 42 per cent.

However, for high income earners, the percentage of income spent on housing has actually dropped.

While current statistics aren’t available, things are obviously worse for middle and low income families.

For the wealthy, not so much. Even though housing costs have gone up, so has the wealth of Canada’s billionaires according to the Canadian Centre of Policy Alternatives. Economist Alex Hemingway found that 47 Canadian billionaires now control $270 billion in total wealth at the same time that 5.5 million At the same time, Canadian workers lost their jobs or had more than half of their hours cut during the pandemic.

It’s no accident that there is a shortage of affordable housing.

The shortage of affordable rental units is the result of deliberate government policy starting with the Mulroney Conservatives in the 1990s.

Governments stopped investment in affordable rental units for a number of reasons: strong wage growth from 1996 to 2006 coupled with declining interest rates and modest housing prices enticed more renters into home ownership.

That period also saw a shift in politics in which government off-loaded the building of affordable housing to the private sector.

And the bundling of mortgages into securities meant that housing became part of the stock market. Mortgages were billed as low-risk financial instruments such as mortgage-backed securities, a process called commodification. The Great Recession of 2008 was a consequence of these market-driven neoliberal beliefs says Professor Zhu:

 “Driven by the neoliberal belief in the superiority of the free market, the housing policy in Canada has shifted from a welfare-oriented policy to a market-oriented one over the past four decades, encouraging homeownership, deregulation and private consumption. Housing financialization, the transformation of housing from a human right to an investment opportunity, has been driven by the federal government primarily through financial market deregulation and a financial practice called mortgage securitization.”

But by the mid-2000s, stagnant wages and the growth of low paying jobs along with escalating housing prices pushed people into rentals.

It doesn’t have to be that way. Economist Alex Hemingway says:

“A range of policy tools are available to rein in extreme inequality while simultaneously raising revenue for sustained, long-term public investment in much-needed areas after the pandemic such as seniors and child care, affordable housing and climate change,” he adds.

One policy to help achieve more equality is a wealth tax on the super rich.

We all pay for homelessness. Policing and health care cost more.

The private sector has failed to meet the housing needs of Canadians.