Do you remember Jennifer Keesmat?
There’s a name that, for quite some time, all Torontonians would have known.
Where is she now? She seems to have faded away, and maybe that’s a benefit to she and her family. After all, she did nothing but take sh!t from the City of Toronto and its residents for five years as Chief City Planner.
Although my political views might differ from Jennifer Keesmat’s, I have a tremendous amount of respect for her, for two reasons:
1) The role of “Chief City Planner” is a role that should probably be divided among an entire group of people, and she did it on her own. It’s a role in which nobody will ever succeed, or recieve praise.
2) She ran for Mayor in 2018 against John Tory, even though she had no chance. There’s no more tragic irony in a democratic society where a person runs, unopposed, in an election, whether it’s for President of a country, or captain of the grade nine girls’ volleyball team. Somebody needed to run against John Tory, and Ms. Keesmat steppted up. And before you chime in here, no, Faith Goldy didn’t count.
Our discussion on Friday about the former CEO of the CMHC, Evan Siddall, and his comments about the pitfalls of home ownership morphed into a conversation about the bigger picture: politics, planning, zoning, density, infrastructure, and then, as a by-product, how and where we live, and raise families.
Rather than moving on to a new subject today, I’d be remiss if I didn’t bring in another perspective on this subject.
Back in the summer of 2019, you might have missed this special feature that Jennifer Keesmat wrote for the Globe & Mail:
I bookmarked this, but didn’t give it the platform it deserves.
The first half-dozen comments from Globe & Mail readers are all panning Ms. Keesmat, and I would probably disagree with much of what she’s written, but just because a perspective is different from mine doesn’t mean I’m going to suppress it. Because, that would be like…………..oh…..I dunno……..college campuses in 2020?
What Ms. Keesmat wrote in her piece echoes some of the thoughts that Evan Siddall had on the topic of home ownership, except Ms. Keesmat put it far more eloquently, and backed it up with explanations. Her ideas are also similar to what many of you TRB readers commented on Friday’s blog, so I figured today is the perfect time to share.
“To Create Affordable Housing, Let’s Banish The Hoary Myths Of Home Ownership”
Special To The Globe & Mail
July 26, 2019
For years, Canadians have watched our cities climb the wrong kinds of global lists – the ones ranking the most expensive cities in the world to live in. Our fears have only been fuelled by our daily experiences: people bounced from rental to rental because of landlords’ or investors’ bottom-line desires. We’ve worried that even rental housing has grown out of the realm of affordable housing.
None of that is particularly new. But last week, the Canadian Centre for Policy Alternatives provided evidence backing up those fears: in most major cities in Canada, there are no neighbourhoods where a minimum-wage worker could comfortably afford an average-priced one-bedroom apartment.
We need more housing in Canada, and we could easily have more high-quality, affordable rental homes – but the way our cities are planned strongly suggests we simply don’t want more. We haven’t valued renting as a housing choice, and so governments have under-built rental housing in Canada through policy frameworks that both echo and reinforce our belief that housing ownership is better than rental housing.
But that is largely because of a series of pervasive, foundational myths underpinning our approach to housing. Undoing them will be a critical first step toward fixing our housing system, and ensuring everyone has access to housing choice.
The first myth is that housing is a free-market system – that renting requires government intervention, but ownership is powered by individual efforts and bootstraps.
In actuality, our housing market is highly regulated, and the oft-overlooked reality is that the market only exists because of government regulation. The foundation of home ownership for the majority of Canadians – access to lending – is controlled by governments. Through tools such as interest rates to facilitate borrowing, the “stress test” for uninsured potential home buyers, and the First Time Home Buyer Incentive program, the government controls the levers of the housing market.
This myth is reinforced by criticisms of government policies that facilitate the rental market as undue interference in the market – and the connotations we’ve erected around rent control, which seeks to mitigate undue rent increases by limiting them, typically on an annual basis and by a specific percentage point, often linked to the rate of inflation. Yet, it’s strange we never refer to the problems of “mortgage control.”
There’s another myth that infuses our policy and city-planning: that renting is transitional housing, or the poor cousin to home ownership. That stems from the alluring but largely debunked idea that ownership is always a good way to accrue wealth. This might be true for a portion of the population that purchased a home at the right time, in the right neighbourhoods, at the right price, with favourable financing – that’s a lot of qualifiers. But an idyllic and well-timed life – no divorce, the ability to comfortably hold your house for decades, ideally since the middle of the last century, following the postwar boom when supply was abundant – is the exception. For the vast majority of Canadians, these circumstances did not, and will not, exist.
In fact, owning can have higher unrecoverable costs, such as taxes, maintenance and the cost of capital, than renting. And yet in the emotional process of purchasing a home, we often underplay those costs, and fail to undertake rigorous analysis that will verify the assumptions that underlie our thinking. Too frequently, the biggest purchase of our lifetime is undertaken on the strength of faith that wealth accumulation is likely and possible.
Finally, there’s another myth that drives people to strive for ownership, even if it creates a precarious financial situation for the household: the entirely understandable desire for stability.
But Germany offers a counterpoint. For a variety of complex reasons, including the legacy of the Second World War, the country has one of the lowest home-ownership rates in the Western world at just more than 51 per cent in 2017. But it also has one of the highest rates of satisfaction with housing, at 93 per cent. That’s because of a significant part of the German experiment: Most people live in rental housing, and it has been purpose-built as rental housing: high-quality, well-designed and well-maintained housing in excellent neighbourhoods that you can rent for your lifetime, and without a huge impetus to move unless you choose to do so, including limits on unreasonable rent increases. In the Canadian context, the lack of such purpose-built rental has allowed condos owned by investors to fill the rental-housing gap, which is fundamentally unstable.
Yes, there are good policies in Canada that offer solutions that look past these myths. What if we saved the best sites in the best places in our cities for high-quality rental housing, and zoned them specifically for renting, as British Columbia has recently allowed? What if we prioritized making rental a highly desirable first choice, by design, by providing more construction loan-financing for purpose-built rental, as Canada Mortgage and Housing Corp. has recently introduced?
But too often, the failures we see in our housing market are by design. An absence of strong policy to ensure an accessible rental-housing market has felt like a policy in and of itself. The oft-affirmed notion that home ownership is an excellent way to accrue wealth is at odds with our desire, as a society, to easily access stable, high-quality, affordable housing. And with home ownership more and more unattainable for more and more people, policymakers and thought leaders need to stop promoting ownership to those who cannot afford it, and instead reorient our housing market toward high-quality rental homes.
We’ve made this mess through public policy. It’s only through policy that we can fix it. But first, we need to dispel the myths that have turned this mess into a tangled knot – because stories and faith alone don’t solve a crisis.
Ms. Keesmat, according to her Wikipedia page, “lives in a detached red-brick house near Yonge & Eglinton.”
Does that make her thoughts on affordable housing any less relevant?
If one’s lifestyle significantly contradicts their political convictions, can we still take their political views and favoured legislation at face value?
This is commonly referred to as “champagne socialism,” and while I’m not looking to label or fling mud, I do think hypocrisy has to be taken into consideration at least at some level. I’m quite confident, given Evan Siddall’s previous employment in the investment banking industry, that he owns a lovely home, and perhaps several others. So when he climbs up on his soap-box to talk down to the masses about housing, I will admit, I do discount what he says because of the absurd contradiction.
What then do we make of Ms. Keesmat’s piece above?
Well, I agree with some points, disagree with others, and yet remain intrigued by some.
Here are a few points of note:
“For years, Canadians have watched our cities climb the wrong kinds of global lists – the ones ranking the most expensive cities in the world to live in.”
This is the point she chooses for her introduction, which I think can go either way.
Some of the “most expensive cities to live in” are also some of the most popular, most famous, and home to exceptional job markets and business hubs. If Toronto was not an expensive city in which to live, that would come with more negatives than positives. It would likely mean that significant industries have failed, jobs have been transferred out, net migration is wildly negative as people the city in droves – and on that note, ask yourself, “What makes people flee a city?” Nothing good, of course.
Detroit was an expensive city in which to live in the 1950’s when the automotive industry was booming, and times for residents were great, but that city has imploded, crime is rampant, and houses are essentially free in many areas. Do we want Toronto to become Detroit?
“There’s another myth that infuses our policy and city-planning: that renting is transitional housing, or the poor cousin to home ownership.”
I agree with this point, as do many of the readers.
Not everybody is meant to own a home. Whether it’s because of affordability, lifestyle, personal financial decisions, life cycle, et al, we can’t suggest that home ownership is the right vehicle for everybody.
“Rent shaming” is a new phenomenon that’s worth exploring in another post.
By and large, most renters in Toronto would prefer to own. But there are cities across the world where people rent by choice. Canada has become more obsessed with home ownership than most places on earth.
“In the Canadian context, the lack of such purpose-built rental has allowed condos owned by investors to fill the rental-housing gap, which is fundamentally unstable.”
Agreed, to some extent.
I agree that this is true – that condos owned by investors have filled the rental housing gap. I also agree that it’s unsustainable.
But I don’t agree that the government is going to come to the rescue, simply because they can’t. I also wouldn’t look back in hindsight and suggest that the government “should” have seen Toronto in 2020 coming, and that they should have started building rentals in the 1960’s. I mean, that would have been great. But governments aren’t forward-focused. How can they be, when today’s policies are what motivates voters? If elected terms for city councillors were for thirty years, then yes, I would have expected some foresight. But alas, I’ve come to learn that politics is about self-interest and self-preservation. Moving on…
“What if we saved the best sites in the best places in our cities for high-quality rental housing, and zoned them specifically for renting, as British Columbia has recently allowed?”
And what if we didn’t age? What if it never got cold outside? What if our favourite sports team won ALL THE TIME?
This is fantasy.
And “as British Columbia has recently allowed” needs some follow-up, because I’m willing to bet the story she’s selling doesn’t match with whatever went down.
“The best places in our cities” are expensive. Is the government going to expropriate every privately-owned site?
This point by Ms. Keesmat is so wildly fantastic that it undermines her entire story.
“What if we prioritized making rental a highly desirable first choice, by design, by providing more construction loan-financing for purpose-built rental, as Canada Mortgage and Housing Corp. has recently introduced?”
With all due respect to Ms. Keesmat, this is more fantasy and wishful thinking. Starting a point with “what if” isn’t going to lead anywhere.
“What if………we had ice cream for dinner instead of vegetables?” asked the five-year-old child.
The bread crumbs don’t lead anywhere here, unfortunately.
From “what if” to “prioritized” to “making” and then to “desirable.”
Those dot’s don’t connect. You can’t make something desirable in the way that she describes.
Can I make myself desirable to my wife? Sure, maybe. But can I make myself desirable to Megan Markle? What would I have to do?
What would the CMHC have to do, from a construction loan financing standpoint, to make the construction of rental housing more desirable than the construction of condominium housing? Maybe give out free loans? Sure, but that’s just giving money to developers, which is coming from taxpayers, so you’re not really “making” anything here. You’re just re-purposing tax dollars to rental housing, so if you want to do that, then say so.
I’m curious to hear your collective thoughts.
Maybe this is just an extension of our Friday conversation, or maybe Ms. Keesmat’s article brought some new insights into the fold.
But one thing’s for certain: the topic of affordable housing will never go away in this city, and that means by association, neither will the home-ownership debate…Back To Top Back To Comments