housing in canada

Should Housing Be Commoditized In Canada?


8 minute read

September 12, 2018

Have you ever heard of “Competitive Eating?”

It’s a sport.

A sport, in the same way that chess is a sport, but a sport nonetheless.

This sport is no slouch, either.  The sport has competitions, it has fans, it has a league (“Major League Eating”), and it has a regulatory body – the International Federation of Competitive Eating, or IFCE.

You just haven’t lived until you’ve seen Joey Chestnut eat hot dogs on the fourth of July.

Not only is this event filmed and documented, but it’s broadcast live on TV.

Live on, say, on some random channel that nobody subscribes to?



Complete with commentators, analysis, and statistics on pace of eating.

Think I’m kidding?

Watch this – or at least part of it:


A few years back, probably six or seven if I’m guessing, I saw a “competitive eater” interviewed on a late show, Jay Leno, David Letterman, or one of the others.

The audience could barely take it seriously.

The late-night host couldn’t stop laughing.

Everything the guest said was just so outrageous, especially because he was the only one who seemed to be taking it seriously.

Finally, the host simply put his cards on the table, and made a point that was seemingly indisputable:

“This ‘sport’ makes no sense to me.  We have people literally starving all around the world, and you guys are up on a stage, jamming food in your faces, trying to eat as much as you can, even though you don’t need the food – all for sport and amusement?”

Wow.  No arguing that point, right?

Amazingly, the guest responded, very calmly, very eloquently, and said,

“The only thing in the world that might rival a food shortage is an energy shortage, specifically oil and gas.  But every Sunday, you’ve got hundreds of cars in Indy, NASCAR, Formula One, driving around and around in circles, wasting millions of dollars of gasoline, all for sport, and amusement.”


That guy was prepared!

And if the world was truly about efficiency, reducing waste, and supplying each and every human being with only that which they truly need, then neither competitive eating or auto racing would exist.

But the world isn’t like that.

It’s not within our genetic makeup.

Human beings are selfish by nature, and I believe that’s a trait that has evolved out of necessity, as we evolved from caveman and fought for survival.  Perhaps the selfishness has subsided over the last decade, century, or millennium, or, perhaps as the world has become more complicated, we’ve found new and improved ways to be more selfish.

Take your pick.

But in philosophical discussions about the fundamentals of capitalism, democracy, socialism, communism, et cetera, I’ve always maintained that true organic equality could never exist, because of the human nature that spawns desire, wants, self-preservation, and self-interest.

If a town of 100 people existed, and they all got along swimmingly, each contributing to the greater good, whether that’s paving roads, teaching children, or hunting/gathering, sooner or later, there’s at least one person that will want more.  And then either that person will want even more, or a second person will want more.  Or both.

That is human nature.

So is it really so unrealistic to expect that (gasp!) individuals across the world look at housing as an investment?

I’ve read multiple comments on my blog over the past couple of years about how housing should not be viewed as a commodity.

I’ve also seen this theme written about in major newspapers, and read about it in many, many letters to the editor, or op-ed’s.

Certain individuals in society would liken the purchase of housing as an investment, and a commodity, as a stab in the back to fellow mankind.  A house is for living in, not investing in.  A house is not a piece of gold, or an imaginary share certificate of a company, where hundreds of millions of other identical certificates exist.

A house is a home.

You don’t live in a share of stock, or a bar of gold.

I’ve even seen somebody, right here on this blog, compare the commoditization of housing to the illegal organ trade.

But even that trade can be debated, no?

I mean, are you not allowed to sell that which is yours?

Your kidney is yours, and nobody else’s.  Why can’t you sell it, if you so choose?

Now take that argument a step further: why is prostitution illegal?

Prostitution is the single-oldest industry on the planet.

Why is it illegal for a man or woman to use that which is theirs (body, mind, soul) for business purposes, specifically if a skill or other unique, valuable trait is used?

Personally, I believe that prostitution became illegal over time for two reasons: 1) the government is (or was at one time) the moral authority for every person in the state, who acts in the best interest of those people, and perhaps part of this decision stemmed from religion, 2) the act(s) generally go untaxed, and unregulated.

Morals change over time, and taxation evolves.

Prostitution is legal in many places in the world.

Marijuana is legal in Canada as of September.

I won’t be able to sell you my liver any time soon, but I believe part of the objection to a legal organ sale have to do with “fairness,” in that a poor person can’t afford $50,000 for a liver, and most governments do strive for equality.

So at the risk of this conversation becoming really weird, let me tie this all together.  There are many products or services which are illegal, many which are legal, and many that have been either/or, back-and-forth.  To some, the idea of housing as an investment is devilishly selfish, and to others, it’s common sense.

And as is often the case, when a product or service becomes more/less socially acceptable, the thoughts on the particular uses of that product or service change with public sentiment.

Until 2017, I had never heard anybody say, “Housing should not be allowed as an investment.  It should only be for living.”

But go back in time and tell a weary railroad worker in the 1880’s that one day, prostitution would be illegal, and he’s spit tobacco juice on your boot.

As real estate markets around the globe continue to get more expensive, and price more people out of the market completely, public sentiment surrounding housing as an investment will continue to shift.

In the same way that one would opine it’s unnecessary, selfish, greedy, immoral, and unnatural to waste oil and gas for a NASCAR race during a world energy crisis, or engage in gluttonous competitive eating when children are starving around the world, one might also believe that an individual in Toronto or Vancouver should not be able to own four condos as investments, when there is a housing crisis.

And do they make a bad point?

I spent Monday arguing “wants versus needs,” and nobody needs a second, third, or tenth investment property.  They want them.

As I said, it wasn’t until 2017 when I first heard of the idea of banning housing as a commodity.

I read this Globe & Mail article at the beginning of April, which was ironically right after that insane 3-month run-up in real estate prices:

“Housing Is A Human Right, Not A Commodity”

This was a special piece for the Globe, written by Leilani Farha, the UN Special Rapporteur on the right to adequate housing.

A couple of excerpts from the article:

Housing is now predominantly valued as a commodity, traded and sold on markets, promoted and invested in as a secure place to park unprecedented amounts of excess capital. The view of housing as a human dwelling, a place to raise families and thrive within a community, has largely been eroded. Despite its firm place in international human rights law, housing has lost its currency as a human right.

Ms. Farha refers to places like Toronto and Vancouver as “hedge cities,” and adds the following:

In hedge cities, housing prices have increased to levels that moderate- and low-income residents can barely afford. In the Greater Toronto Area, for example, in the last 30 years (1986 – 2016) housing prices have increased by 425 per cent, whereas in a similar 30-year period (1985 – 2015), average family income has only grown by 133 per cent. Housing prices have increased at three times the rate of income. No longer commensurate with household income levels, housing prices are driven instead by demand for high-end assets among global investors.

The closing statement is an emphatic one:

Whether it is taxation policy, land-use planning, zoning, or broader housing policy, decisions must be guided by the needs of residents for adequate, affordable and secure housing, as opposed to the financial security and gain of investors. Enjoyment of human rights would be the goal.

And so, what is presented as the private market gone mad is, in fact, something far more deliberate: the failure of governments to govern in a manner that is consistent with human rights. The solution requires a fundamental shift – one that prioritizes human interests over economic ones.

Right after this article was published, the Ontario government introduced their “Fair Housing Plan,” and the market cooled, then dropped.  The timing was rather ironic.

WIth the subsequent cooling of the market, does the idea of “housing as a human right, not as a commodity” lose momentum?  Do we only see merit in the idea if the market is red hot?

What if the market crashed across Canada, what then?  Would those in favour of the idea change their tune?  Is the idea only relevant when prices are high, and rising, and buyers are lamenting the market conditions?  What if it were the other way around, and sellers were complaining that there’s no market for their homes, and they only wished that somehow, people could buy houses and condos as an investment, not merely as a primary residence?

I suppose what I’m asking is: can the idea of “housing as a human right, not as a commodity” change over time, in the same way as public sentiment toward marijuana can?

Let’s not forget, we are less than two centuries removed from people as a commodity.  Sentiments change over time, no doubt.

Another argument for the idea of housing as a right, and not as a commodity, is that you can invest in the housing market without owning a house.  Some in the wealth management and financial services sector would actually argue it makes more sense to own a Real Estate Investment Trust.

Boardwalk REIT is a publicly traded trust that owns apartment buildings in Alberta, Saskatchewan, Ontario, and Quebec; almost 40,000 units of housing.  The company employs 1,300 people and was founded in 1984.

This REIT has risen approximately 25% in value in the past 12 months, and pays a 2% dividend annually.

There is no land transfer tax, real estate fees, or legal fees on the purchase/sale of this investment.  Just a $9.99 fee for trading ‘virtual real estate’ online, in seconds.

So would that satisfy society’s demand for “investing in real estate?”

Could the proponents of “housing as a right” argue this as a viable alternative?

I’ve asked many questions above, several for effect, some to get the juices flowing, and some, I suppose, to stir the pot.

I could probably be convinced, to some degree, that “housing as a commodity” is unfair, if comparisons were drawn to the change in societal views on other types of ownership (the aforementioned slavery as an example), but that would exist in theory only.

In practice, I would suggest that, “Real estate has served as an investment for some time, and I don’t see it changing, nor do I see a reason.”

And once, people thought the earth was flat…

I wouldn’t disagree that investors are partially responsible for appreciation in several of Canada’s real estate markets, but investors make up part of the demand pool.  And in any free market, I like seeing as little interference with respect to both supply and demand as possible.

As a proud Canadian, and at the risk of sounding like a populist, I can say that I firmly believe every Canadian should be afforded an advantage with regards to the purchase of housing as a residence, over those who reside internationally.  I won’t get into my thoughts on the foreign buyer’s tax, but I will say that Canada is not in the same league as other countries around the world, and thus our residents can’t play in the same game.  A dollar earned, and owned, by Mike from St. Catharines pales in comparison to that same dollar owned by somebody overseas, of another persuasion.

One might suggest that to restrict “real estate as an investment” to Canadians, fails to address “housing as a right, not as a commodity,” but I disagree.  It is, at the very least, a half-measure, which for many out there should be better than nothing.

I don’t agree with “housing as a right, not as a commodity.”

I never will.

But don’t be surprised to see this idea gain a lot of momentum in Toronto and Vancouver if our markets continue to rise, which I think they will.

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

Find Out More About David Read More Posts

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  1. A Grant

    at 8:55 am

    “Real estate has served as an investment for some time, and I don’t see it changing, nor do I see a reason.”

    I would disagree. The concept of real estate as an investment for the average person is a relatively new phenomenon that started in the early 1980s and peaked in 2008.

    Overall I have two issues with the concept of housing as an investment. First, as it is a new phenomenon, many millennials have been priced out of the market – while baby boomers who got into the market prior to the 1980s (and thus could realistically afford a house on a single income) call them “lazy” and “entitled” for their troubles.

    Secondly, we’ve effectively tied the majority of our economy to “housing as an investment” – a concept that looks dangerously like a pyramid scheme. For it to work, we are reliant on the infusion of foreign capital and strong/sustained population growth. The former is dangerous. The latter is slowing.

    I fear 2008 might have taught us nothing.

    1. Chris

      at 1:52 pm

      Good points, agreed. Perhaps the only point of dispute would be population growth. This has held relatively steady over recent years. Although the public backlash to increasing immigration seems to growing, so remains to be seen how this plays out.

  2. Joel

    at 8:56 am

    Housing is wealth preservation fro the middle and upper classes and will continue to be, the same as art is for the uber wealthy.

    We have social housing and that should not be a commodity the way prisoners in the US have been as it leads to the poor treatment and exploitation of people. Privately owned property will remain a tax free way to increase one’s wealth in Canada.

    For the sale of body part there is a great episode of The Traffickers on netflix that goes over this on both the social and economical aspects of buying or selling body parts.

    The foreign buyer investor is tough when looking at a capitalistic approach as many of the foreign buyers are coming from countries where there were a lot less restrictions on how you made your money. They certainly have an advantage over someone earning all of their money here. It is too hard to trace it all, but is worth a discussion on what is acceptable proceeds in order to invest here against someone who had to earn their money in a much more restricted market. Are we ok with allowing money from those who own sweatshops? Use child labour? Sell drugs?

  3. Geoff

    at 9:47 am

    I don’t think of home ownership as a right, either. (remember, the American founding fathers said life, liberty and the pursuit of happiness… not actual happiness). But I do think the government has a responsiblity to help individuals be homeowners, and as an example, offering transparent pricing history on real estate seems like a no brainer… and yet the TREB has fought this tooth and nail.

    1. Numberco Owner of Real Estate

      at 12:16 pm

      Agree with your last comment about TREB data, but disagree with home ownership. Gov’t should help individuals with access to housing, but whether that is rental or ownership is debatable.

  4. Carl

    at 10:16 am

    “Homes are a commodity” is not a law of nature. It is an arrangement that we have right now, encouraged by government policies and incentives. If its unintended consequences become bad enough, it will change.

    After his report on money laundering in B.C. casinos, Peter German is now investigating the same in B.C. real estate. Any bets if the new Ontario government will commission a similar report for Ontario?

    1. Numberco Owner of Real Estate

      at 12:15 pm

      Just like True-grope, Eby is governing by ideology. There are a number of questions regarding German, including how he sat on a board of a certain casino company alongside a senior executive that he could not interview for purposes of his casino ML report.

      I have always thought Eby is an ideologist, and this letter did nothing but strengthen my perception: https://www.straight.com/news/1099146/open-letter-attorney-general-david-eby-and-investigator-peter-german-bcs-dirty-money.

      1. Chris

        at 1:34 pm

        True-grope? Is that an attempted play on “Trudeau”? Somehow I doubt that one will catch on…

        The website you linked to keeps automatically redirecting to advertisements and pop ups. Makes it very difficult to read the letter. Do you have an alternative source?

  5. Libertarian

    at 10:18 am

    “I don’t agree with “housing as a right, not as a commodity.”
    I never will.
    But don’t be surprised to see this idea gain a lot of momentum in Toronto and Vancouver if our markets continue to rise, which I think they will.”

    Since we live in a democracy, if the majority of the people are priced out of the market and decide at election time to do something about it, then that is a legitimate change. I do believe that, as citizens, we have control over our society. After all, that’s how all the roads, hospitals, schools, libraries, etc., that we enjoy today were built. Citizens and government decided to build those.

    To be put it even more bluntly, things change, ALL THE TIME. And as such, we are allowed to adapt to those changes. People hate change and it can be unfair, but the majority is allowed to change things it feels are no longer serving society’s interests.

  6. Carl

    at 10:26 am

    And on another topic, the Teranet/NB house price index for August is out today.
    Toronto: m/m +0.8%, ytd +3.66%, y/y -4.01%

  7. Jackie

    at 10:36 am

    Civil and social unrest all over the world and through out history has been caused by restricted access to land/property ownership. South Africa, Palestine, Ireland, Zimbabwe for example. Many times this restricted access is enabled by governments rules and regulations. I think any city or country that does not look at regularly review how polices impact the majority of it residents access to property or how those policies are enforced is asking for trouble. Specifically I’m thinking of CMHC insurance, foreign income not being declared on tax returns even though it’s required, condos being rented out 100% airbnb/short-term not taxed as commericial properties but condos part of hotel rental pool are.

    1. Numberco Owner of Real Estate

      at 12:13 pm

      Just saying: not declaring foreign income is sometimes illegal, but sometimes legal. It all depends on the circumstances. Income taxes and the issue of tax residency are a complex area of law, and it is nowhere as simple as reading about it in MSM or a CRA Folio.

  8. Kyle

    at 11:31 am

    I think there are a few things that need to be addressed:

    1. People were investing in real estate long before there was a “housing crisis”. Much of this notion of eliminating real estate investment presumes that it is what causes unaffordability, when there is zero evidence that eliminating real estate investment will bring prices down.

    2. When things are commoditized they become cheaper because they encourage investment in increasing supply. If oil wasn’t a commodity (i.e. everybody has a right to whatever oil is available, kind of like with water), then no one would drill for it and it would be much scarcer and more expensive. The problem with housing isn’t that it’s being commoditized, the problem with housing is that supply can’t easily be increased to bring down prices, mostly because of Government bloackages (high development charges, long approvals, antiquated zoning, complex rules, rent controls, NIMBYs). If they eliminated those blockages to adding more supply, then Investors would create more supply instead of competing for the limited existing supply, this is the REAL answer to solving the “crisis”.

    3. Investing in real estate for a return is no more selfish and greedy, then people lobbying against others in order to get something they want but can’t afford.

    1. Numberco Owner of Real Estate

      at 12:12 pm

      I completely agree, Kyle. In fact, I would say that an investor is less selfish because the appreciation angle is often not attached with the hope of pricing others out, while those hoping for a crash inevitably want to crash the equity of others.

      Real estate has always been an asset class, just like cash, stock, bonds, art, wine, etc.. I remember the days of the dot com bubble, and after that crash, people thought real estate was “safer”. Where was the outcry then? I do not remember anyone complaining back then.

      1. Kyle

        at 2:00 pm

        Good point about the dot com bubble. Also in places where real estate prices have crashed, investors have been viewed as the saviours. That’s why countries like Spain and Portugal have Golden Visa programs, where they literally give away PR and EU Citizenships to those who purchase properties above a certain amount.

        Market cycles will happen, if you exclude investors from participating when prices are rising, they likely won’t be around to save your economy when prices are falling.

    2. Chris

      at 1:46 pm

      I disagree with point one, and would reference John Pasalis’ research on investment activity and price appreciation as evidence, as well as the subsequent decline in areas where this activity was highest. Certainly this isn’t the sole cause of unaffordability, but I would argue it does have an impact.

      I disagree with point two, and would reference the Ryerson City Building Institute and Josh Gordon’s research on supply, population growth, and demand as evidence. I agree that more supply would be welcome and would aid in affordability, but I don’t believe this to be the sole cause of today’s pricing.

      You and I have discussed these two sources ad nauseum, and I believe I know your position on them both; you disagree with the authors and their findings, for a multitude of reasons that, again, we have already debated. So I have little appetite to rehash things previously said. Suffice it to say that, as usual, we hold opposing views. And there is no clear path to proving which one of us is right or wrong.

      1. Kyle

        at 3:31 pm

        John Pasalis’ research focuses in on just one type of investor. Someone who bought and hopes to sell for more.

        There are many different types of investors. Many of which arguably increase affordability, people who do infills (e.g. buy one 50′ lot and build two semis) , Developers who build new supply, People who add rental units to homes, people who bear some of the risk from Developers to get new projects started so that new supply gets delivered, people who bank land to enable new projects to get built, etc.

        1. Chris

          at 6:58 pm

          Not quite. Pasalis’ research identified homes that were purchased and then quickly re-listed for lease through the MLS. This was used as his measure for investor activity, as opposed to homes purchased for residing in.

          You are absolutely correct, this is far from a full accounting of all types of investors in real estate.

          However, the relationship between Pasalis’ measure of investor activity and price appreciation, then subsequent depreciation, is stark.

          Here is a quick snapshot of his research, as referenced by the Bank of Canada in their 2018 Financial Systems Review:


          Note that this is the second occasion in quick succession that our central bank has included Pasalis’ research in this document.

  9. Condodweller

    at 12:20 pm

    Wow, another deep subject I don’t have time to properly address.

    First off, the debate on whether or not buying a home is an investment. According to Investopedia’s definition, an investment is: “An investment is an asset or item acquired with the goal of generating income or appreciation.” By this definition, a home is absolutely an investment. Show me one homeowner who is not expecting their house value to appreciate over time. Especially in today’s market.

    It gets a bit murky with their next sentence: “In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.”

    One might argue that a homeowner who lives in their home is “consuming” their home. I would disagree as I view living in a home as utilizing it, not consuming it. Consuming means you won’t have a home to sell at the end (land value notwithstanding but let’s not get into the weeds). I think of living in a home as having an investment that pays a dividend except instead of cash, the dividend is my rent if you will. This should end the “you can’t live in an investment” debate. If you disagree with this then you must also believe that a dividend paying stock is not an investment because you use the dividend to pay for your annual vacation.

    Sorry but I feel the need to point out a couple inaccuracies in this blog:
    “you can invest in the housing market without owning a house.” I know what you mean however you still own the real estate through the reit.

    “why is prostitution illegal?” I think the most compelling reason is to stop the exploitation of vulnerable women. Unfortunately, it doesn’t seem to work so perhaps it should be revisited like marijuana. It just may be better for society if it was regulated/supervised/taxed.

    1. David Fleming

      at 1:36 pm

      @ Condodweller

      Yeah, I got deep this week.

      Both these topics have been on my mind for a while, and they’re somewhat related.

      I think Friday’s blog will literally be photos of me eating a sandwich…

      1. Condodweller

        at 10:22 pm

        You are going to leave us hanging with this one?

        “Let’s not forget, we are less than two centuries removed from people as a commodity.”

  10. Marmota

    at 1:43 pm

    A tweet I just read seems very appropriate:

    “Foreclosure/eviction are human rights. You cannot be a socialist without supporting these. So many economically precarious people depend on the revenue streams from their investment properties”

  11. steve

    at 3:19 pm

    Hmmmm … if housing is a right, then who would “own” all the properties?
    The government? In the name of fairness, would they all be the same? Public housing anyone? That worked out really well, no?

  12. Roman

    at 5:41 pm

    “And in any free market, I like seeing as little interference with respect to both supply and demand as possible.”
    Can we go back and see when an issue of “housing as a right, not as a commodity” started to play in a mind of an average Canadian? I don’t remember any of it in 2002, 2005, 2009 or 2012! It is all started in the last 4-5 years. ‘Coincidentally”, we had no interference from our Central Bank in lowering prime interest rate that stimulated many local investors, we had no interference from Revenue Canada that says that dollar earned in wages is treated differently than a dollar earned flipping houses, we had no help from foreign governments pegging their currencies to a fixed US dollar exchange rate and using these foreign currency’s strengths to buy our real estate when Can dollar depreciated 25%-30% in the last 5 years. These are all examples of non-interference on a demand side. I could provide another 5-6 examples on a supply side too but the best example of supply non-interference would be municipal zoning laws that are not allowing builders to buy a block of low-rise houses and erect an apartment building or condo. No, no one is interfering with a market!
    Someone would argue that these are all examples of exogenous factors and there is nothing we could do about them. I do not agree with that but let’s just accept it. Does it mean that we should not protect ourselves from rain, heat, snow, etc? Because these are all exogenous factors too. It is a naive to think that a concept of free market exists. Markets are always manipulated by government or quasi-government agencies. So why not to manipulate a housing/development market too so that a basic unit of housing (rent or mortgage on one bedroom apartment or condo) is affordable on an average salary in the city?

  13. Carl

    at 9:41 pm

    “Human beings are selfish by nature, and I believe that’s a trait that has evolved out of necessity, as we evolved from caveman and fought for survival.”

    A nice attempt to justify greed, one of the seven deadly sins. Looking forward to future favorable treatment of the other six.

    In fact, early humans survived in groups, not as lone individuals. The groups formed by unselfish members had the evolutionary advantage.

  14. B

    at 7:01 am

    Couldn’t bring myself to click on this article in my blog reader until now. Just reading it gave me heart palpitations.
    We’ve come to a point where anything that anytime someone is unhappy about whatever state of affairs, that person is quick to decry to the world that his/her human rights have been violated, or they were the victim of classism, racism, discrimination, disability etc etc.
    The even sadder thing is that by spewing propaganda like “housing in big cities is a human right”, it undermines what human rights truly are.

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