Opinion: British Columbia needs to end the commodification of housing

Condominium tower under construction in downtown Vancouver. (Ian Ius/Daily Hive)

Written for Daily Hive Urbanized by Sonia Furstenau, who is the leader of the BC Greens Party and the MLA for the riding of Cowichan Valley.

My vision for housing in British Columbia is for everyone to have a safe, affordable, secure home to live in, and where housing is close to transportation, community infrastructure, and green space. It’s possible to make this vision a reality; we know this is true because history and other jurisdictions prove that it is.

To meaningfully address the housing crisis, the BC NDP government must stop relying on the current for-profit approach to building housing. Under this approach, lower-income people are struggling to find housing they can afford, the vacancy rate remains low — which has created conditions of scarcity that drive rental costs up — and the housing crisis deepens.

It’s time for a new approach. It’s time for the government to fund and build more non-market housing.

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The case for non-market housing

Non-market housing exists to provide a home, not to turn a profit. It can take the shape of co-op housing, government-subsidized housing, or non-profit operated housing — but the main thing is that rents are not a means of generating profit for shareholders but a method for covering operating costs for the housing community.

The province should be supporting co-operatives and non-profit organizations that seek to develop housing — in particular, housing that provides support for youth setting out on their own, housing for single parents, and housing for low-income earners and the elderly.

Research finds that non-profit rental housing could deliver substantially lower monthly rents than those provided by the for-profit sector. More non-market housing does not just provide affordable housing for people, but it also helps moderate prices across the market.

The problem with building non-market housing is that developers aren’t keen on investing the upfront development costs because they know they won’t turn large profits. That’s why it’s imperative that the government take the lead to deliver the human right and public good of housing. For a successful example, we can look to Vienna, Austria, where 60% of the population, regardless of their income, lives in non-market housing that the municipal government helped build. The proportion of accessible non-market housing in Vienna moderates private rents in the city, keeping prices — and affordability — stable.

The social and economic benefits of addressing the housing crisis must not be overlooked. Non-market housing helps provide the conditions to create security, belonging, and a sense of home. As we continue to experience wave after wave of crises — the COVID-19 pandemic, mental health issues, climate crisis and unaffordability — making sure people have access to long-term, affordable housing can help communities better weather these storms.

The commodification of housing in BC

To manage the housing crisis, all levels of government must tackle the supply-side issue and build more affordable homes.

However, if we do not address the ongoing financialization of housing, more apartments will become vulnerable to corporations purchasing units as investments through Real Estate Investment Trusts (REITs).

REITs and other investors are taking advantage of low vacancy rates across BC to turn a profit. They do so by purchasing apartments and renting them out at high rates. REITs have grown substantially in Canada, from owning zero apartment suites in 1996 to nearly 200,000 in 2021, and financial firms now hold between 20% to 30% of the country’s purpose-built rental housing stock.

BC is in a housing crisis largely because we treat housing as a commodity, an investment, a way to make money — rather than a human right.

The provincial government is guilty of this too: By the end of this fiscal year, the province expects to receive $2.5 billion from the property transfer tax. It has a financial stake in housing prices going up.

The provincial government is overly reliant on housing revenue to display a healthy economy, but the economy isn’t healthy if it’s not working for the majority of people and businesses. It’s time for the government to stop relying on the revenue from real estate transactions and instead ensure that public money is financing non-market housing solutions.

Despite the government’s housing announcements and programs over the years, I continue to hear how countless British Columbians are struggling to keep up. This is largely because the BC NDP government is unwilling to take the bold, progressive steps that other jurisdictions around the world are taking.

In November the new premier David Eby introduced two pieces of legislation on housing. While any efforts to address the housing crisis are welcome, this new legislation does not address the challenges faced by low-income renters, the unhoused, and other folks impacted by the housing crisis. Eby has stated that he believes housing is a human right. To live up to this, his government must commit to fund and build non-market affordable housing.

It’s time for a clear vision for affordable housing in this province and urgent action to get there.

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