When looking at what could be done to improve housing, it’s helpful to revisit past efforts. This examination can offer valuable insights into potential policy recommendations, some of which may involve repackaging previously attempted policies from years ago.
During the 1970s Canada underwent a significant shift in housing policy orientation. The shift entailed a substantial increase in government involvement in the housing sector, and reduced involvement in the private rental sector. At the same time, housing policy began to serve as a means for income distribution. This shift in policy coincided with the emerging view that housing was not merely a commodity but a fundamental right.
Prior to the 1970s, the federal government’s housing focus primarily revolved around programs operating through capital markets, rather than direct intervention through government ownership or assistance to low-income groups.
This policy shift across all government levels created a wholesale transformation in approach from supporting and enhancing the market system to direct intervention and regulation. Following the shift, federal and provincial housing policies took the form of:
- rental assistance and cash grants to home buyers
- rent controls
- construction or subsidization of new dwellings for low-income households
- changes to landlord and tenant legislation
Other policy changes from federal and provincial levels of government included:
- new tax legislation and regulations
- control on foreign investments and land speculation
- anti-inflation regulations
At the municipal level, housing policies focused on:
- height limitations
- down zoning (changing the zoning regulations of an area from a more dense land use to a less dense land use)
- building freezes
The policies implemented during the 1970s resulted in several long-term trends that have continued over the past fifty to sixty years. Notably, these trends include:
- stimulating demand for homeownership
- discouraging the private purpose built rental, and
- replacing private rental housing with public or non-profit rental housing for low-income households
Today – sixty years later – we face a scenario where there’s a shortage of housing, home prices are unaffordable for many, and the regulatory system at the provincial and municipal levels discourages new development. Several of the proposed policy solutions currently under discussion are calling for policies that were tried in the 1970s.
According to CMHC, the housing crisis is too extensive for the federal government to resolve alone; it demands a collaborative effort from all stakeholders. A key item lacking in the policy framework is an investor segment that was prominent before the policy shift of the 1970s—small investors.
1 The note draws extensively from the monograph “Anatomy of Crisis: Canadian Housing Policies in the Seventies” by Lawrence B. Smith
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