Disrupting the ‘Housing Crisis’ Narrative

As a devout housing advocate, I’ve used the term housing crisis many times in the last several years. But in The Tenant Class, author Ricardo Tranjan makes a compelling case that the housing crisis…is a myth.

Tranjan, a political economist and senior researcher with the Canadian Centre for Policy Alternatives, points out that crises are “infrequent, surprising, and widely undesirable.” 

“In contrast, Canada’s ‘housing crisis’ is a permanent state of affairs that harms people in, or in need of, rental housing; roughly one-third of the country’s households.” Homeowning households see their homes rise in value much faster than other investment options, while landlords, real estate investment firms, and developers see healthy profits. Banks make lots of money from mortgages, too. 

“A housing system that serves all but one group is not in a state of crisis; it is one based on structural inequality and economic exploitation.” 

Like Canada’s labour laws and norms, our housing system allows exploitation in the sense that it is entirely legal and socially acceptable for “some people to enrich on the backs of others. … Laws, institutions like landlord and tenant boards, and moral standards permit and legitimize wealth accumulation through rent collection.”

If this were a real crisis, government intervention would be expected. Instead, “government actions in recent years include partial cancellation of rent controls, wage freezes, the use of excessive force in the clearing of homeless encampments, the fast-tracking of evictions through virtual hearings, and the failure to protect people living in multi-tenant housing. … The purpose of the rental market is not to ensure the highest possible number of families is securely housed. The purpose of the rental market is to extract income from tenants, and as far as this goal is concerned, it works like a charm!”

Are you getting mad yet?

Because this only brings us to page 5 of The Tenant Class.

And I probably would have left it that and just said read the book, but then I participated in an affordable housing advisory committee meeting where I suggested that the problem wasn’t 100% residential supply and so our recommendations should include protections for renters. I was summarily dismissed, which really pissed me off, so I put on some angry girl band music and went for a walk around the block, came and sat back down, and made this list:

• Approximately half of tenants in Canada live in purpose-built rentals in the private rental market (not social housing): 22% small businesses, 20% corporations, 8% financial landlords (REITs, pension funds, etc). 
  • Small businesses, often called “mom and pop” landlords, own apartment buildings that are 44 units on average (151 in Toronto). In Toronto, small business landlords collected nearly $3M in rent for each average-sized building in 2021. They hold assets worth millions of dollars that increase in value fast. 
  • Corporations and financial landlords are first responsible to their shareholders to produce a profit and have resources, lawyers, and political influence that makes holding them accountable very difficult. From Leilani Farha’s report to the UN General Assembly in 2017: “Housing and commercial real estate have become the commodity of choice for corporate finance, and the pace at which financial corporations and funds are taking over housing and real estate in many cities is staggering.” Or as Ricardo Tranjan writes, “Invest in a loosely regulated sector, extract excess profit from working families, accumulate large amounts of capital - repeat.”
• Characterizing landlords as families whose financial security is on par with their tenants is misleading. Painting landlords as struggling to pay their mortgages helps build a positive image for the real estate industry, but a family that owns multiple homes is wealthy. If they decide that the investment property is not generating enough monthly income, they can sell it without compromising their own housing. But tenants who miss rent have likely already skipped meals and sacrificed other basic needs to try to pay rent. The landlord is accumulating wealth and has two or more homes to choose from, while the tenant is at risk of being homeless. About 38% of tenants live in private market rentals that were not built to be rented (ie condos, single-family homes, townhouses, duplexes) but are rented out by individuals and families who have purchased them as investments. 
• An example that was brought up in the advisory committee consultation: Private landlords who “lose $300 a month” because the rent doesn't cover all of the costs of financing their investment property now that interest rates have increased. Any measures to control rent put these “mom and pop” landlords in financial peril. But the truth is that they are not losing money at all. If a $500,000 house appreciates in value by 3% in a year ($15,000) then it costs that landlord $3600 to increase their wealth by $15,000, and that $3600 is a tax write-off. Unless an uninsured house burns to the ground, it is an asset that appreciates. It is never a matter of if it will be profitable but of when. 
• Meanwhile, a 2016 study published in the Journal of Urban Affairs found that for every $100-a-month increase in median rents, across several jurisdictions, homelessness increased between 15 and 39 percent.
• We do not have a right to home ownership in Canada, nor do we have a right to realize monthly profits on our investments. We do, however, have a right to housing. For a third of Canadians and growing, that means renting. While acknowledging the human right to housing does not create housing quickly, it provides a very useful filter for setting priorities for our affordable housing plan. 

Words Matter
Tranjan notes that how we talk about the issue shapes our ideas about what the response should be. 

The mainstream narrative that the housing crisis is a supply problem and the corresponding recommendations to make it cheap and easy for developers to build whatever they want, wherever they want - that benefits investors and developers. The people who have the power are shaping the narrative. 

And the mainstream narrative that most tenants are students or don’t work, and that tenants are mostly homeowners-in-waiting mischaracterizes who rents in Canada, and it is simply not supported by data. Tenants are as likely to work as homeowners; they just get paid less. And ninety-six percent of tenants surveyed in a study that Tranjan cites had no intention of owning a home in the near future, either by choice or due to the cost.

Disrupting Harmful Narratives
As advocates and organizers, how can we insert some alternate narratives into this conversation? Here are a few suggestions I’ve pulled from the book:

• Try replacing “housing crisis” with “exploitative housing market” and see how that lands with your audiences. Be ready for some pushback, but you might just change the conversation! (I especially like this one because it aligns with Anat Shenker Osorio’s reminder that people do things, and our language should reflect that.)
• Rents don’t “go up.” Landlords raise rents. Period. “What renders rental units ‘unaffordable’ are landlords who charge too much for them and governments that allow it to happen.” The term “affordability” masks the profit-making aspect of the housing market.
• Challenge the idea that landlords who can’t live off the monthly profits from renting their properties are somehow losing money. They still own an appreciating asset. If renting isn’t worth it to them, they can sell the building and reinvest elsewhere, just like anyone who decides to adjust their investment portfolio. They don’t need our sympathy.

I’ll give Tranjan the final word: “Every effort matters. Every abusive rent increase represents not only a landlord trying to squeeze money from a tenant but the landlord class appropriating income from working-class families, income that increases their wealth and influence, consolidating their ability to extract yet more income from yet more tenants. By the same token, every rent increase dropped, every stopped eviction, every repair completed, and every political win against landlords is a historic victory for the tenant class.”

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