John W. Warnock

Housing and Urban Development in Saskatchewan | The Neo-liberal Agenda Includes the Privatization of Housing | The Result Is a Crisis in Housing for Low Income Canadians

Housing and Development in the Era of the Free Market and Free Trade

 

Housing has become a serious problem in Regina and across Saskatchewan. In just four years the market price of houses more than doubled, rising far faster than family incomes. Over the past ten years virtually no middle class apartments have been built, as builders and investors get higher returns building condominiums. When a condominium is built and sold, investors immediately make their profit. Furthermore, since 1992 the federal government has all but stopped building social housing for low income Canadians. Provinces and municipalities simply do not have the capital resources available to meet the housing need.


The squeeze on the poor in Saskatchewan began while we had NDP governments. Those in the lowest income brackets have been the hardest hit by the lack of rental accommodations and the rise in rents. Native housing, both on and off reserve, is in crisis, characterized by inadequate supply and serious overcrowding.


Many studies in Canada, including those done by the Federation of Canadian Municipalities, demonstrate that good, safe, affordable housing is a necessary precondition to having a productive and satisfactory life. Some even consider it to be a basic human right! When rents take more than 30% of a household’s income, there is less available for other necessities. Thus the steady rise of food banks and their use.


Social assistance rates and allowances for housing vary according to location, family size, employment and disability. For those on social assistance in Regina and across Saskatchewan, in all but a very few cases, actual rent paid tp landlords accounts for more than 50% of their total allowance. With the average rent for a one-bedroom apartment in Regina now (2015) between $800 and $1000 per month, housing is very un-|affordable. A great many low income people are forced to allocate 70% to 80% of their income just for housing. This is unacceptable.

 

Emphasizing private housing for those on low income: the rent supplement


The basic formula for the "rent supplement" paid to private landlords was set by Lorne Calvert’s NDP government (2002 - 2008). Provincial government social assistance was to provide 75% of the housing allowance with the other 25% coming from the rent supplement program. The provincial rent supplement program required an inspection of the private housing, and often it has been deemed to be sub standard and the rent supplement is denied. But given the very tight rental market, the social assistance recipient will still have to occupy the housing. Thus, the low income family is forced to take the hit – not the landlord! The City of Regina and the Regina City Council have refused requests from advocacy groups to licence rental housing and create and enforce basic standards.


Most people on social assistance in Saskatchewan have some sort of disability. Many lone parent mothers cannot find affordable child care and thus cannot take on full time work. For these people social housing is most often the best solution. However, the number of social housing units available in Saskatchewan has been steadily declining, being sold off or “privatized” by the housing administrations. for those in desperate need of affordable housing, it is very common for there to be a two year waiting list for social housing.

 

The privatization of social housing   

In 1941 the Canadian government created Wartime Housing Ltd., a Crown corporation later renamed CMHC. Its task was to create affordable housing, including building social housing for low income people. In 1973 CMHC was mandated to assist the development of non-profit and co-operative housing, the “third sector,” for those with moderate incomes. We have some very good examples of this housing in Saskatchewan.


A radical change came in the early 1990s when Jean Chretien’s Liberal government ordered CMHC to stop funding social housing, even for First Nations. In 1996 Paul Martin, then the Minister of Finance, announced that the new goal of the Liberal government was the devolution of the responsibility for social housing to the provinces.


The template agreement was signed with Roy Romanow’s NDP government in February 1997. All existing social housing would be shifted to the province, and federal support for existing social housing would be limited to the 1995-6 budget. All future social housing would be built by the provinces.


This agreement was denounced by most provincial governments and a wide range of community advocacy groups across Canada. The Ottawa-Saskatchewan deal allowed the federal government to escape its historic responsibility to guarantee housing for the poor and the disabled.


The model adopted in Canada came from Great Britain, the United States, and several other advanced capitalist countries. Governments would get out of the business of planning and providing for low income housing. Housing would become a personal responsibility, and the supply would be provided by the private sector. For those unable to find adequate housing in the private sector at their level of income, governments would provide rent supplements.


This neoliberal alternative was warmly embraced by Saskatchewan's NDP government. Instead of building good social housing, the provincial government would now subsidize private landlords to provide an alternative service. The result was predictable, and the experience of Regina followed the pattern.

 

New capitalist entrepreneurs bought up the cheapest housing, in the most run down inner city neighbourhoods, and rented the houses and apartments to those on social assistance. They had a captive market and a guaranteed income from the government. Rent payments were to go directly to the landlords. Of course, the landlords also indirectly received the rent supplements. Social housing now meant using taxpayers’ money, provided primarily  by working people on wages and salaries, to help landlords accumulate capital. It was a classic case of reverse Robin Hood.

 

Housing in the era of neoliberalism


It is important to recognize that the cruel developments in Saskatchewan are not unique. The election of Margaret Thatcher’s government in Great Britain in 1979 and Ronald Reagan’s administration in 1980 began the process of dismantling the welfare state that had been established after World War II. The goal was to re-establish the old pre-democratic liberal order, where property ruled and government social services were virtually non-existent. This would allow governments to significantly cut taxes on corporations, the wealthy and those in the higher income brackets. The enemy was the organized working class and their “excessive demands” for greater democracy and equality.


In the face of this attack, the working class did its best to fight back. But they were sabotaged by their social democratic parties. Beginning with the Labour governments in Australia (1983) and New Zealand (1984), social democratic parties and governments embraced the conservative neoliberal agenda. All across the advanced capitalist countries, governments rolled back the commitment to providing good affordable housing for those at the bottom of the economic order. As Margaret Thatcher once remarked, her greatest success as Prime Minister was to transform the Labour Party into another conservative party. We know this only too well in Saskatchewan.

 

John W. Warnock is a Regina political economist and was author with Della MacNeill of The Disappearance of Affordable Housing in Regina, published by the Council on Social Development Regina in 2000.


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