by Sylvain Comeau

Is better access to property ownership the magic bullet for Montreal’s ongoing housing crisis? Panelists debating that question at a student-organized debate on Feb. 4 failed to agree on many aspects of the thorny problem, including the cause.

Pierre Desrochers, research director of L’Institut économique de Montréal, an economic think tank, argued that popular myths about housing are muddying the issue.

“One myth is that the housing crisis is caused by poverty, households who don’t have access to [ownership of] property. That’s false; in fact, the economy has improved and incomes are up by 12 per cent. The number of people on social assistance has dipped. Thus, Montrealers are in much better financial shape than five or six years ago.”

The real problem “is that the demand for housing has gone up, but the supply has not kept pace.” He said that supply bottleneck was caused largely by well-intentioned government restrictions on rental property owners that have fallen prey to the law of unintended consequences.

“These regulations are intended to protect tenants, but have had the perverse result of discouraging people from investing in real estate. Even today, the vast majority of landlords in Quebec are small investors, and many small investors prefer to place their money in more lucrative investments.”

Desrochers contended that Montreal and Quebec need more rental properties available to tenants, rather than more tenants who become property-owners.

“I don’t believe that it’s a good idea to give people a boost to help them have access to property. For people in a precarious financial situation, that can easily cause problems if they lose their job or have other financial struggles.”

Government programs to help people gain access to property ownership was one of the solutions presented during Montreal public consultations on housing in June 2002. Martin Wexler, a manager at Montreal’s Services de l’Habitation, explained why the city of Montreal is in favor of such home ownership programs.

“The percentage of home owners in Montreal is low: 36 per cent on the island of Montreal versus 50 per cent for the region. For the province of Quebec, 58 per cent are homeowners. In addition, there continues to be urban sprawl; people are moving out of the city, often to become home owners, and promoting home ownership for modest-income families would, in turn, liberate rental apartments.”

Wexler described property ownership programs as part of “a multipronged approach the city is adopting to respond to the scarcity of rental housing.” These include the construction of 5,000 social housing units, subsidized private-sector rental housing at market or below-market rents, and renovation and revitalization programs for existing housing.

Wexler said that about eight per cent of the 2003 municipal housing budget is earmarked for aid to aspiring homeowners, while the rest will be spent on social housing and revitalization.

While the former commands only a small per cent of the total budget, “it is not just a response to the lack of rental housing, but is considered a wealth-creation tool. That is because home ownership promotes financial security, better control of housing costs, forced savings and asset appreciation. In the case of rental unit ownership, it provides an income stream.”

Wexler noted that home ownership programs have been launched in the past, and a key component is always loaning families the amount of the down payment. “Generally, coming up with the down payment is the big problem for first-time homeowners, so we provide that for them up front.”

François Saillant, co-ordinator of the activist housing organization FRAPRU (Front d’action populaire en réaménagement urbain) called for more social housing, arguing that “access to property is not a panacea. Thanks to low interest rates, those who have the money shouldn’t have any problems. But there are many people who will never be able to afford their own home, no matter what you do for them; the median income in Quebec is $21,000.”

Saillant strongly disagreed with Desrocher’s contention that Montrealers today are richer. He suggested that Desrocher man the phones at FRAPRU for a while as a test of that belief.

“Today, 19 per cent of renters in Montreal are paying 60 per cent of their income for their rent. People on welfare and social assistance are poorer than ever because of cuts in their cheques, and there are more single-parent households.”

The final word went to Daniel Gill, a visiting professor of urban studies at the Université de Montréal. He drew an analogy between housing and transportation, another basic need of city-dwellers, many of whom cannot afford cars.

“No one is saying that we won’t fund public transport to help them out. Similarly, there are excluded people who won’t be able to afford property without help. Helping someone have access to property is like helping them sell their used car so that someone else can buy it.”

He pointed out that we tend to have a narrow understanding of the concept of affordable housing. “It doesn’t mean just cheaper rents; in many countries, it also means access to property.”

The panel discussion was organized by students from the School of Community and Public Affairs.