Is better access to property ownership the magic bullet for Montreals
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 LInstitut 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 dont have access to [ownership of] property. Thats 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
Desrochers contended that Montreal and Quebec need more rental properties
available to tenants, rather than more tenants who become property-owners.
I dont believe that its 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 Montreals Services
de lHabitation, 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 daction 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
shouldnt 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 Desrochers 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
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 wont fund public transport to help
them out. Similarly, there are excluded people who wont 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
He pointed out that we tend to have a narrow understanding of the concept
of affordable housing. It doesnt 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.