Canada is facing a housing crisis with no end in sight. 

The numbers are grim. The latest statistics show more than 1.6 million households in Canada, mostly renters, do not have affordable or adequate housing; we can only assume this has increased with the Covid 19 Pandemic. Lone-parent households, visible minorities, Indigenous peoples and people with long-term disabilities are suffering the worst of it. Those who can find affordable rentals have shared that they are in constant fear of eviction. With housing prices rising by more than 30 per cent in the last two years, the goal of homeownership is increasingly out of reach for all but a few. 

Why is this happening?

Housing provides a home, shelter, safety, and comfort necessary for individuals and families to thrive. It’s essential for social and economic wellbeing. And it’s also one of the most powerful drivers of our economy. A changing real estate market impacted by low interest rates, high construction costs and aging buildings have all contributed to making it harder for families to find homes that meet their needs.

One trend we’ve been paying particular attention to is what former United Nations Special Rapporteur on adequate housing Leilani Farha calls the “financialization of housing,” which we define very generally as “the application of financial instruments by institutions and investors in local residential housing markets.” 

While owning a home has long been used as a way for Canadians to achieve financial stability and generate income, the market has shifted in recent years. We have seen mortgage rates fall, housing prices rise, changes to government policy, and shifting global markets. The change most often associated with the financialization of housing was the creation of new financial instruments like Real Estate Investment Trusts (REITs) that make it easier for investors to buy and sell real estate. That’s why it’s more and more common to see properties being purchased by corporations, whose shareholders expect to see a return on their investment.

What we’ve learned

The housing system is like a puzzle. Each piece―renters and owners, developers, investors, financiers and policymakers―can affect it. While the government plays an important role, notably through its National Housing Strategy, we need all the pieces to come together to complete the puzzle. 

As a national organization, we can play a unique role in convening different actors around the table―actors who may not be typically used to working together. For the last 18 months we have been working on the discovery phase of a lab with CSI and MaRS and with the support of the CMHC to understand how the financialization of housing is impacting housing affordability. 

We spoke to developers and funders, non-profit housing providers, housing advocates, REITs, tenants, owners and policy makers. They each had very different beliefs and views about housing, and different ideas on how to solve the problem. Yet all of them said they’re facing barriers to creating a more equitable housing system―whether it’s building more affordable homes, protecting tenants from unlawful evictions, or easing the path to homeownership. 

Our research allowed us to spot some levers of change―areas where innovation is possible and can influence the whole system. Some of them involve creating new financial instruments to fund the construction of affordable or below-market housing. Others point to areas where existing solutions could be improved, such as increased data collection on rental markets to better protect tenants’ rights. There is also a greater role to play for non-profit or mission-oriented housing providers (the full details of our research will be available in our report, to be released this Fall.)

What’s next ?

We’ll be exploring those and other ideas for change during the second phase of this project. Over the next year, affordable housing will continue to be one of the thematic areas of focus for SI Canada. We’ll begin the prototyping phase of the lab to identify and develop collaborative solutions that can have real impact on housing affordability. We’re also hoping to open the conversation to the social innovation community so that we can all build our capacity to have a meaningful role in making the housing system more just and equitable.

For this, we need your help. Tell us more about how you’d like to get involved by filling out this short form. Your answers will help us understand the best way to move this conversation forward.

We look forward to tackling this puzzle together.