Housing Lab Report

Financialization and Housing: A social innovation approach to a better housing system

Can social innovation help tackle the housing crisis?

The report “Financialization and Housing: A Social Innovation approach to a better housing system” outlines a new, “all-hands-on-deck” approach with possible pathways for innovative solutions.

The concept of financialization of housing has been used increasingly to describe certain trends affecting housing affordability in Canada, but remains ambiguous.

By bringing together the perspectives of different actors within the housing system, this report provides a common framework to understand this complex issue and lay the groundwork for cross-sectoral collaboration. While the bulk of existing research on this issue has been conducted in an academic context, our work is intended to support all actors within the housing system in their ability to make sense of financialization trends and form generative partnerships. 

This document summarizes the outcomes of extensive interviews conducted with participants from sectors including government, real estate, financial institutions, affordable housing and nonprofits, as well as a comprehensive literature review of policy and academic documents, and historical datasets.

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A social innovation approach allows for the creation of solutions to complex problems that neither the government, the market or civil society are able to solve alone.

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What we found

We identified a number of macro trends in the housing market affecting housing affordability and security of tenure, including rising house prices, falling interest rates, mortgage securitization, long-term decline in purpose-built rentals and social housing, and the rise of retail and institutional investors in rental markets.

By looking at the interplay between those factors, we were able to gain a clearer understanding of how changes in the housing market affect housing affordability, preventing an increasing number of people in Canada from accessing safe and affordable homes. Among them, lone-parent households, visible minorities, Indigenous peoples, those with long-term disabilities and low-income families are disproportionately impacted by these changes.

Unlocking levers of change

We also identified potential levers for solutions for those most in need of affordable housing including innovative ownership models such as shared equity, co-housing and community land trusts; innovative financial models, products and services geared towards affordable housing; and greater alignment between municipal, provincial and federal programs with affordable housing developers and providers, investors and financial institutions to facilitate the creation of affordable housing units.

Those levers and others will be explored as part of the next phase of our project, during which selected participants will identify viable solutions focusing on people in core housing need or on the margins of core housing need, prototype solutions, and create a roadmap for implementation and scaling. This prototyping phase will launch in December 2021 and continue through the winter and spring.

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We're tackling the housing puzzle with social innovation