Op-Ed created by Will Lenssen, Sales Representative®, Homelife Power Realty Inc, Brokerage® Mar 7, 2019
Note: The opinions and positions here are the sole personal expressed opinion and perspective of the author and in no way represent the views of his Brokerage® or his local, provincial, or federal associations or affiliates.
What is “home” defined as? For one, it is a place owned. For another, it is a place rented. For some, it is a transient location that changes that lacks the traditional idea of a home. For the purposes of this article, “housing” includes any shelter owned or rented and excludes anything less. Home or a shelter is identified with a protective “container” and basic amenities that may include an energy source, furniture, some amenities such as a food, and a water source and waste site. These are all dependent numerous, sometimes complex, situations of the owner/renter.
When the term “affordable housing” is mentioned and broadly taken, this term could be misunderstood as “housing affordability”. They are quite different and yet for many of us, both apply, and both are intimately woven together.
A) Housing affordability applies to the condition or state of the consumer or the person – the “buyer/renter” – and what that buyer/renter can afford to buy. It applies to anyone who wants to buy a home using their present means based on the economy and the housing market. This term applies to those who gauge the home they buy or rent based on their existing terms. It is you and me. This term also includes the homeless: those who are destitute to put a roof over their heads.
B) Affordable housing on the other hand, applies to the supply and/or cost of the product or the home – the “residence” – and thereby affects the “buyer/renter”. It is often associated with low-income persons/families and calls for providing government-subsidized housing. The state of the product affects those who want to buy based on the supply and/or price of homes available. This supply and/or cost affects all buyers, but notably those who are “without” means to buy or rent.
Even though each term means something different, rarely can these terms be clearly separated. Or I should say that each term FOCUSES on something different. This is important to the consumer: that reporters and politicians get the terms straight so that we know what each is addressing.
The best scenario to address both terms is that the buyer/renter’s income and savings should allow anyone to buy/rent a “residence” and “residences” should be within reach of most consumers. In other words, the demand of residences should be affordable. It is hopeful that each person can get access to finances to “get a place” they can afford. In such discussions on affordability and affordable, we often forget those who cannot “get a place” regardless of the balance of the income to the home price. These persons are “house poor” and need serious assistance to “put a roof over their heads”. It is the humane thing to do this by those who can.
Let us look at various governmental involvements to help address housing affordability. Whatever intervention is in place, government intervention and compliance will apply. Some intervention options include the following:
* tax payers pay while the government agency(-ies) manage and operate the sites such as shelters and multiple-unit buildings (subsidized housing) and/or
* private groups like churches assist with volunteers to manage and assist and/or
* municipal zoning by-laws require changes such as low-priced and multiple unit housing and/or
* financial requirements such as mortgage rates be adjusted to allow more buyers to afford a basic home and/or
* financial requirements and landlord profiles be adjusted to allow for an accessible rental payment and/or
* builders/owners assist with the availability by building less expensive and more residences and/or
* a combination of some or all the above
For the latter group, local shelters are part of the plan. An example of that is Hope House in Guelph, ON. To say the least, offering housing to all is overly complex.
So, who is listening?
As for affordable housing, an article titled “Affordable Housing: Five Things the Government Can Do” by Stuart Thomson, Feb. 24, 2019 for the National Post suggests some options. Thomson cites that with a fall election coming this fall, the government could be waiting to see if affordable housing can be a campaign issue. But I think this title may be misleading. Why? The article addresses housing affordability (the buyer), not affordable housing (the product). Three times he addresses the “buyer/renter and thereby housing affordability with longer amortization periods; adjusting the stress test; offering bigger first-time home buyer credits. On his fourth point, he suggested having more affordable housing built. His fifth point addressed both when suggesting the government can “do nothing” and let the economy and market continue as is.
This past February, the 4 provincial political leaders expressed one message to OREA as described by Jeremy Chaput, Feb. 21, 2019 for Ontario Real Estate Association Each leader talked about home ownership as a pillar of the Canadian Dream. Granted, they were addressing Realtors® who are into sales. Ownership is everyone’s dream. In each message, the leaders all addressed home ownership with a focus on the “buyer” and his/her affordability, with some reference to affordable housing or the “product” or residence price. But the speakers were politically careful and generic. Were they listening or were they cautious in preparation for an upcoming election? Or did any of them truly understand how the two focus points should be better integrated with a realistic and workable plan? This could have been a great forum to address both in greater detail.
So, who is listening to those addressing both affordable and affordability? Part 2 will add to the discussion.