Transcript
Speaker: I'm Jane Williams. This is the Red Eye Podcast, produced at the studios of Vancouver Cooperative Radio. In our episode today, Laurentianism speaks with Elliot Rossiter of Douglas College about why simply adding more housing supply isn't going to be enough to solve the housing crisis. British Columbia Premier David E. Bee recently introduced new policies that are designed to build homes, reduce rental vacancies, and open up strata housing for renters.
Speaker: Dr. Elliot Rossiter is a faculty member in the Department of Philosophy at Douglas College, where he's working on a multi -year project on housing justice supported by the Social Sciences and Humanities Research Council of Canada. And he joins me now to talk about Premier E .B.'s supply -side response to the housing crisis. Good morning, Elliot. Good morning, Lorraine. You say these supply -side approaches to building houses are, in this case, guided by a concept called filtering. What is filtering?
Speaker: So first, it's a pleasure to be on the show here. I'm a fan of the show on Vancouver Co -op radio in general. So filtering is, you can understand filtering as thinking about changes in occupancy over the life cycle of a building and thinking about that, especially in terms of income. So filtering can actually have
Speaker: two senses, a unit can filter up or it can filter down. So for instance, I live in an older strata, low rise condo building that was built in the seventies. So say a unit turns over and someone more affluent moves in, that unit would filter up. Whereas if someone more affluent moves out and then someone less affluent moves in,
Speaker: that unit would filter down. And so when we talk about filtering, generally filtering means kind of something like filtering down is the kind of common understanding of filtering. And that's basically understood more as a broad process in which as new supply comes on the market, and then older supply will be left to people, presumably with lower incomes. And so you would then hopefully see a filtering down process as new supply were to come on the market. That's the basic idea.
Speaker: To me, it's coming across a little bit or it's reminding me of the trickle down theory of economics. Yeah, it has a I would say an element of that. You know, in Premier E .B.'s press briefing, it was framed as a kind of what I call middle out development so that you're thinking about where are you expanding the housing supply?
Speaker: And so it was framed as around middle -class housing. That term was used a lot. It's often a term that we hear that we need to kind of build more for the middle class. But I think that term is fairly vague. And we think about what affordable housing for the middle class actually means. I mean, in Metro Vancouver, for instance, after -tax income is about $80 ,000 a year.
Speaker: with new census data that was released. And a common measure of affordability is spending no more than 30 % of your after -tax income on housing. So what that would look like if you crunch that is basically that
Speaker: there should be mortgages going for really no more than, say, $400 ,000 or something in that ballpark. I'm a philosopher. I'm not a mathematician, so I don't have the numbers fully memorized here. But if you think about new supply that's coming onto the market, I sometimes just scan out of curiosity listings. In a new supply coming on, there's a tower near where I work, and it's the Sobation Tower. And there are two bedroom units that are coming online for $900 ,000.
Speaker: And so that clearly, if that's the kind of development that's being prioritized, for instance, that's clearly not affordable to the middle class. That's very far from median income. That is more toward the top. So it's really a top down approach. So I think in that way, it's certainly kind of a form of trickle down in the sense that it's building for kind of higher incomes up near the top income brackets, and then hoping that that will filter down as units are left over, essentially.
Speaker: No, Elliot, you say that the logic of filtering has both moral and empirical problems. What do you see as the moral problems? So I think the moral problems is that there's this question about for whom should we build? There's a lot of debate around
Speaker: this question of how much. And there are supply skeptics on the one side who will say that we have already been building a lot, already building enough. And then there are other kind of, I don't know what the flip side would be, the supply enthusiasts who think that we need to build much, much more upwards of, I think that the CMHC came up with a report talking about needing to build three and a half million homes.
Speaker: But if we think about kind of who are we building for, we talk a lot about this question about kind of how much, but we don't talk enough about I think for whom and by whom. And so I think the problem with the filtering logic is that it, it distracts us really from what I would argue is that more fundamental question of who is making decisions? What are the power dynamics within the housing supply and who benefits and who is harmed with those? I think we don't talk enough about those moral questions.
Speaker: Is there evidence that adding new supply using this concept of filtering actually increases housing for people on lower incomes?
Speaker: I mean, if you look at the research literature on filtering, it's mixed results. So even one quite influential study of filtering by Stuart Rosenthal, 2014, and the American Economic Review that's often cited by filtering advocates, it even has a very mixed story. So Rosenthal will talk about that there's evidence for filtering in especially kind of rental units that are older,
Speaker: in markets where property prices are not inflating. But that filtering doesn't really take place as much or on a very longer timeframe in markets where housing prices are going up. And so there's argument actually that what's happening is not actually filtering down in many instances, but actually filtering up, and that would be gentrification.
Speaker: where you have units turn over and it's more affluent people moving into older spaces. But I think even where filtering takes place in terms of lower units being left over is not morally unproblematic when this happens. Some examples of filtering, for instance, could be thinking about white flight
Speaker: in the United States where you have downtown cores left to African -American populations, but that's really based on spatial segregation and a lot of racial injustice. So I don't know that we'd talk about that as a good example of
Speaker: of housing justice in terms of filtering. And then it can also happen in terms of deindustrialization. So if you think about, say, a town that has a major industry and say the factory gets closed in that town, there are units that people leave the town and there are units left over and lower income
Speaker: households can move into those units, but this is framed against a broader problem of deeper economic injustice within our economic system. So I think that it's important to even where filtering takes place, it's not morally unproblematic, but the argument that really I want to make is that if we rely on this logic of filtering, it's really prioritizing the interests of those with wealth over the interests of those with lower incomes.
Speaker: Let's dive in a little bit more to what you were saying about for whom and by whom. What could that look like in a progressive housing policy?
Speaker: I mean, you know, the first thought that comes to my mind is one example would be supporting for Indigenous by Indigenous housing solutions. So the Aboriginal Housing Management Association, for instance, came out with a report last year or earlier this year about a core set of housing recommendations. And one of those is really trying to ensure that there is more
Speaker: development by Indigenous communities for Indigenous communities within urban spaces. So I think that's one example. But I think more broadly is thinking about a logic of co -creation. So thinking about how can communities, especially equity seeking groups, be more part of the housing design process in terms of shaping their housing supply.
Speaker: And there's a really brilliant urbanist named Jay Pitter, whom I cite in the order. And she has a lot of things to say about how we can engage in these kinds of co -creation processes in an equitable way. But it could look like things like participatory design in the architecture of buildings. It could look like participatory planning in communities. And something that I was hoping for
Speaker: in the Housing Supply Act, which really gives the province very strong powers to intervene in the bylaw and permitting processes of municipalities based on whether or not they're keeping up with their housing needs reports.
Speaker: Something that I think would be great is instead of centralizing more power within the housing ministry that's just been announced, instead of centralizing that power, I think it would be much better from a progressive and democratic perspective to diffuse that power out to communities more broadly, and especially in a way that I think centers equity -seeking groups to play more of a role in these participatory processes at different levels around shaping the design of our housing supply.
Speaker: Just hearing you saying that just makes me have a very strong desire to see that in place. Can you talk about real estate investment trusts, REITs, and how they're impacting affordable rental housing? Yeah, so I think I've learned a lot on this from Martine August, who is at the University of Waterloo, has written a lot about the financialization of housing.
Speaker: And I think another great book is The Asset Economy by Lisa Adkins at the University of Sydney. And I think when you put these pieces together, what essentially the picture that's painted is that you have a lot of
Speaker: investment capital chasing different forms of assets, trying to get higher yield on different forms of assets, including housing. And so as housing gets turned, not just from a commodity, something that can be bought and sold, but an asset into something that is speculatively traded more and more, then you see the growth of these kinds of investment funds, such as real estate investment trusts that essentially hold a portfolio of housing.
Speaker: And now that, in terms of, say, the largest increase in home buyers, reading this recently from Better Dwelling, is owners that own more than 100 properties. That's the greatest kind of increase in terms of type of buyer on the market. And that's deeply concerning in terms of thinking about increasing control and consolidation within the housing market that serves really the kind of financial interests of investors. And what are those interests? Well, those interests are really to,
Speaker: increase that asset value? And how do you increase that asset value? You increase that asset value through adding service charges, through fees, but especially through turnover. And this is an explicit strategy to turn over units through trying to essentially displace tenants playing lower rents and you displace tenants.
Speaker: And then you increase those rents dramatically, often double, maybe triple, huge, huge increases of rent. And that's a very profit generating strategy in terms of what I would call the assetization of housing. Now, Bernie B and New Westminster are touted as cities that have leading edge municipal housing programs. What are they doing right and what more do they need to do?
Speaker: Well, I think what they're doing right is that their policies are really designed to try to balance the competing, I don't know if I would call them competing interests, if I'd frame them as interests, but the kind of power dynamics so that
Speaker: tenants have more power with respect to these larger, say, financial firms within the marketplace. And I think that good policy can do that. So I think the best policy for that really would be some form of larger, wider vacancy control, because then the firm really loses the incentive to turn over a unit in a way that displaces and evicts tenants. But what Burnaby has done
Speaker: is and that I think is a very laudable strategy is around taking aim at I mean all the really awful demovictions that were happening around Metro Town and other parts of the city where you have these low rise affordable older buildings being replaced by these high rise condos and
Speaker: What Burnaby has done is brought in a tenant protection policy in terms of relocating tenants during the construction of the building, the redevelopment of the building, but then also guaranteeing them a right to return to the building at a similar rent and with a similar number of bedrooms. And so that's a great policy. Although I think there's more that could be done for that type of policy, I think
Speaker: Guaranteeing for instance not just number of bedrooms but also space there are non market rentals for instance are being proposed in some new buildings in bernaby that i think around three hundred and twenty square feet or there's a very small amount of space. And i think that's you know trying to match the space i think would be more valuable and then also i think trying to update that so that again.
Speaker: tenants aren't just kind of afterthoughts. I mean, it's great that tenants are not being displaced and that they're being taken care of in this way. But I think even better would be that tenants actually who are in the building say that are being redeveloped actually had some meaningful role in consenting to the new structure and development of the building and that you had full social integrations. There is, for instance, a building that's controversial right now around proposing a corridor type of structure where you have separate amenities
Speaker: separate entrances for the non -market rentals and for the strata. And I think that spatial segregation should generally of that sort should definitely be resisted for a number of reasons. So I think that policy could be improved to be even more progressive, but I think it's a step certainly step in the right direction. In terms of New Westminster, I mean, New Westminster took the lead in terms of making sure that rent evictions wouldn't happen on the same scale and bringing in in 2019 some very significant protections for tenants that prevent
Speaker: renovations for cosmetic reasons. That's been updated now through the province. They last year brought in a bill designed to combat renovation that basically stipulates that cosmetic renovations can't be done, but that there might be some instances where
Speaker: If there are significant renovations that need to be done, that tenants can be displaced, but that goes through an arbitrator and through the residential tenancy branch. I think, again, there's still some room there for improvement in terms of some consistency that protects tenants and probably ultimately some form of wider vacancy control is really where these policies ultimately need to go. What advice do you have for the new housing minister and the new Housing Supply Act?
Speaker: Listen to philosophers. No, I don't know. What would my advice be? I think probably some of the things that I'm saying already, but just to recap, would be, I think there can be this mentality, this supply forward market dominant mentality that is, you know, we need to build, build, build.
Speaker: And i think that that mentality needs to be moderated i think i probably agree with one third of that i think we do need to build i think especially we need to build. Non market housing affordable rentals especially trying to increase vacancy rates in the rental market so that tenants are able to to say no they have a freedom to say no to.
Speaker: really kind of exploitative rents or substandard renting conditions. So I think trying to increase our supply of rentals is really important and especially rentals that are affordable to those with low and moderate incomes. So I think instead of this kind of build, build, build approach, I think that we also need to protect
Speaker: and to co -create. So the protection element is that we need further protections really for vulnerable renters. I think there's a lot of fear that people have in our housing market. And I think as the premier or other ministers make announcements, I think that the focus should be on
Speaker: How do we give hope and alleviate fear of those who are concerned, say, about being renovated, who live in a unit where they're being pressured to leave because of the profit -seeking activities of these larger financial firms? How do we give hope and protection to those types of people or people who have been renovated onto the street or into shelters? How do we give hope to these groups? And I think a much more progressive policy is needed for that.
Speaker: And I think that the last element is really the co -create side is that there needs to be ways of trying to integrate more deeply and not just performatively, not just through token consultation, but through, I think, really deep kind of democratic processes of consent, of integration of the perspectives of those with lived experience really of housing insecurity and other forms of marginalization to play a much more central role in the design of our housing supply.
Speaker: Well, it's just been great talking with you today, Elliot. And I guess one of the things is Vancouver, sometimes the housing situation seems so overwhelming and you kind of get into your mental ruts about what you think about it. And it's great to hear these ideas that I think open up the discussion about what the housing solutions could be.
Speaker: Yeah, I think it's very easy to get depressed when thinking about these things. But I think it's important for our imagination, our moral imagination, to be elevated when we can. And for me, I just think about how beautiful and just it could be if really more of the, it's not just as an afterthought, but more of the firstfruits really of our housing supply went toward those who were poor, those who were dispossessed, and those who were marginalized in different forms.
Speaker: Just great to talk to you today. Thank you so much. Thank you. It's been a privilege. I've been speaking with Dr. Elliot Rossiter. He's a faculty member in the Department of Philosophy at Douglas College, where he's working on a multi -year project on housing justice. The Red Eye podcast is produced at the studios of Vancouver Co -op Radio. You can support us by supporting Co -op Radio.
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