Public housing project in Helsinki, Finland.Y-Foundation
Gregor Craigie is the author of Our Crumbling Foundation: How We Solve Canada’s Housing Crisis.
The term “housing crisis” has become all too familiar in Canadian conversations. It’s not on par with “loonie” or “double-double” yet – not quite – but with both homeless encampments and multimillion-dollar homes now commonplace, it’s clear this country is experiencing a genuine crisis.
What’s less clear is exactly what we should do about it. Unfortunately, there’s no quick fix to repair the crumbling foundation of Canada’s affordable housing stock. Instead there are dozens of separate measures that would help, including many from other countries. We’d be wise to borrow from our neighbours.
In Paris, a recent building boom has transformed the City of Light into a beacon for housing advocates worldwide. Between 1994 and 2014, home construction had slowed to an anemic average of 43,000 homes a year. But in 2017, more than 98,000 homes were built, one-third of which were social-housing units. By comparison, New York produced only 25,000 new homes that year. London built about 24,000.
So how did the French double housing construction in a densely populated metropolis? The short answer: Their governments made increasing housing construction a major priority.
“The increase can’t be explained by outside factors, but was a direct result of government policies,” says Yonah Freemark, a research director at Washington’s Urban Institute. Dr. Freemark notes the pace of construction doubled in the French capital, while remaining flat across the rest of France. He credits four policies at various levels of government: boosting public housing construction; making public land available for new homes and business hubs; introducing new financial and regulatory incentives to coax private developers; and imposing new construction quotas on municipalities.
One of the more remarkable aspects of the building boom is that it was achieved primarily through infill, rather than sprawling outward. After the French government passed a law in 2010 requiring Île-de-France, the region that includes Paris, to build 70,000 new housing units annually, the region followed with its own law that protected the greenbelt surrounding Paris. “The effort to spur construction was thus not primarily predicated on the bulldozing of natural and agricultural land,” Dr. Freemark observes.
Paris is still an expensive city, but after years of soaring rents, the financial curve started to flatten in 2021, just as the French capital reached its target of making 25 per cent of all housing accessible to people with lower incomes. The city then raised the target to 40 per cent by 2035. That will take a lot of renovation and repurposing of hotels, offices, parkades and other existing buildings. “Do we want to make Paris a city that would be a citadel reserved for the privileged?” asked Ian Brossat, Paris’s deputy mayor and housing commissioner at the time, “or … a city that allows the people who run it to actually live there?”
This civic reimagining can be seen atop La Samaritaine, a luxury department store in the heart of Paris. The iconic building was closed for major renovations in 2005. When it finally reopened in 2021, it was crowned with 96 new affordable apartments on its top floors. The store is owned by LVMH, whose chair, Bernard Arnault, was the world’s richest person in 2023. The company certainly didn’t need the rental income. But it did need the government to approve its redevelopment plan.
Now, dozens of tenants – garbage collectors, teachers, interpreters and others – enjoy stunning views of the Eiffel Tower, the Louvre and Sacré-Coeur. In 2021, tenants paid an average of €430 a month for studio apartments, and €929 for three-bedroom units. Nursing assistant Zina Hadjab couldn’t believe her luck to be moving into such a nice new home with her husband and teenage daughters. Their three-bedroom apartment is about 860 square feet and the monthly rent is a relatively affordable €1,400 (about $2,060). “We had a lucky star,” she gushed. “I never would have imagined living in the centre of Paris.”
Not everyone in Paris is so lucky. Thousands still languish on housing waiting lists. But Dr. Freemark believes the Parisian model suggests that “limited construction in countries throughout the West is hardly an immutable condition.”
Limited construction hasn’t been a problem in Singapore, despite limited land. Housing supply in the small city-state has kept pace with demand for decades. But this global business hub hasn’t relied on market forces. In fact, Singapore removed most housing from the free market years ago. At least, it removed most land from the free market. The end result is that a staggering 90 per cent of people in Singapore are “homeowners” under a lease model of homeownership, and 80 per cent of them lease apartments from the government-owned Housing and Development Board. “HDB flats” come in a variety of sizes. The popular “3Gen” flat includes two single bedrooms for children, plus one primary bedroom with ensuite for their parents and a second primary bedroom with ensuite for grandparents. The smallest, most affordable flats are attainable by the vast majority of people, largely through government subsidies.
Construction of public housing projects in Singapore on June 21, 2023.ROSLAN RAHMAN/AFP/Getty Images
Singapore also encourages residents to save money to buy a home through mandatory contributions to the Central Provident Fund. All working Singaporeans and permanent residents contribute 20 per cent of their wages, and their employers add another 17 per cent. The government also tries to dampen prices by discouraging foreigners from buying property through punitive taxes, restricting local residents to owning one public flat at a time, and requiring residents to live in their HDB flat for five years before they sell. Unlike public rental apartments, Singapore residents thus have a financial asset in their leased home, even if it’s a more modest one than many Canadian homeowners have come to expect.
None of this means Singapore is cheap. A 2022 comparison of 92 housing markets placed it roughly in the middle of the pack. Its homes are also small by Canadian standards. Still, housing is attainable for most residents. It should be noted, however, that Singapore’s “housing miracle” doesn’t seem miraculous to some. Generous housing subsidies of up to $80,000 favour heterosexual married couples, but exclude lesbian, gay, bisexual and transgender couples.
While most Singapore residents live in high-rises, many Canadians would prefer something more down-to-earth. But many single-family homes are now too expensive. As British Columbia and Toronto move to eliminate single-family zoning, they can look to Oregon for signs of what’s to come. In 2019, the state allowed up to four homes on single-family lots. The City of Portland later allowed six units, if half were registered as affordable.
Eric Thompson and his company, Oregon Homeworks, responded to the changes by building a new business model. Mr. Thompson’s company was already building expensive single-family homes in established neighbourhoods, but pivoted to making smaller homes that would be approved under the new zoning. A year after the zoning changed, Oregon Homeworks had dozens of new projects under construction. The most popular option was the fourplex, followed closely by cottage clusters: small groupings of houses on a single lot. Most of those cottages are about 1,000 square feet, with two bedrooms and two bathrooms. Some share common outdoor space, while others have small fenced yards, and Oregon laws allow those lots to be subdivided.
This is a significant change, and it presents challenges. For instance, city bylaws prevented cottages from sharing sewer lines. That added to the cost of each unit, and increased the risk of cracking municipal sewer mains. Critics also claim cottage clusters are a less efficient use of land, providing fewer homes than low-rise apartment buildings would. But Mr. Thompson says the change is popular. Homes now sell for around US$500,000 to young, first-time homebuyers with middle-class jobs – firefighters, teachers and people who work in the service industry. “So if they can now live here,” he told me, “I feel really good about what we’re doing.”
The overall impact hasn’t been dramatic. Housing researcher Michael Andersen analyzed data for the first year multiplexes were allowed in Portland – before cottage clusters were permitted – and calculated that an extra 200 to 300 homes were built because of the change. “It’s certainly not a finish line on either housing poor people or on building enough homes,” he said. But Mr. Andersen believes the changes will improve affordability eventually. “The bigger effect is in the long term. As every unit in the city reaches the end of its useful life, under the new law it’s very likely to be replaced by a handful of less expensive, though nice, new units.”
Perhaps the most urgent question in Canada’s housing crisis is: what should we do about homelessness? It’s a question Finland has been asking for more than a century. In 1883, a shuttered movie theatre was converted into a shelter known as the “Chapel of the Wretched” to help the city’s unhoused. Things got worse after the Second World War, when the Soviet Union swallowed a big bite of the country, displacing 400,000 Finns. It reached a crisis in 1967, when 950 prisoners were released to mark the 50th anniversary of Finnish independence. Most ended up homeless, with as many as 50 freezing to death on one especially cold night. After years of half-measures, Finland’s government made homelessness an official priority and adopted a simple philosophy: “Housing First.”
It didn’t invent the model. Sam Tsemberis, a Canadian psychologist at Columbia University, is often credited with developing the philosophy, which challenged the notion that people struggling with addiction and mental illness couldn’t be housed until those issues were addressed. Housing First flipped that assumption on its head, and claimed that healing wasn’t possible until a person had a proper home. The model has been tried around the world – including Medicine Hat – but Finland was the first country to adopt it nationally. The national homeless population dropped from roughly 20,000 in the 1980s to less than 4,000 by 2021. Only one overnight shelter remains in Helsinki today, and the sight of people sleeping on sidewalks is now rare. Between 2008 and 2016, the Finnish government paid more than €250-million to hire support workers and buy shelters and apartment buildings to convert into supportive housing units.
Pasi Hietanen moved into one of them, after struggling with addiction on the streets of Helsinki. “I’ve been declared clinically dead eight times due to overdose,” he says. But when he met social workers at a mental-health day centre, they helped him find an apartment in a safe, if sterile, seven-storey concrete building. That building is not cozy. The corridors are finished in institutional tones with wipeable surfaces and no adornments other than graffiti on the stainless-steel elevator doors. But what it lacks in luxury it makes up for in stability. Residents are allowed to use drugs, and the building is staffed with social workers and security staff. Clean syringes, needles and HIV testing are available. Residents are also taught basic life skills that many missed along the way: cooking, cleaning, money management. While a few choose to leave, and some are evicted for behaving violently, most stay for years. There is no time limit. Mr. Hietanen says having his own home in a safe building “revolutionized” his life. “I wouldn’t be here telling you my story without this apartment and the social workers.”
And what about the economics of Housing First? Do the millions spent offset the costs of leaving people out on the streets? The Y Foundation, Finland’s largest non-profit housing provider, claims that moving one chronically homeless person into stable housing saves the government €15,000 (about $22,000) a year. Housing First has been studied in other countries, too. Angela Ly, with Quebec’s Ministry of Health, and McGill University psychiatry professor Eric Latimer have reviewed several studies, concluding that shelter and emergency department costs decreased, though savings to the justice system were more ambiguous. However, they cautioned against looking for an economic rationale. “Such an approach can hardly be justified,” they wrote, “as few health care innovations that governments agree to fund do so (for example, new cancer drugs); often, they generate no cost offset at all. Rather, they are judged to yield sufficient benefit to merit their cost.”
Maybe a similar approach should be applied to Canada’s housing crisis – maybe the changes we need will yield sufficient benefit to merit their cost. I’ve only listed a few fixes here, but we need dozens more, including improved public transit, dedicated work force housing, major reinvestment in co-ops (Germany has 10 times as many as Canada, per capita), tighter rules on short-term vacation rentals and more guards against foreign nationals buying homes here as investments. We could also study the widespread adoption of innovative building methods, such as modular construction and 3-D-printed homes, and consider linking public housing funding to annual immigration numbers to keep up with surging population growth.
But many more changes are needed. And as anyone who has ever lived through a home renovation knows, rebuilding is rarely quick or clean.