The recent media storm over the Canadian census long form (see my previous post) has ignited a seemingly latent populace that believes that research, and researchers themselves, are pointless exercises in readin’, writin’, book-learnin’ and other geeky pursuits that don’t matter: that data will only be used in order to harass and over-tax the less-educated, privacy-minded general public. (Have a look at some of the articles posted in every major Canadian news outlet concerning the recent Census developments, and more to the point, have a look at some of the comments the “general public” posted.) But it’s not just your “average Canadians” who question the educated population. In today’s Globe and Mail (“Tories stall census probe, ask to hear from average Canadians”), Industry Minister Tony Clement has “already dismissed the controversy as one that only occupies “some of the elites in our country,” a phrase he also used when Canadian academics criticized the federal government’s decision to prorogue Parliament.

Maybe in countries where a university education costs more than a Bentley, it would be correct to state that educated people are a bunch of rich snobs who might be a tad removed from the fray (I said maybe). The vast majority of Canadian universities are public schools, meaning they have government-subsidized tuitions that are considerably lower than their American counterparts. Although tuitions have risen steadily in the last fifteen years or so, Canadian student loans are still readily available to most students. The Social Sciences and Humanities Research Council (SSHRC) offers fellowships for Masters and PhD students. Admittedly, these have become rarer in recent years due to the Harper government’s decision to prioritize PhD topics directly related to the economy, and the National Sciences and Engineering Research Council (NSERC) just announced it would drop its Doctoral Fellowship program this year. However, it would seem that funding scarcity hasn’t had much of an effect on our already high education levels.

Higher education is fairly well-distributed among gender, ethnic groups and income levels in Canada. During the 1930s, a quarter of Canadian women were university educated, and to look at graduate schools now you’d be hard-pressed to find a majority of men in any discipline: women have out-numbered men in university admissions since 1981. In the 2006 Census, 25% of the Canadian population had a university degree higher than Bachelors level. By the way, this is lower than the 31% of Americans with this level of education. Almost half of the Canadian population (49%) has a college diploma, trade certification, or university degree. Of OECD countries, Canada has the highest percentage of the population (from 25 to 64 years old) with a post-secondary education (46%), slightly higher than the Japan (40%) and the US (39%), and considerably higher than the OECD average of 26%.

Many immigrants enter the country with educations far superior to those born in Canada. And because the vast majority of population growth in Canada is due to immigration, these university-educated immigrants have a major impact on our cities, our labour market, and our education systems. In 2006, 51% of recent immigrants to Canada had university degrees, compared to 19% of the Canadian-born population. Immigrants also out-perform native-born Canadians in prose, document literacy, numeracy and problem-solving, according to the International Adult Literacy and Skills Survey. Even more importantly, immigrants raised in China, India, or the Philippines (Canada’s three largest source countries for immigrants) know the importance of education and instill it in their children. Let me be clear: it is well known in the poorer parts of the world that education offers an escape route out of poverty. In most cases, the only way out. Many of my classmates at the University of Toronto were the children of immigrants who had only been able to complete high school educations or, occasionally, community college. We were the first generation to attend community colleges and universities en masse, and it was expected that we do so, because our parents could not afford to go themselves when they were our age. Despite their scrimping and saving, many of us were unable to pay tuition without government-subsidized public schools, government-funded loans, scholarships and fellowships.

While a university attendance is lower among the low-income population, Statistics Canada published a study in 2007 that found lower rates of attendance were due to differences in academic performance, parents’ level of education, parents’ expectations, the high school attended, and other such factors. Only 9.5% of the youth in the study reported that financial constraints were a barrier to university attendance. While this is still cause for concern, it is somewhat reassuring that the rapid ascent of tuitions in the 1990s have not have more serious effects.

I’m not sure that it’s accurate to describe this one-quarter of the Canadian population with Bachelors degrees as elite, or “the most powerful, best educated or best trained group in society” (Cambridge Dictionary). Can the half of the population with post-secondary educations, or the half of recent immigrants with university degrees, all be considered elites? While there are some groups in Canada who are under-represented in higher education (only 8% of Aboriginals have university degrees, but 41% have post-secondary educations), we are generally an educated bunch.

Perhaps that’s the real crisis in the Harper government: realizing yet again that Canadians aren’t as dumb as his 2008 re-election might suggest. First, we rose up in the tens of thousands to protest proroguing Parliament, and now that over 200 groups have protested the removal of the Census long form, he’s had to personally speak out on what he probably considered a minor technical issue that would only concern “elites”. After both of these crises, the Conservatives dropped in the polls, creating considerable distress for Harper’s minority Conservatives. An educated populace is a problem when your government acts more like a monarchy than a democratically-elected minority government that could topple at any time.

In Toronto, new home sales in June 2010 were 43% lower than they were twelve months earlier, and July was the third consecutive month of decreasing sales. Housing starts in June were 15% lower than they were in May. But not much hand-wringing is going along with these trends: many experts, like Toronto Real Estate Board president Bill Johnson, say the market “has become more balanced.” After all, average prices are still 6% higher than they were last year, and most of the decline seems to be in first-time buyers. Higher-than-average buying in the first quarter of 2010 means that total sales this year are still up by 11%.

Vancouver has also seen record drops from last year, a 45% decline from last July and the third-lowest July in a decade. But again, this had little effect on prices: the average house price in Vancouver fell by just 0.2% to $793,193. Real estate agents estimate that about a third of the buyers are first-time buyers.

Outside of the major centers, where listings were lower and the market appears to be cooling, there are plenty of houses for sale in small- to mid-sized cities. Nevertheless, both economists and the general public are becoming concerned about the state of the housing market and economic instability, as well they should be. I’ve written before on the instability of housing as an investment and the major government supports that encourage the vast majority of people to believe homeownership is the only option. Is this really the only way to house our population? More specifically, should it be the only housing alternative to receive such funding and policy support? Although there has been some tightening of lending policy and mortgage availability, there are still a lot of policies and incentives supporting homeownership. What about using some of this leverage to support rental, co-op and other types of housing?

In Sheng’s doctoral defense, she contrasted two cultural production sites, one of which developed on its own, as artists found the low-rent buildings vacated by industries that had relocated to the suburbs. The second was designated by the government and targeted for redevelopment. The contrast between the two was very interesting: the first had grown illegally for some time as artists occupied the various buildings on the site, then over a decade gentrified to the point where rents are almost at the upper limit of affordability for small-scale production. The second site was initially designed with high-end stores and upscale landscape architecture targeted to foreign tourists. It is under-used (the rents are too high and there may not be enough demand for the location) and the artwork sold there is unaffordable to the Chinese population.

Dr. Zhong will be starting a post-doctoral position at the National University of Singapore, where she will continue her research on urban redevelopment and the policies that impact growth and change in Chinese cities.

Cypress Community Garden

Cypress Community Garden

Municipalities have become increasingly concerned about food security in the past few years. I’ve written before about Vancouver’s Food Policy Council and some of the work they’ve been doing, including encouraging a by-law to allow backyard chickens. Since then some notable developments have happened in the city.

A few weeks ago, Vancouver city council approved five community projects, agreeing to spend $100,000 on the small-scale projects. One aims to help people on social assistance or small fixed incomes can buy coupons at the beginning of each month for a small fee and redeem them later in the month for fresh fruits and vegetables at a mini-farmers market in the neighbourhood. Another funds the development of farmers markets; several Vancouver neighbourhoods worked with city council to streamline fees and fix restrictive zoning bylaws. Council has now approved the development of interim guidelines and zoning changes to develop new farmers markets and expand existing ones, including the very successful Kitsilano, West End, and Trout Lake markets. I visited the West End farmers market this weekend and found the vendors selling seasonal greens, peppers, berries, cheese, fresh lamb and eggs. The prices, as usual for Vancouver, started around the same as supermarket produce and went up from there, but there’s no denying the freshness of the food. I’m still not sure why farmers markets out here are so pricey, when a dollar or two at a market in Ottawa, London, or Toronto will get you a head of broccoli bigger than your own.

There are lots of other ways to get fresh produce in the city. Vancouver has some amazing community gardens, where residents pay a small fee for a garden plot and grow all sorts of fruits, vegetables and flowers. A friend of mine has a plot at the Cypress Community Garden, which cost her $30 for the summer. She goes to garden work parties with the many other gardeners in the area; Kitsilano is full of apartment dwellers who otherwise wouldn’t have the space to grow their own food.

You can also raise chickens and have access to your own fresh eggs daily, since the bylaw was passed to allow backyard chickens. You can check out all these developments on Vancouver’s Food Policy Council website.

The Census is a statistically viable data source because it is a mandatory survey administered by government officials, with every fifth household receiving a more in-depth questionnaire, known as the Census long form. Eight basic questions, such as age, sex, marital status, and the relationship of people in a household, are recorded on the short form, and many of these questions date back to 1871. Fifty other questions (that’s right, 50) , such as mode of transportation used to commute to work, commute distance, detailed questions about income and occupation, and detailed questions about ethnicity and immigration are on the long form. Although many of these questions have been on the long form for 35 years, some are relatively new: the two transportation questions, dealing with transportation mode and commute distance, date back to 1996. In the absence of a national transportation survey, this data can tell us which groups travel by transit the most or which cities have the highest cycling rates, just to give a couple of examples. I published a paper in Plan Canada just six months ago that compared youth and young adults’ transportation modes in the ten largest cities in Canada. I’m currently using Census data from 1986 to 2006 to investigate how immigrants’ housing and transportation choices have changed over time.

I fail to see how any of these questions could be considered an invasion of privacy, especially considering the fact that names or any identifying characteristics are never linked to the data. This on top of the fact that Census data in Canada, unlike in the US where data is free and public, is incredibly restricted. Only researchers in government or academia have access to the Census microdata, that 20% sample that contains the long form data. Plenty of other government agencies collect private information: you need to report your height, weight, hair colour and eye colour to get a driver’s license.

The federal government is planning to replace the long form with a voluntary “national household survey” that will be mailed out to approximately 30% of Canadian households, which the Tories argue will reach more households than the long form did. Anyone done a mail-out survey lately? The response rate is usually around 20-40%…what is 30% of 30%? And critics have already noted that the most vulnerable groups, such as immigrants, Aboriginal communities and low-income populations, will be the least likely to respond.

While the opposition parties are marshalling their efforts to reverse the decision, petitions are circled and we all write madly to our MPs, the media has given the issue a fair shake: the issue was covered in all the major papers and online venues, and not just by journalists (see “Canadians must be able to count on Statistics Canada” by academic Richard Shearmur in The Montréal Gazette). In the past week, the Canadian Medical Association, faith groups like the Canadian Jewish Congress, and economists like former TD Bank chief economist Don Drummond have all voiced their objections to the decision to jettison the long form.

Beyond the appalling lack of respect for the vast amount of data generated by the long form and its necessity to researchers, policy makers and community groups, the troubling issue here is that Harper’s “new world order” even extends to the collection of statistics about the people he is supposed to serve.

An update on this story: the head of Statistics Canada, Munir Sheikh, tendered his resignation July 21st over this issue, saying the voluntary “new Census” cannot be considered comparable to the long form.

“Why doesn’t the president of the United States ever get up and say, ‘You can be a full-fledged American citizen and rent an apartment — it’s OK.” David Wessel, economics editor, Wall Street Journal

Americans now pay more for housing than ever before, according to a report by Harvard’s Joint Centre for Housing Studies. In its annual report The State of the Nation’s Housing 2010, researchers write that 18.6 million Americans spend more than half their incomes on housing, up from 13.8% in 2001. While this figure includes both owners and renters, 45.1% of renters are in the bottom income quartile. Homeownership is at a historical low, household income barely increased in the past decade, and rental vacancies are at a historical high. No wonder the authors are calling calling the first ten years of the 2000′s “the lost decade.” But housing “unaffordability” isn’t anything new, nor are our solutions to the problem.

While the Harvard researchers blame falling wages and high unemployment (9.9% in April 2010), high rental vacancy rates and low supply of the most affordable and smallest units are also major issues. Fewer homes were built in the US in 2009 than in any year since WWII, particularly multifamily homes: 62% fewer multifamily developments were begun in 2009 than in 2008. Demolition and conversion of existing low-income rental units is also a major cause for concern. Lower immigration rates are also taking their toll: there was a sharper decline in the number of foreign-born households under the age of 35 than in native-born households from 2009 to 2010. Minority households have been hit hard by the mortgage crisis. In 2009, minorities accounted for 37 percent of householders aged 25–44 and 39 percent of those under age 25. The minority homeownership rate is still expected to increase by 2020, despite lower incomes among foreign-born and minority households and lower immigration rates due to the economic recession.

Some progress has been made in terms of rental housing: rental conversions from foreclosed housing has already been done in many cities, but Housing and Urban Development (HUD) considering introducing market-rental units into its publicly-funded affordable housing developments in order to help pay for much-needed maintenance on the buildings. And the pro-homeownership policies keep coming, including the renewal of the federal tax credit for first-time homebuyers (and its expansion to repeat homebuyers) and Federal Reserve purchases of mortgage-backed securities to help keep interest rates low. But with the expiration of the tax credit program in April 2010, Harvard’s Joint Centre for Housing Studies warns that any good news may not be long-lasting. The problem, they say, is that there is unusually low demand for new homes. The ratio of housing and transportation costs to income has risen steadily over the past fifty years (see Figure 30 and 31 of the report).

As I’ve written before, without massive government programs to support homeownership and assistance for low-income renters, housing has ever been a good deal. Check out the CBC’s digital archives on the development of suburbs. In a video clip from 1954, the narrator explains how expensive homes are for the average person and how far people have to live (up to 50 miles from the city center) to afford them. In 1953, the average Canadian earned $971/month before taxes. Don Mills, the first suburb in Canada, had house prices beginning at $11,000 all the way up to $100,000. Rental rates at that time were $300/month for the average apartment in Toronto (already hovering around 30% of the average Canadian’s income, the level most housing authorities classify as affordable) and $100/month for a basic three-bedroom in the city centre. In the new market-rate high-rise apartment complexes in the suburbs of Toronto, apartments went for less than $100/month. In Montreal, then the largest city in the country, 70% of homes were apartments and the going rent was $70-100/month, only slightly more than the rents in Winnipeg ($80/month). A house in Vancouver was $2,000 cheaper than in the east at the time. While 1950s housing solutions (demolition of existing older housing to make room for low-income public housing developments in city centres, massive concrete high-rises in the suburbs) may have been questionable, they were quite desirable at the time: the wait for affordable housing, like the still-under-construction Regent Park) was 2 years for a $29-90/month rent-geared-to-income apartment. The average rent at Shannon Heights, a 1950s assisted rental development in Halifax, was only $90/month. Commuting to the city became a new drag, and buses quickly replaced streetcars and trains, steps were taken to make commuting more enjoyable. A 1963 video clip records a housewife saying that the lack of transportation options in the suburbs mean she spends considerable time driving her teenagers around; another says her family moved to the suburbs because that’s where they could get a mortgage.

Whatever housing problems we face today, whether it’s affordability or commute distance, they’re nothing new. Solutions to these problems, like artificially stimulating homeownership through tax incentives and policies, are likewise nothing new; housing affordability problems persist. Recently, researchers at the The New York Times compared the cost of living in a suburban house to an urban apartment in the New York City metro area, and found that the suburban option cost a surprising 18% more (“High-Rise, or House with Yard?” July 2, 2010): the big difference was the higher property taxes, and their comparison didn’t include the cost of home repairs. Even the The Wall Street Journal is publishing articles saying homeownership doesn’t work (“Is the Homeownership System Broken?”, June 22, 2010): WSJ economics editor David Wessel is quoted as saying, “So now we have a system where a lot of people own homes but don’t have any equity in them, which means you don’t get any of the virtues of investing in them. And the government has been forced to take over the mortgage financing system, which suggests that it wasn’t a very strong one if the government has to take it over.” This is quite a turn of events. Could North Americans be forging a new path in housing policy?

In June, the Vancouver Sun featured a special five-part series on Filipinos in BC, trying to paint a broader picture of the Filipino population than their reputation as “nannies and maids”. However, the articles succeeded only in painting a somewhat grim picture of the challenges new immigrants face, even well-educated Filipinos who are usually fluent in English. Many of the more recent Filipino arrivals came to Canada on temporary worker visas. This program started in 2001 and was intended to fill labour shortages in technology, such as jobs in the burgeoning oil sands in Alberta. It was then extended to all kinds of other areas such as nursing, trucking, construction, fast food industry, and retail. There have been complaints about the program as it is vulnerable to human rights abuses, although some temporary workers may now apply for permanent residency after two years. Still, as I found out during my fieldwork in Toronto, Canada offers a better deal than other countries: it takes ten years to qualify for residency in Germany and in Saudi Arabia, it is impossible to get permanent residency. There are many other challenges for newcomers, which is why many choose to move to the major cities, where substantial Filipino populations, cultural associations, and community groups can provide support.

As many of you know, my dissertation focuses on the housing and transportation choices of Filipino immigrants in Toronto. I am particularly interested in how these choices have changed over time as the city grew and changed. What kinds of jobs did new immigrants find when they entered the country? Where did they live? How did they travel? Structural changes in immigration policy have played a key role in these choices, such as the introduction of family class sponsorship in the 1970s, the creation of the LCP in the 1980s, and the temporary worker category in the 2000s. I will be writing more on my dissertation topic as I finish up my data analysis in the next few months.

snow: a type of precipitation that rarely occurs in Vancouver but is uniformly acknowledged by Vancouverites, as it causes all traffic to cease. A very cold, dense mix of ice and water falling to the ground in clumps, occasionally persisting for 20 minutes before melting.

suckerhole: a patch of clear blue sky that often appears about an hour before sundown on a rainy day, tricking you into believing the next day might be sunny. Often occurs within a 7-to-10-day stretch of rain.

summer: var. a. a season that lasts from July to August, with clear skies and temperatures in the mid-20s. Rain persists until the end of June, when the skies begin to clear, only to cloud over again by Labour Day. Occurs for two out of three years, often following a relatively dry winter. var. b. a season that lasts from May to September, with clear skies and temperatures in the mid-20s, with a week or two in the high 20s. Little rain. Occurs about once in three years, often following a very wet winter.

Grouse Grind: not, as the Granville Island lager ads confirm, a dirty dance move, but a hike up Grouse Mountain deemed necessary for outdoor enthusiasts.  The vast majority of the “trail” is paved and involves steep stairs; despite this it has a cult following. Cult followers get a time stamp at the bottom of the Grind and compete for the shortest time.

Kitsilano: alternately considered one of Vancouver’s most/least popular neighbourhoods, formerly housing hippies and now home to some of the most expensive real estate in the country. Kits culture includes yoga studios, dog walkers, coffee houses and strident environmentalists, which tends mask to mask the neighbourhood’s unique history and geography.

Commercial Drive: the last bastion of “working class” Vancouver, with a mix of shops, services, and interesting industrial land uses that predate the current Starbucks trend. That’s all Vancouverites want you to know about it. Anything else and you might want to move there…and you just don’t understand the unique culture, history and geography of the Drive.

East Vancouver: alternately considered one of the most/least popular neighbourhoods in Vancouver, with strong working class roots and humble dwellings, until recently quite affordable. Very stable, long-term community activists and vocal residents have led to a sort defensive stance about the community, a sort of “reverse snobbery” mostly directed to Westsiders who can’t possibly understand their neighbourhood, its unique history and geography.

Main Street: a formerly working class neighbourhood, now a hipster hangout with high-end, though independent, stores and restaurants. Socially-aware student types mix with a range of independent activist types, creating a unique culture, history and geography.

hipster: a middle- to upper-class individual who deeply identifies with the working class. Generally prefers to dress in second-hand clothing, currently with a heavy dose of retro 80s such as mullets, large clear plastic frame glasses, skinny jeans and plaid shirts. Musical taste features obscure local bands as well as well-known, but commercially less successful, Canadian bands. Interest in documentary films, bicycling, and pot culture required. Hipsters gravitate to Main Street, East Van and the Drive, having been largely displaced from Kits, Dunbar and Kerrisdale.

lifestyle: a melange of outdoor activities, beautiful scenery, mild climate, yoga, healthy eating, beach activities, self-righteous political and social advocacy, which is being threatened by outsiders moving to Vancouver. Syn. granola. Adj. livable: laid-back, scenic, with access to beaches, various outdoor activities, high-end condo living, and gourmet cuisine, but only for the wealthy.

fur babies: usually refers to dogs and cats who are kept as household pets and treated as the family’s children. A number of shops and services reinforce this image.

coffee shop: a small, independently-owned enterprise that supplies fair-trade coffee, a variety of herbal teas, and homemade treats, frequented by locals. Ant. Starbucks.

affordable housing: a form of shelter that is extremely rare in Vancouver, but is peppered throughout certain neighbourhoods and in adjacent municipalities such as Port Coquitlam and Surrey. Ant. most housing in Vancouver.

fleece: refers to both a fabric and a garment (usually a zippered jacket) that can be worn in any weather, any season, and on any social occasion. Usually worn with jeans, fleece is typically forest green or navy in colour with a prominent logo (eg. Columbia, North Face) on the front placket.

casual dress: typically jeans and a fleece (winter months) or khakis and a T-shirt (summer months). Hiking shoes or rubber sandals, often with velcro closures, complete the look. For women, yoga pants and tank tops, as well as capri pants, are common variants. Worn on all but semi-formal occasions, approximately 362 days of the year. Retail options: Mountain Equipment Co-Op, North Face, Lululemon.

semi-formal dress: a rare requirement in Vancouver, consisting of long-sleeved shirts and jeans or khakis (for men). Ties are not acceptable, nor is a jacket. For women, a skirt and a T-shirt with sandals, or occasionally low heels. Retail options: Spank, Aritsia. Ant. Dresses, especially long dresses or those made from silk, satin, or velvet.

great value for food: euphemism for some of the most overpriced food in Canada. Vancouver has many exclusive, gourmet restaurants, a smaller number of middle-range restaurants, and very little at the affordable end. Poor service can persist even to the high end. Similarly, grocery stores are uniformly overpriced, although some deals can be had at the smaller green grocers and in Chinatown.

Expo ’86: an international transportation fair held just after the worst recession in BC history (1981-83), which led to Vancouver’s rapid growth and development. Widely credited with being the best and worst thing to ever happen to the city.

2010 Olympics: an international sporting event discredited by most native Vancouverites, many of whom vacated the city for the 10-day period, leaving the Games to be celebrated by national and international tourists. Although locals disparaged the event, they did not lose a second in renting out apartments and condos to tourists at exorbitant rates.

11:00 pm: last call for bar patios on many of Vancouver’s main streets, except the bar-laden three-block section of Granville downtown. Time for bed so you can get up early for that hike tomorrow morning!

Toronto: Yoko to Vancouver’s Beatles, ie. the source of all discord in Lotusland. Some Torontonians have moved to Vancouver and infected it with their urban, workaholic, corporate vibe.

Ontario: Toronto.

Canada Day: a holiday largely celebrated by tourists in Vancouver.

Members of the Metrolinx board are appointed by the Minster of Transportation; they are not public officials elected by their municipalities. The current board, like the TransLink board in Metro Vancouver, is made up of mostly private sector business people who may or may not have conflicts of interest in transportation matters (ie. businesses that are located on a street with a proposed LRT line). Knowledge of transportation planning or experience taking public transit are not prerequisites; but to be fair, they never were, even when the board was made up of public officials. The Board can decide whether to hold meetings in public and how often to meet. There is no opportunity for the public to speak at meetings, even if they are allowed to attend, so there’s really no accountability for Metrolinx’ actions. The only recourse the public has is to complain to their MPP. But even if an MPP belongs to the party in power, they likely have no influence over who the Premier appoints as Minister of Transportation and who the Minister appoints to the Metrolinx Board.

It is bizarre that in Canada’s two largest cities, very small appointed boards decide the future of public transportation (11 sit on the TransLink board, and 15 on the Metrolinx board). It’s also a bit of an anachronism; we live in the area of downloaded responsibilities. The federal government offloads responsibility for housing and health care to the provinces; provinces download housing to the municipalities. Why would the province want such a tight grip on public transit provision? What is to be gained? Granted, these two boards are very short-lived so it’s hard to tell what their influence will be (Vancouver’s Canada Line notwithstanding). But like most transit advocates, I remain cynical about the whole issue of private-sector appointed boards making decisions about public spending, even if by some miracle they were actually public transit specialists. We need better governance in place for cities, especially on crucial issues like transportation and housing. Otherwise transportation board decisions will continue to be made as one-offs and there will be a lack of continuity in infrastructure projects and funding.

It appears that Richard Florida agrees with me. Higher rates of renting, public transit use and residential mobility are all key themes in Florida’s latest book, The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity, released two weeks ago (read a review of the book, and other Florida works and quirks, on Urbanophile). Florida belies the myth that housing is a good investment, particularly when it’s held for 20 or 30 years: the rate of return on housing in the US has generally been quite low, in fact from 1890 to 1990 it was exactly zero. We’ve all seen how difficult it can be to sell a house in recent years in the US, and in earlier recessionary times in Canada: my parents’ current house was bought for $20,000 less than a similar house a few blocks away because the owner had lost her job in the 1990s recession and had to sell quickly. A friend’s parents sold their house in 2007 for almost the same price they paid for it in the early 1980s because the mill in their town had closed, leaving most of the residents out of work.

Overinvestment in housing has decreased investment in other areas like medical technology, software and alternative energy. Florida has written before about the dangers of putting too many eggs in one basket: at the height of the mortgage crisis in the US (in a November 28, 2009 article in the Globe and Mail), he wrote that the mortgage system was directly responsible for the crisis, and that the era of overinvestment in homeownership and car ownership were over. Interestingly, Florida also applies his argument to individuals: Canadians carry more mortgage debt as a percentage of their disposable income than Americans, meaning we have far less to spend on other things. A friend of mine who works in mutual funds and investments tells me the average homeowner pays for their house two and a half times due to interest. This is probably no surprise to those of us living in the country’s biggest cities, where housing prices are astonomical and have not shown any decline in growth since the US mortgage crisis. In fact, housing prices in Canada increased 20% last year.

Florida argues that in cities with higher homeownership, unemployment is also higher because homeowners are less likely to pick up and move when things get tough. He believes that mobility is often the key to employment, and more flexible housing choices are key in times of economic instability. It seems there are other people out there like me, who prefer the flexibility of renting because we want to remain mobile and have no desire to live in one place for twenty years. We aren’t all that uncommon either: 40.1% of the Canadian population moved within the past five years, according to the 2006 Census; 14.1% moved within the last year. Florida correctly predicted that rental housing would play a major role in stabilizing the US economy after the mortgage crisis: families were able to move into foreclosed properties that were renovated and re-marketed as affordable rental housing. This was because the Obama administration wasted no time in investing $4.25 billion on the creation of tens of thousands of federally-subsidized rental units using the federal Making Homes Affordable program.

Vintage 1950s matchbooks featuring real estate ads

In his May 3rd article in the Globe and Mail, Florida goes as far as saying that “home ownership is an impediment to Canada’s long-term prosperity” because high house prices, low interest rates and lax government policies in Canada could spell trouble for the housing market. Even though people have been talking about the “bubble” for over fifteen years, Edward Jones’ recent report predicts Canada’s is about to burst. The federal government recently made it more difficult to get a mortgage and is considering other measures to tighten mortgage availability in order to protect the market from collapse. They eliminated the no down payment mortgage option before the US crisis began, but there is still a 5% down option. What is particularly interesting to me as a non-economist is how the housing market has historically been used to maintain or even increase consumer spending to stave off or recover from economic recession: besides the post-war era, we saw low interest rates brought in after the 1989 stock market crash in Canada and after 9/11 in the US to encourage people to keep buying homes. I guess there’s a fine line between “removing barriers to homeownership” to encourage spending and bringing on an economic meltdown by letting anyone with a a couple of bucks buy a house.

Massive marketing was required to sell the idea of homeownership as a stable, more respectable lifestyle choice. Let’s not forget that those first homes were practically given away at very low prices and low mortgage rates, their construction highly subsidized by federal governments in both the US and Canada. Those cherubic children, war brides and returning vets in 1940s suburban home ads were so convincing that most of us still believe homeowners are somehow better than renters: even Florida hints that switching from homeownership to renting might have “unforseen social costs” for cities and regions. Our own values and biases about homeownership drive the market. Yet a mere 60 years ago, renter households were the majority in both our countries.

The classic French text Un chez-moi à mon coût (2000) (edited by Eric Brassard), which I read at the urging of a fellow renter working at CMHC, carefully dissects all the economic myths of homeownership, arguing that it is often the non-economic factors that are the most influential. The book presents case studies of housing choices of a variety of professionals, both renters and owners, who argue that there is no sound economic argument for homeownership or against renting: it just comes down to personal preference. But we’re so invested in the homeownership ideal that investing in rental housing, or convincing middle-income families to rent, would take a lot of work. The tide may be turning in the US, but with high housing prices and fairly easy access to mortgages, we may not see this shift in Canada until our own mortgage crisis rears its ugly head.