Publicly financing housing.

Publicly financing housing construction is a must to bring down the cost of housing and make more money available to staff healthcare, education, and other public services, such as BC Ferries and mental health and addiction treatment, but this financing must absolutely be kept out of the hands of private developers.

Rather, a public agency (by definition not in the business of increasing rents at every opportunity) tasked with managing housing construction projects – what BC Housing should be – would end the extraction of huge sums from our local economy into inaccessible private hoards that are used to amass even greater war chests with which to exploit housing.

Public financing, in other words, satisfies only half of the equation. The other half is not-for-profit management of the finished product. This, in short, is the formula that defines social housing, a term that is broadly misunderstood to mean "housing for poor people," which social housing emphatically is not.

A Sept. 3, 2019, New Statesman article, "Inside the Vienna model of social housing," explains that "in the Austrian capital, more than 60 per cent of residents live in 440,000 social homes, about half owned directly by the municipal government and the rest by state-subsidised, not-for-profit co-operatives. These council houses are not built just for the low-paid, unemployed or hard up . . . The upper income threshold for a single person to qualify for a social home . . . would put you in around the 80th percentile, or the top 20 per cent of earners in the UK."

The claim is often made that "foreign investors" are behind out-of-control housing prices in BC, but this is cover for a fundamental flaw in BC's, and the entire financialized Western economies', for-profit housing model.

REITs, hedge funds, pension funds, private banks, and the entire financial system – not to mention for-profit real estate developers – all depend for their year-over-year increases in profitability, on increasing rents (house prices are derived from rents). Even municipalities' tax bases depend on escalating housing prices.

Chase every offshore speculator in BC real estate out of the province, and plenty of Canadian finance capital will and does keep the party going because the real culprits behind the unaffordability of housing in Canada are wealth inequality and provisions in the Canadian tax code that are responsible for it.

According to the Toronto Star on July 6, 2023, "The wealthiest 20% of households controlled nearly 68% of the total net worth in Canada in the first quarter of 2023, while the least wealthy 40% accounted for 2.7%."

A Jan. 15, 2023, Oxfam Canada report, "Richest 1% Bag Nearly Twice As Much Wealth As The Rest Of The World Put Together Over The Past Two Years," revealed that "For every $100 of wealth created in the last 10 years [in Canada], $34 has gone to the richest 1 per cent and only $5 to the bottom 50 per cent. This means that the richest 1 per cent have gained nearly seven times more wealth than the bottom 50 per cent in the last 10 years."

High net worth individuals justify this inequality with a Fraser Institute study, "Measuring Progressivity in Canada's Tax System, 2022," which concluded that the top 20% of income-earning families in Canada pay more than half of total taxes, including personal income, sales and property taxes (page 8).

But high net worth individuals' incomes derive mainly from capital gains, only 50% of which are taxed, and by a complex set of deductions, limits, and exemptions, that 50% are taxed at about half the rate on ordinary income. These rules withhold from the public purse a disproportionate share of the wealth controlled by the most affluent Canadians.

Net result is that, according to this chart, from a Feb.23, 2017, Institute for Research on Public Policy (IRPP) paper by David A. Green, W. Craig Riddell and France St-Hilaire, "Income Inequality in Canada: Driving Forces, Outcomes and Policy," "earnings of Canadians at the very top of the income distribution has far outpaced that of other income earners over the past three decades."

It is these capital gains that fuel speculation in Canada's housing markets.