The housing crisis is driven by REITs (Real Estate Investment Trusts). These are corporations listed on the stock market. They buy up housing and rent it out for high prices and mediocre maintenance. They can outbid most people trying to enter the market, including individuals who want to invest in a revenue property. And those who do outbid the REITs are forced to charge the same exorbitant rent just to pay their inflated mortgages. There is a solution.
The most conservative estimate is that REITs now own over 30% of rental property in B.C., with other estimates as high as 41%. It is safe to say that one-third of rental housing is permanently out of circulation for buyers. Renters are at the mercy of REITs who have escalated rental costs dramatically.
In the past, REITs invested in commercial real estate. In the ’90s they began investing in residential communities. As their size and momentum grew, they moved into major centres across Canada. Government did nothing to stop this.
Two factors put millions of citizens at risk if government moves to curtail REITs. Investment funds are heavily into REITs; and people have borrowed against their inflated housing values. So governments avoid talk about them, and mainstream media seeks other reasons to account for the housing crisis.
In 2001, when the BC Liberals came into power, they cancelled the 1,200 units per year of affordable housing the province used to build. But, even if government builds affordable housing, we risk it being privatized and sold – to the REITs!
To solve the housing crisis, Canada and the provinces must focus funding on the National Cooperative Housing Program because cooperative housing is protected from the market and well maintained.
Co-op housing builds communities. People buy a membership in the co-op and also volunteer. The members pay no more than a certain percentage of their monthly income – in my day it was 30%. Cooperative housing mandates a diverse mix of incomes and abilities.
This housing solution provides thousands of Canadians with healthy homes, community, and long-term, stable housing. Young families can plan to save for retirement, their kids’ education, etc. Neighbours look out for neighbours.
REITs are a disaster. The Canada Cooperative Housing is a huge success. Let’s focus on co-op housing for everyone’s sake.
Jessica Van der Veen
Oak Bay
