Financialization of Community Residences – from LTCs to Apartment Buildings
Posted February 10, 2021
By Evan Sterling, Central Ottawa Member
February 8th, 2021
During the COVID-19 pandemic, there has been significant public criticism of privately-owned long-term care homes (LTCs) and retirement homes, particularly in Ontario. An analysis in the Canadian Medical Association Journal found that outbreaks in the first wave in privately-owned Ontario LTCs were almost twice as deadly as those in nonprofit or municipally-owned homes (Stall et al., 2020). One of the root causes of this tragedy is the same ownership strategy that is making life miserable for many working-class tenants across Ontario – the “financialization” of residences. According to Prof. Martine August of UWaterloo, in financialized homes, “There are no objectives to deliver better care, dignified environments or good workplaces, which should be paramount in the operation of seniors housing.” (August, 2020) She found that these financialized homes had an even higher death rate than the average for-profit home in the first wave.
What is financialization? Over the past 20 years, LTCs and retirement residences have been steadily acquired by large chains (such as Chartwell, Sienna, Revera, Extendicare and Amica), which are owned by pension funds, REITs, private equity funds, and investors. One of the largest, Revera, is solely owned by the federal Public Sector Pension Investment Board! (Skerrett, 2020). More than just ownership, “financialization” means that homes are viewed as assets that deliver dependable investor dividends, rather than as homes and properties. Staffing and expenses are cut to the bone.
This is the same type of strategy that REITs have been using to financialize apartment housing across Canada, in which “housing is treated as a financial asset at the expense of people who need it as shelter” (Fung, Parikh, and Zulauf, 2020). Maintenance is cut, homes are left to decay, and property managers pursue an aggressive strategy of Above guideline Increases (AGIs), making tenants pay extra for capital repairs. In Ontario, one owner, CAPREIT, applied for AGIs for 26% of its units in 2019, and turns over 19% of its units annually. (ACORN Canada, 2020). It has resulted in displacement and de facto eviction of many tenants to deliver higher profits for investors who never even know the names of the buildings they own.
Dr. Amit Arya, a palliative care physician in Ontario, commented to Yahoo! News that “It is about prioritizing profit over people. That’s the whole principle when we’re running any sector like a business. What will happen is that any extra money that’s in the system will not be reinvested into the care of the people….” (Hughes, 2020).
As tenants in rental housing, our homes should be prioritized over profit margins.
Sign our online action to fight back against the financialization of our housing: bit.ly/3pKq5ny
References
ACORN Canada. (2020, November 9). ACORN CAPREIT Tenant Union Platform. https://acorncanada.org/resource/acorn-capreit-tenant-union-platform
August, M. (2020, July 26). The coronavirus exposes the perils of profit in seniors’ housing. The Conversation. http://theconversation.com/the-coronavirus-exposes-the-perils-of-profit-in-seniors-housing-141915
Big for-profit long-term-care companies paid out more than $170 million to investors through Ontario’s deadly first wave. (2020, December 26). Toronto Star. https://www.thestar.com/news/gta/2020/12/26/big-for-profit-long-term-care-companies-paid-out-more-than-170-million-to-investors-through-ontarios-deadly-first-wave.html
Fung, C., Parikh, S., & Zulauf, P. (2020). THE AFFORDABLE RENTAL HOUSING CRISIS IN TORONTO (14 p.). Ryerson University. https://www.ryerson.ca/content/dam/social-innovation/Programs/AffordableHousing-Report.pdf
Hughes, S. (2020, September 21). “Profit over people”: The business of Canada’s for-profit long-term care sector called into question. Yahoo News. https://ca.finance.yahoo.com/news/profit-over-people-the-business-of-canadas-forprofit-longterm-care-sector-called-into-question-095525034.html
Oved, M. C. (2021, January 27). Pension plans own millions of shares in Ontario long-term-care homes, where COVID-19 has killed thousands. Now, some are pulling their money out of the for-profit facilities. Toronto Star. https://www.thestar.com/news/investigations/2021/01/27/pension-plans-own-millions-of-shares-in-ontario-long-term-care-homes-where-covid-19-has-killed-thousands-now-some-are-pulling-their-money-out-of-the-for-profit-facilities.html
Ritts, M. (2020, November). Elder Care Should Not Be About Making Profits. Jacobin Magazine. https://jacobinmag.com/2020/11/ontario-canada-long-term-care-covid-coronavirus
Skerrett, K. (2020, September 12). Pension Fund Capitalism and the COVID-19 Pandemic: The Case of Revera – The Bullet. Socialist Project. https://socialistproject.ca/2020/09/pension-fund-capitalism-and-covid19-pandemic-revera/
Stall, N. M., Jones, A., Brown, K. A., Rochon, P. A., & Costa, A. P. (2020). For-profit long-term care homes and the risk of COVID-19 outbreaks and resident deaths. CMAJ, 192(33), E946–E955. https://doi.org/10.1503/cmaj.201197
The problem with profits: As Ontario’s long-term-care homes stagger under a COVID death toll of more than 3,000, some say it’s time to shut down for-profit homes for good. (2021, January 26). Toronto Star. https://www.thestar.com/business/2021/01/26/the-problem-with-profits-as-ontarios-long-term-care-homes-stagger-under-a-covid-death-toll-of-more-than-3000-some-say-its-time-to-shut-down-for-profit-homes-for-good.html