Vancouver Sun: Douglas Todd: NDP goes after housing ‘profiteers’ in cabinet and big business
Posted May 18, 2023
Analysis: “Politicians are profiteering on housing,” says the NDP’s Jenny Kwan, as Canada’s housing minister buys a second rental apartment.
It’s time to make life difficult for federal politicians and big corporations that “profiteer from housing,” says the federal NDP’s housing critic.
Liberal cabinet ministers who play the real-estate market for personal gain — and the giant housing corporations to which they have given massive tax breaks — need pushback, says Vancouver East MP Jenny Kwan.
The veteran MP, who this week debated Housing Minister Ahmed Hussen in the House of Commons, joins Conservative MPs in finding it “strange” that Hussen refuses to admit Canada faces a housing crisis — at the same time he has recently bought a second apartment to rent out.
The fact the housing minister owns two Ottawa rental units, and that one third of his fellow Liberal cabinet ministers own two or more dwellings, Kwan said, helps explain why the federal Liberals’ so-called “housing strategy” is failing.
“Politicians are profiteering on housing,” Kwan said in an interview.
“You always have to ask of people in government: ‘Where are their interests and where are their blind spots?’ Their severe blind spots are motivated, I think, by their own investment practices.”
The unacknowledged self-interest of politicians can explain why the Liberals, and the Conservatives before them, have encouraged the creation of real estate investment trusts, commonly known as REITs, through which corporations “make a killing,” Kwan said.
“Real estate investment trusts enjoy preferential tax treatment, and the seven largest REITs alone have saved a combined $1.5 billion through federal tax loopholes,” Kwan said in her private member’s bill.
The NDP is calling for a moratorium “on the acquisition of affordable homes by financialized landlords, including REITs and corporate firms” — and for REITs’ tax rebates to instead go into social housing.
In the House of Commons on Tuesday, however, Hussen refused to respond to Kwan’s demand for a moratorium on corporations buying up affordable rental stock.
That’s despite Kwan’s argument that “the 25 largest financialized landlords held more than 330,000 units last year, which is nearly 20 per cent of the country’s private purpose-built stock of rental apartments.”
The problems created by REITs are aggravated by the way corporations frequently snap up low-cost houses and apartments en masse, Kwan said. They then often renovate the units and re-rent them at higher prices. Such practices, Kwan said, contribute to the average rent for a one-bedroom unit coming in at about $2,600 in Metro Vancouver and Greater Toronto.
Kwan joined Conservative MPs, such as Tracy Gray (Kelowna—Lake Country) and Scott Aitchison (Parry Sound—Muskoka), in expressing dismay that Hussen refused at a recent committee hearing to agree there is a “housing crisis.”
“We were trying to figure out what’s wrong with him. Everyone knows we have a housing crisis. But he just couldn’t say those words. It was strange. We all just kind of looked at him and asked, ‘Is the minister so completely out of touch that he doesn’t even realize there’s a severe housing crisis?’ Or is he just stuck in the message box he was given?”
Asked on Tuesday whether Hussen is willing to acknowledge there is a housing crisis in Canada, an official for his ministry, who asked not to be named, released an email statement Thursday saying, “Minister Hussen recognized the housing affordability crisis that exists in Canada long before some Conservative politicians recently began to wake up to that fact.”
Hussen also told Kwan in the House of Commons this week he agreed with her that the “financialization of housing” is a concern.
“We know that a number of factors are making housing more expensive,” he said, “but the biggest issue is supply.”
This April, after buying his second rental apartment, Hussen appeared on TVO’s The Agenda and was called out by host Steve Paikin for being a landlord as well as the housing minister. He was asked if he felt in a conflict of interest.
“Not really. … I’m happy to be contributing to the housing supply,” Hussen replied.
Despite targeting the government in power, Kwan isn’t about to let Conservatives off the hook, since the party under then-prime minister Stephen Harper strengthened tax-break legislation for REITs.
And, as others have pointed out, Ottawa’s official ethics disclosure statements show Conservative leader Pierre Poilievre owns a rental property in Ottawa and co-owns a real estate investment company in Calgary.
Last year, 62 Liberal MPs (including Prime Minister Justin Trudeau) received money from investment properties, as did 54 Conservative MPs; six Bloc Quebecois MPs, and four NDP MPs (not including leader Jagmeet Singh).
Despite supporting social housing, Kwan said Ottawa cannot come anywhere near to building non-profit rentals fast enough to replace the privately owned affordable units being lost to “financialized landlords” who hike rents.
Citing Carleton University’s Steve Pomeroy, Kwan said Canada is losing 15 affordable housing units for every single new social-housing unit built. That’s based on data Pomeroy collected between 2011 and 2016 showing 322,000 affordable rental units had become unaffordable.
Unlike most businesses, Kwan said REITs do not pay corporate taxes “as long as they return all their profits back to the shareholders. And of course they would return their profits to their investors. What else are they going to do with it?”
On another housing front, Kwan is trying to change how tenants often find it impossible to learn the names of their landlords.
Her private member’s bill seeks to “mandate landlords to disclose property ownership,” since Kwan said many people who own rental housing hide their identities through numbered companies.
That includes some politicians in Metro Vancouver, such as Liberal MP and developer Sukh Dhaliwal (Surrey-Newton), who has 11 numbered real estate companies, and Liberal MP Randeep Sarai (Surrey-Centre), who has two numbered housing companies.
The Liberal government has declared housing a “basic human right,” said Kwan. But so far its policies have been directly fuelling increases in shelter prices.
It’s easy to agree Ottawa’s housing oratory doesn’t come close to matching its actions.
Article by Douglas Todd for Vancouver Sun