The Political Dance Issue

It’s an interesting dance to watch!

The dance of the politicians goes like this:

The opposition politicians seize a hot item topic and start the dance, spinning the problem -like the housing shortage- and tying everything back to a topic like immigration. The other team gets all indignant and puffed up, countering that it’s way more complicated than the opposition puts it out to be. The result? Lots of posturing, energy expended, and the inertia is not broken.

Pierre Poilievre: The Conservative Leader has repeatedly linked immigration to housing shortages, stating “It’s very simple math. If you have more families coming than you have housing for them, it’s going to inflate housing prices”. He has emphasized the need to align immigration numbers with the available housing stock, healthcare, and job opportunities.

Justin Trudeau’s Government: The Liberal government has acknowledged that increased immigration is contributing to the housing crisis. They have discussed managing the demand for housing through a more sustainable immigration strategy, including imposing cutbacks on student visas and temporary workers.

Sean Fraser (Former Housing Minister): Fraser admitted that programs like the temporary foreign workers and international student programs are exacerbating the housing crisis. He highlighted the need for changes in these programs to address their impact on housing availability.

And while everyone is talking about the problem, I haven't seen anyone come up with a solution.

There are plenty of locations owned by various levels of government where housing could be built (which would start to solve the problem by supplying housing to hard-working people), but the developers can't raise the capital to get these projects off the ground. Everyone associated with this type of housing, especially the lenders and VC funds that backstop these projects, want astronomical returns.

There are many examples of funds being raised almost overnight for projects like Open AI, which raised 6.5 Billion Dollars. This company and others like it will need, and use, a lot of real estate, and an unfathomable amount of energy. The only things living inside this real estate will be the machines we are building to automate our lives.

We excel at securing funding for intangible tech assets, yet we struggle to attract investment for tangible infrastructure -like housing- needed to support the communities and workforces behind these unicorn companies. Building affordable, quality homes simply isn’t considered “sexy” by the private sector. It’s evident that unless a deal offers significant financial incentives, those holding the purse strings won’t loosen them out of a moral obligation to support their communities any time soon.

So, if it doesn't make sense for the private sector, our government should step up. Much like they did at the end of the 2nd world war. It’s worth noting that The Canada Mortgage and Housing Company (CMHC), the bolding is my emphasis, was started by the federal government to alleviate the housing shortage for all of the returning veterans.

It would be relatively easy for the government to make money by building, financing, and selling homes to hard-working people from all walks of life. The average cost of a house in Canada is currently $696,000. Building efficient, smaller family sized homes on land already owned by the government should allow them to do something under that average price. We have the land, and even accounting for government inefficiencies, and lower profit requirements- this shouldn’t be a massive problem to solve.

So, instead of sitting in the peanut gallery, slinging slurs, and pointing fingers, our elected officials might want to step up and recognize this opportunity as a great investment with a return more significant than another data centre or ChatGTP.

Until next week. Thank you for being a subscriber.

Paul Fitzpatrick

Appointment Calendar: https://calendly.com/homegrouprealty

Want to search for opportunities in your area?

Search for Homes Here