Canada has five big private banks. Each one is enormously profitable. Part of that profit comes from lending money to people to buy homes. When one of the big five (in this case Scotiabank) goes on record to say that Canada needs more social housing for people with very low incomes, it’s an interesting development.
It is partly advice to the government about prudent long term money management. Right now, governments in Canada are providing cash transfers (in the form of social assistance and housing allowances) to people with very low incomes. That allows them to pay for housing in the private market. The author of the article linked below argues that adding to the social housing stock is an effective strategy to help the government spend less in the long term.
The article also makes the case that Canada’s supply of social housing is lower than the ‘standard’ when compared with peer countries. This includes Australia, the United Kingdom and the United States, all of which have a higher amount of social housing as a proportion of their housing stock than Canada.
In addition to explaining why more social housing is needed, the article gets into the how, calling for acquisition of existing privately owned rental buildings to add to the supply of social housing. There is a need for new housing as well, but it’s not as fast as purchasing existing stock.
To read more about why a bank supports social housing see scotiabank: Canadian Housing Affordability Hurts
The article is directly focussed at the Canadian housing situation, but the argument about risk management and for converting existing stock to social housing could be of interest in other jurisdictions.
See also a TVO interview with the author of the report: ‘The numbers aren’t adding up’: An Ontario economist on the urgent need for social housing
For additional arguments in favour of social housing from an international perspective, try: The OECD Recommends More Social Housing. It’s A Global Need
