Transcript: The Financialization of the Housing Market | Mar 03, 2020

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a gray suit, white shirt, and gray tie.

A caption on screen reads "The financialization of the housing market. @spaikin, @theagenda."

Steve says THE COST OF HOUSING... RENTING OR BUYING IT... SEEMS TO GO IN ONLY ONE DIRECTION LATELY, AND THAT'S UP AND UP AND UP. AND WHILE THAT'S MAKING IT TOUGH FOR MANY TO KEEP A ROOF OVER THEIR HEADS, IT'S PROVIDING TIDY RETURNS TO INVESTORS, ACCORDING TO A DOCUMENTARY HAVING ITS CANADIAN PREMIERE TONIGHT ON TVO, RIGHT AFTER THIS PROGRAM. THE DOC IS CALLED "PUSH," AND IT MAKES THE CONNECTION BETWEEN PROFITS AND THE AFFORDABILITY CRISIS. WITH US NOW TO DELVE INTO THE DETAILS, WE WELCOME: BENJAMIN TAL, HE IS THE DEPUTY CHIEF ECONOMIST, CIBC CAPITAL...

Benjamin is in his late fifties, clean-shaven, with short, receding gray hair. He's wearing a gray suit, white shirt and striped purple tie.

Steve continues DIANA PETRAMALA, SENIOR RESEARCHER AT RYERSON UNIVERSITY'S CENTRE FOR URBAN RESEARCH AND LAND DEVELOPMENT...

Diana is in her forties, with shoulder-length wavy brown hair. She's wearing glasses, a gray suit and a black blouse.

Steve continues MARTINE AUGUST, ASSISTANT PROFESSOR IN THE SCHOOL OF PLANNING AT THE UNIVERSITY OF WATERLOO...

Martine is in her early thirties, with short brown hair. She's wearing glasses, a light gray sweater and a white shirt.

Steve continues AND SHAUN HILDEBRAND, PRESIDENT OF THE REAL ESTATE MARKET RESEARCH FIRM, URBANATION.

Shaun is in his forties, clean-shaven, with short white hair. He's wearing a gray suit, white shirt and dark blue tie.

Steve continues WE ARE HAPPY TO WELCOME ALL OF YOU HERE TO TVO TONIGHT FOR THIS CONVERSATION. I KNOW THAT YOU HAVE ALL SEEN THE DOCUMENTARY, RIGHT, THAT IS AIRING IMMEDIATELY THEREAFTER. YOU GOT A SNEAK PEEK. AND I THINK TO SET UP OUR CONVERSATION AND THEN MAYBE WHET THE APPETITE OF THE VIEWERS TO COME, I'D LIKE TO GET JUST SOME INITIAL IMPRESSIONS. MARTINE, WHY DON'T YOU START US OFF? WHAT WAS THE MOST SALIENT FACT THAT EMERGED FOR YOU HAVING SEEN IT?

The caption changes to "Martine August. University of Waterloo."
Then, it changes again to "Impressions of 'PUSH.'"

Martine says I THINK THE MAIN POINT THAT THEY'RE TRYING TO MAKE IN THIS DOCUMENTARY, WHICH I REALLY TOOK AWAY FROM IT, IS POINTING AT THE WAY OF HOUSING, WHICH MANY OF US VIEW AS A HOME, SOMETHING THAT OUGHT TO BE A HUMAN RIGHT, THAT'S THE CASE MADE IN THE FILM.

Steve says THIS IS THE U.N. RAPPORTEUR.

Martine says IT FOLLOWS HER AND THE RISING INVESTMENT ACROSS THE GLOBE. THE KEY POINT SHE IS TRYING TO MAKE IS THE WAY WE'RE INCREASINGLY SEEING HOUSING AS A HOME, NOT AS A FINANCIAL ASSET, SOMETHING THAT IS PRIMARILY BEING USED TO DRIVE PROFITS FOR INVESTORS, AND THAT IS HAVING REALLY NEGATIVE IMPACTS ON PEOPLE, ON COMMUNITIES, AND DRIVING AFFORDABILITY AND SOCIAL AND SPATIAL INEQUALITY.

Steve says GOOD. SHAUN, WHAT DID YOU TAKE AWAY?

The caption changes to "Shaun Hildebrand. Urbanation."
Then, it changes again to "'PUSH' Tonight 9 PM. Also streaming at TVO.org/documentaries."

Shaun says I THOUGHT THAT THE DOCUMENTARY DID A VERY GOOD JOB OF HUMANIZING THE ISSUE. I THINK REALLY THE POINT WAS, WHEN YOU GO THROUGH MASSIVE HOUSING BOOMS LIKE WE HAVE GLOBALLY, THERE'S GOING TO BE COLLATERAL DAMAGE AND THERE'S GOING TO BE UNINTENDED CONSEQUENCES. AND BEING ABLE TO TELL THE STORIES OF THE INDIVIDUALS WHO HAVE BEEN IMPACTED THE MOST BY THIS I THINK WAS REALLY POWERFUL. I PARTICULARLY ENJOYED SOME OF THE STATISTICS THAT THEY SHOWED. AS SOMEONE WHO COLLECTS DATA, I THOUGHT THAT THE DOCUMENTARY DID A GOOD JOB OF KIND OF TELLING A STORY WITH SORT OF HUMAN CASES AS WELL AS USING SOME OF THE DATA. I THINK PERHAPS WHAT I WOULD HAVE LIKED TO HAVE SEEN MAYBE A LITTLE BIT MORE IS A LITTLE BIT MORE FOCUS ON SOME OF THE POLICIES THAT HAVE BEEN TRIED IN THE PAST TO HELP CORRECT FOR, YOU KNOW, THE HOUSING AFFORDABILITY SITUATION THAT WE HAVE ACROSS THE GLOBE. YOU KNOW, SORT OF THE DOCUMENTARY ENDED ON AN OPTIMISTIC NOTE IN THAT THERE IS A LOT OF THESE CONVERSATIONS THAT ARE STARTING TO BE HAD REALLY ACROSS THE GLOBE, AND WE CAN KIND OF TRY TO LINK THAT BACK TO WHAT'S HAPPENING HERE IN CANADA WHERE THE FEDERAL GOVERNMENT AND THE PROVINCIAL GOVERNMENT AND THE MUNICIPAL GOVERNMENTS ARE ALL SORT OF TALKING ABOUT AFFORDABLE HOUSING NOW AND MAKING IT THE TOP OF THEIR AGENDA.

Steve says DIANA?

The caption changes to "Diana Petramala. Ryerson University."

Diana says I FOUND IT REALLY INTERESTING THE CONVERSATION DIVIDING HOUSING... OR TALKING ABOUT HOUSING AS A SOCIAL GOOD AND NOT A FINANCIAL ASSET, WHEREAS HERE IN CANADA, WE TREAT IT AS A FINANCIAL ASSET. SO THERE IS PREDOMINANTLY OUR HOUSING SUPPLY COMES THROUGH SOME FORM OF INVESTMENT AND PROFIT-SEEKING, EITHER WHETHER IT BE DEVELOPERS IN DEVELOPMENT OR INVESTORS COMING IN, BUILDING PURPOSE-BUILT RENTALS. SOMEONE IS INVESTING IN THAT ASSET WITH THE ANTICIPATION OF MAKING A RETURN. WE CAN'T EXPECT THEM TO DO IT FOR FREE AND THE GOVERNMENT SPENDS VERY LITTLE ON HOUSING. SO I'M NOT SURE WHY WE EXPECTED OUTCOMES TO BE ANY DIFFERENT IN THAT ENVIRONMENT. I DO FEEL THAT THERE ARE SOME CHALLENGES, BUT THERE'S ALSO A LOT OF OPPORTUNITIES WITH THE FINANCIALIZATION OF HOUSING, ONE BEING A LOT OF OUR RENTAL STOCK NOW IS COMING FROM SOME OF THIS INTERNATIONAL INVESTMENT AND CONSTRUCTION OF PURPOSE-BUILT RENTALS NOW AT THE HIGHEST LEVEL SINCE 1992.

Steve says COMING BACK BIG TIME, ISN'T IT?

Diana says YEAH. AND A LOT OF THE DEVELOPERS, IF THEY WANT TO BUILD A DEVELOPMENT, THEY RELY ON THAT INVESTMENT IN PRE-DEVELOPMENT STAGES IN ORDER TO GET THEIR FINANCING. THEY HAVE TO SELL 80 PERCENT OF THE DEVELOPMENT BEFORE THEY CAN GET THEIR FINANCING. AND SO... AND 50 PERCENT OF THOSE CONDOS THAT THEY'RE BUILDING IS BEING ADDED TO THE RENTAL STOCK. SO IT IS A REALLY IMPORTANT FACTOR HELPING TO DRIVE SUPPLY NOW. SO I WORRY ABOUT PENALIZING IT WHEN THERE'S ALSO OPPORTUNITIES FROM THE FINANCIALIZATION OF HOUSING.

Steve says SPEAKING OF FINANCING, SHALL WE HEAR FROM THE BANKER? OKAY, BENJAMIN, YOUR VIEW?

The caption changes to "Benjamin Tal. CIBC Capital Markets."

Benjamin says FIRST, I THINK IT WAS A WONDERFUL DOCUMENTARY, AND I THINK THAT VIEWERS SHOULD STICK AROUND AND ACTUALLY WATCH THE DOCUMENTARY. IT'S A BEAUTIFULLY DONE DOCUMENTARY. IT TELLS A STORY. THE HUMAN FACE OF THE CRISIS WE CALL REAL ESTATE AT THIS POINT. WE ALSO KNOW FROM THIS DOCUMENTARY, THIS IS NOT JUST ABOUT TORONTO AND VANCOUVER. WE ARE NOT SO SPECIAL. IT'S EVERYWHERE. THIS IS VERY IMPORTANT TO UNDERSTAND. I TOTALLY AGREE WITH SHAUN THAT WHAT'S MISSING, AND MAYBE THAT WAS NOT THE PURPOSE OF THIS DOCUMENTARY, IS SOLUTIONS. THIS IS A VERY GOOD TALE OF THE PROBLEM WITHOUT DISCUSSING POTENTIAL SOLUTIONS.

Steve says THAT'S GOING TO BE OUR JOB OVER THE NEXT HALF AN HOUR.

Benjamin says IT WAS A WONDERFUL DOCUMENTARY.

Steve says LET'S WHET THE APPETITES A BIT MORE, SHALL WE? HERE IS A SHORT SNIPPET FROM "PUSH" ON IMMEDIATELY AFTER THIS PROGRAM. SHELDON, THE CLIP, IF YOU WOULD.

A clip plays on screen with the caption "Push. 2020."
In the clip, an animated chart shows that wages fluctuate around the same level whereas home prices have been soaring non-stop.

The caption changes to "Toronto."

A young man says A NEW OWNER CAME, TOOK POSSESSION OF THE BUILDING. THEY WERE BREAKING LOCKS FOR THE MAIN ENTRANCE TO THE BUILDING. THEY WERE PHYSICALLY PUSHING THEIR WAY INTO PEOPLE'S APARTMENTS UPSTAIRS.

A young blond woman says I HEAR STORIES OF NURSES AND DOCTORS AND POLICE OFFICERS AND FIREFIGHTERS WHO ARE UNABLE TO AFFORD TO LIVE IN THE CITY WHERE THEY'RE SUPPOSED TO BE GUARDING AND HELPING.

She reads from a piece of paper and says
I'M GIVING YOU THIS NOTICE BECAUSE I WANT TO END YOUR TENANCY.

A male voice says THEY CAME AFTER HER WITH THE HARDEST, HARDEST CATEGORY THEY COULD.

A man in his fifties says THE NEIGHBORHOOD IS GETTING GENTRIFIED. IT'S MOVING. IT'S COME RIGHT UP TO KING AND DUFFERIN. AND IT'S ONLY ONE DIRECTION, INTO OUR NEIGHBOUR, AND WE'RE IN THE WAY.

A caption appears on screen. It reads "Saskia Sassen. Professor, Columbia University."

Saskia, in her sixties, says WHEN I HEAR PEOPLE TODAY SAYING, IT'S DENSIFICATION, ONE REACTION IS, IF ONLY. IT'S MUCH DEEPER THAN THAT.

The blond woman says HOUSING HAS BECOME OVERLY FINANCIALIZED. SO IT'S LIKE GOLD.
BUT GOLD IS NOT A HUMAN RIGHT. HOUSING IS.

The clip ends and an image of the chart showing wages and home prices appears on screen.

Steve says NOW, YOU MAY HAVE SEEN THIS CHART RIGHT AT THE VERY BEGINNING OF THE CLIP, AND IF YOU'RE LISTENING TO THIS RIGHT NOW ON PODCAST, LET ME JUST DESCRIBE IT A LITTLE BIT FOR YOU. IT'S A GRAPH. THERE ARE TWO LINES ON THE GRAPH. THE BOTTOM LINE IS WAGES, AND THAT IS ESSENTIALLY A STRAIGHT LINE, A STRAIGHT LINE ACROSS. THE SECOND LINE IS HOME PRICES, AND THAT ONE IS ON A 45-DEGREE ANGLE, AND YOU CAN SEE THAT AS TIME GOES BY, THERE IS AN INCREASING MISMATCH BETWEEN WHAT THE PRICE OF A HOME COSTS AND WHAT PEOPLE EARN AND ARE THEREFORE ABLE TO AFFORD. WE'VE GOT A COUPLE OF NUMBERS HERE WE CAN ADD TO THAT. THE AVERAGE FAMILY INCOME HAS RISEN BY 133 PERCENT. THE AVERAGE HOME PRICE HAS RISEN BY 425 PERCENT, THIS IN THE GREATER TORONTO AREA. AGAIN, YOU SEE THE MISMATCH THAT GOES ON HERE. BENJAMIN, LET ME FOLLOW UP WITH YOU. IF HOUSING PRICES ARE RISING SO MUCH MORE QUICKLY THAN WAGES ARE ABLE TO PURCHASE, WHAT DOES THAT TELL US ABOUT THE STATE OF THE HOUSING MARKET?

The caption changes to "Benjamin Tal, @cibc."
Then, it changes again to "Cash looking for yield."

Benjamin says THAT'S UNSUSTAINABLE. THAT'S WHAT WE KNOW. BUT THE ISSUE IS THE WORLD AVERAGE, AVERAGE WAGE. AND AS WE KNOW FROM HIGH SCHOOL MATHEMATICS, IT DOESN'T TELL YOU THE WHOLE STORY. WE KNOW THAT THE INCOME GAP IN CANADA, IN THE U.S., IN EUROPE IS WIDENING AT A RATE WE HAVEN'T SEEN BEFORE. THAT'S THE MAIN ISSUE. THE FOCUS IS ALWAYS ON DEBT, HOW MUCH DEBT PEOPLE TAKE IN ORDER TO BUY THIS HOUSE. IT'S NOT ON INCOME. THE DEBT-TO-INCOME RATIO IS AT 170 percent, A RECORD HIGH. EVERYBODY IN CANADA KNOWS THIS NUMBER. I THINK IT SHOULD BE PART OF THE CITIZENSHIP TEST OR SOMETHING. BUT THE ISSUE ALSO MUST BE INCOME. INCOME IN CANADA IS NOT RISING. TWENTY YEARS FROM NOW, WHEN PEOPLE STUDY THIS GREAT RECESSION AND THE BIG EXPANSION, THEY WILL REALIZE THAT WHAT WAS DEFINING THIS EXPANSION IS NOT TRUMP, NOT EVEN TRADE, IT IS THE DEMISE OF THE WAGE MECHANISM. MANY PEOPLE ARE ABLE TO BUY REAL ESTATE IN TORONTO, IN VANCOUVER BECAUSE THEY HAVE THE INCOMES. BUT MANY PEOPLE CANNOT. THE MISMATCH THAT YOU WERE TALKING ABOUT IS THE MISMATCH IN THE LABOUR MARKET. PEOPLE WITHOUT JOBS AND JOBS WITHOUT PEOPLE. THIS INCOME GAP IS ACTUALLY BEING REVEALED IN THE REAL ESTATE MARKET WHERE PEOPLE WHO CAN AFFORD IT BUY, BUY EXPENSIVE, AND THEY CAN DO THAT. BUT MANY PEOPLE CANNOT DO THAT. THAT'S THE STORY.

Steve says SHAUN, SINCE YOU'RE THE DATA GUY HERE, I WANT YOU, IF YOU CAN, TELL US, DO YOU HAVE ANY IDEA WHAT PERCENTAGE OF PEOPLE ARE BUYING HOMES TO LIVE IN AND WHAT PERCENTAGE OF PEOPLE ARE BUYING HOMES AS AN INVESTMENT VEHICLE?

The caption changes to "Shaun Hildebrand, @Urbanation."

Shaun says WITHIN THE CONDO MARKET WHERE MOST OF THE INVESTMENT ACTIVITY IS FOCUSED, ABOUT 35 PERCENT OF THE ENTIRE CONDO STOCK IS INVESTOR-OWNED. WITHIN THAT, ABOUT 14 TO 15 PERCENT IS FOREIGN OWNED, AND ACTUALLY AN INTERESTING STAT IS THAT ABOUT 5 PERCENT OF THAT STOCK IS ACTUALLY EMPTY AND YOU CAN SORT OF RELATE THAT BACK TO ONE OF THE INTERESTING STATS FROM THE DOCUMENTARY THAT SHOWED THAT 80 PERCENT OF PROPERTIES IN LONDON WERE FOREIGN-OWNED.

Steve says WASN'T THAT SHOCKING?

Shaun says AND THEY'RE EMPTY.

Steve says YOU'VE GOT THAT STANDING BY? LET'S PLAY THAT RIGHT NOW SINCE YOU'VE TOUCHED ON THAT. WHEN YOU SEE THAT MAP, THAT IS REALLY AN ASTONISHING THING. SHELDON, LET'S ROLL THAT ONE TOO.

Another clip from the documentary plays, in which a man in his sixties stands on a street and says THIS PLACE IS NOW A BIT OF A DEAD ZONE WITH VERY LITTLE INDICATION OF WHO THE OWNERS ARE. AND A LOT OF THEM ARE COMPLETELY EMPTY, SO YOU CAN'T GO AND ASK THEM WHO THEY ARE. THEY ARE ACTUALLY JUST EMPTY ALL THE TIME.

(music plays)

A map of London appears with red spots marking the properties owned by foreign companies. As we zoom out of the map, thousands of spots appear throughout downtown London.

The clip ends.

Steve says NOW, THAT'S IN LONDON U.K. WHERE 80 PERCENT OF THE PROPERTIES ARE EMPTY AND AGAIN IF YOU'RE LISTENING ON PODCAST, WE'RE LOOKING AT A MAP OF THE CITY OF LONDON, AROUND REGENTS PARK, AND THERE ARE RED DOTS SCATTERED ALL OVER THIS MAP. IT ALMOST OVERWHELMS THE MAP. ARE WE FAR AWAY FROM THIS IN THE GREATER TORONTO AREA?

Shaun says YEAH, I DON'T THINK WE'RE THERE.

Steve says WE'RE NOT THERE.

Shaun says NO. CERTAINLY WE HAVE A HIGH PERCENTAGE, PARTICULARLY IN THE DOWNTOWN CORE OF CONDOMINIUM UNITS THAT ARE OWNED BY INVESTORS. IT'S PROBABLY CLOSER TO ABOUT 50 percent WHEN YOU LOOK AT A DOWNTOWN CONDO BUILDING. BUT AS DIANA ALLUDED TO, WE'VE BEEN ALMOST ENTIRELY RELYING ON THESE CONDO INVESTORS TO SUPPLY RENTAL UNITS TO THE MARKET BECAUSE WE HAVEN'T BEEN BUILDING TRADITIONAL MARKET RATE PURPOSE BUILT HOUSING FOR 35 YEARS. BASICALLY WHAT YOU SEE IS WHEN A CONDO REACHES COMPLETION, FULLY HALF OF THE UNITS GO DIRECTLY INTO THE RENTAL MARKET, AND THEY'RE ABSORBED VERY QUICKLY, BUT WHAT WE'RE RECOGNIZING IS THAT, EVEN WITH ALL OF THIS CONDO BUILDING THAT'S BEEN HAPPENING AND ALL OF THIS CONDO INVESTMENT THAT'S BEEN OCCURRING, IT HASN'T BEEN ENOUGH TO SATISFY DEMAND BECAUSE THE RENTS KEEP RISING. THE AVERAGE RENT FOR A CONDOMINIUM IN TORONTO IS 2500 dollars A MONTH AND IT'S RISEN BY 35 PERCENT IN THE LAST THREE YEARS.

Steve says FOR WHAT SIZE APARTMENT?

Shaun says THIS WOULD BE 650 SQUARE FEET. A TWO-BEDROOM WOULD RUN YOU CLOSER TO AROUND 2800 dollars A MONTH. AND WE'VE BEEN RELYING ON THESE CONDO INVESTORS TO CONTINUE TO DO THIS. THE ISSUE IS THAT WE SORT OF VIEW THIS AS SOMEWHAT PRECARIOUS SUPPLY IN THE SENSE THAT YOU'RE RELYING ON MOM AND POP INVESTORS TO SUPPLY RENTAL UNITS TO A POPULATION THAT'S SEEING THE HIGHEST LEVELS OF RENTAL DEMAND THAT WE'VE SEEN IN A GENERATION, AND WHEN WE LOOK AT THE FINANCIAL SITUATION OF THESE CONDO INVESTORS, THEY'RE BARELY BREAKING EVEN ON A CASH FLOW BASIS AND IT WILL BECOME MORE CHALLENGING AS PRICES CONTINUE TO RISE.

Steve says LET'S STOP THERE FOR A SECOND. DIANA, CAN YOU TALK TO US ABOUT WHAT YOU THINK THE IMPLICATIONS OF THAT MAP ARE?

Diana says OF PRICES CONTINUING TO GO UP AND HOUSING CONTINUING TO BECOME UNAFFORDABLE?

Steve says OF ALL OF WHAT HE JUST SAID, PARTICULARLY AS IT RELATES TO LOTS OF EMPTY UNITS. THEY'RE OWNED BUT THEY'RE SITTING EMPTY. 5 PERCENT OF THE UNITS THERE. WE HAVE PEOPLE WHO ARE LOOKING FOR PLACES TO LIVE AND WE'VE GOT LOTS OF EMPTY UNITS AND PEOPLE CAN'T GET IN... ANYWAY, THE IMPLICATIONS OF ALL OF THIS?

The caption changes to "Diana Petramala, @diana_petramala."

Diana says I THINK THERE'S AGAIN PRODUCTIVE AND UNPRODUCTIVE INVESTMENT IN THE HOUSING MARKET AND SO VACANT UNITS ARE DEFINITELY UNPRODUCTIVE AND THE GOVERNMENT NEEDS TO FIGURE OUT HOW TO GET THOSE BACK ON THE MARKET. I THINK IMPLICATIONS ARE, WE'RE SEEING HOME OWNERSHIP IS MOVING OUT OF REACH FOR A LOT OF PEOPLE IN THE REGION AND WE'RE SEEING NOW HIGHER INCOME HOUSEHOLDS THAT WOULD HAVE BEEN HOME OWNERS ARE EATING UP WHAT WOULD HAVE BEEN AFFORDABLE SUPPLY FOR HOUSEHOLDS IN THE RENTAL MARKET. SO THE AVERAGE INCOME FOR RENTERS IS RISING FASTER THAN THE AVERAGE INCOME FOR HOME OWNERS, AND THAT'S NOT BECAUSE WE'RE SEEING EMPLOYMENT... WE'RE SEEING HIGHER INCOME HOUSEHOLDS STAYING IN LONGER OR JUST GOING INTO THE RENTAL MARKET WHEN THEY SHOULD BE IN THE HOME OWNER MARKET AND THAT'S CROWDING OUT PEOPLE WHO HAVE LOWER INCOMES, SO IT'S COMING AT THE EXPENSE OF PEOPLE WHO CAN'T AFFORD... WHO CAN NEVER AFFORD HOME OWNERSHIP AND WERE IN THE RENTAL MARKET BECAUSE IT ONCE WAS A MORE AFFORDABLE OPTION. IT'S BECOMING MORE OF A CHALLENGE NOW TO PROVIDE THAT AFFORDABLE HOUSING. SO THE FINANCIALIZATION, WE TALKED ABOUT THE FINANCIALIZATION OF PURPOSE-BUILT RENTALS. THEY'RE DOING IT BECAUSE THEY CAN. THEY CAN TURN THESE UNITS AROUND AND CHARGE 2400 dollars FOR A ONE PLUS DEN.

Steve says 650 SQUARE FEET. THAT'S AMAZING. YOU WANT TO PICK UP ON THAT? WHAT DO YOU SEE AS THE IMPLICATIONS OF ALL OF THIS?

The caption changes to "Martine August, @Martine_August."

Martine says SURE. IF YOU'RE BUILDING NEW RENTAL SUPPLY AND IT'S GOING TO COST 2400 dollars, THAT'S NOT ADDRESSING THE AFFORDABLE HOUSING CRISIS THAT WE HAVE. AND IT WON'T BECAUSE THE INVESTORS THAT ARE DOING A PURPOSE-BUILT RENTAL ARE DOING IT BECAUSE THEY WANT TO CHARGE THE TOP OF MARKET PRICES. I THINK IT'S DISINGENUOUS TO ARGUE WE NEED MORE SUPPLY BECAUSE THERE WILL BE NO RENTAL CONTROL ON THOSE. THE RENTAL HOUSING WE'RE LOOKING AT IN THE GTA AND ACROSS THE COUNTRY ISN'T PURPOSE-BUILT, IT'S THE OLD STUFF, BUILT IN THE '60s AND '70s. THAT IS BEING FINANCIALIZED INTO. IT'S TALKED ABOUT IN THE FILM. SHE TALKS ABOUT BLACK STONE, PRIVATE EQUITY FIRM. WE HAVE LOTS AND LOTS OF FINANCIAL VEHICLES IN CANADA THAT ARE CONSOLIDATING OWNERSHIP OF EXISTING MULTI-FAMILY RENTAL STOCK AND THE STRATEGY THAT THESE OWNERS ARE USING IN ORDER TO DRIVE PROFITS FOR THEIR INVESTMENT... FOR THEIR INVESTORS, I SHOULD SAY, REALLY RELY ON DRIVING UP RENTS FOR PEOPLE. AND ULTIMATELY, RELY ON PUSHING PEOPLE OUT OF THEIR HOMES. THE BIGGEST WAY THAT THESE COMPANIES MAKE MONEY FOR THEIR INVESTORS IS WHAT THEY CALL UNIT TURN. TAKING A UNIT WHERE SOMEBODY LIVES, GETTING IT VACANT, AND THEN DRIVING THAT RENT UP.

The caption changes to "Connect with us: Twitter: @theagenda; Facebook, agendaconnect@tvo.org, Instagram."

Steve says IN ONTARIO YOU CAN RAISE THE RENT PRETTY MUCH AS MUCH AS YOU LIKE IF YOU CAN GET THE OLD TENANT OUT AND A NEW TENANT IN.

Martine says IT'S CALLED VACANCY DECONTROL, SOMETHING BROUGHT IN BY THE HARRIS GOVERNMENT IN 1997. THAT CREATED THIS TREMENDOUS INCENTIVE FOR THESE TYPES OF FIRMS, REAL ESTATE INVESTMENT TRUSTS, PRIVATE EQUITY, OTHER TYPES OF FINANCIAL VEHICLES TO ACQUIRE AND CONSOLIDATE OWNERSHIP OF MULTI-FAMILY HOUSING. THEY DID IT SPECIFICALLY TO TAKE ADVANTAGE OF VACANCY DECONTROL, SEEING IT COMING DOWN THE PIPELINE, AND WE'VE BEEN SEEING RENTS GOING UP EVER SINCE THEN. WE'VE BEEN SEEING THE TRANSFORMATION OF NEIGHBOURHOODS. WE SAW A CLIP FROM PARKDALE. THAT'S A PLACE WHERE LOTS AND LOTS OF BUILDINGS ARE BEING ACQUIRED. PEOPLE IN THOSE BUILDINGS, WORKING PEOPLE WHO LIVED IN THAT COMMUNITY FOREVER, HAVE A CONNECTION TO THOSE PLACES, ARE FINDING THAT THEIR LANDLORDS ARE PUSHING THEM OUT, RAISING RENTS. AND THE NEXT PERSON THAT COMES IN, YOU KNOW, THE GENTRIFIER, THEY'RE ALSO BEING GOUGED. THOSE ARE THE NATURAL ALLIES OF THE TENANTS BEING DISPLACED.

Steve says LET'S UNDERSTAND, BENJAMIN, HOW WE GOT HERE. WHAT ROLE DID HISTORICALLY LOW INTEREST RATES FOR THE LAST MANY YEARS PLAY IN WHERE WE ARE AT TODAY.

Benjamin says IT WAS BASICALLY THE MAIN REASON WHY WE ARE SEEING WHAT WE ARE SEEING BECAUSE WE KNOW THAT FOR THE PAST 20 YEARS, INTEREST RATES HAVE BEEN GOING DOWN AND DOWN AND DOWN, FOR MANY, MANY REASONS, DEMOGRAPHICS, PEOPLE ARE GETTING OLDER. IN JAPAN, INTEREST RATES ARE NEGATIVE THERE. EUROPE, INTEREST RATES ARE NEGATIVE. WE ARE VERY LOW. CLEARLY THE DEMOGRAPHIC STORY, PEOPLE GETTING OLDER, IS A MAIN FACTOR. INFLATION EXPECTATION IS GOING DOWN. INTEREST RATES ARE GOING DOWN. THAT WILL REMAIN THE CASE. THAT'S NOT SOMETHING THAT WILL CHANGE TOMORROW. THEREFORE WE HAVE TO GET USED TO THIS KIND OF SITUATION. NOW, WHEN INTEREST RATES ARE VERY LOW AND ALL THOSE BIG FINANCIAL PLAYERS ARE LOOKING FOR A RETURN AND THE GIC WILL NOT DO, YOU LOOK FOR ALTERNATIVE INVESTMENT, WHICH IS REAL ESTATE. SO REAL ESTATE HAS BEEN KEY OVER THE PAST TWENTY YEARS AND IT WILL REMAIN AN ATTRACTIVE INVESTMENT GIVEN INTEREST RATES. THE DEMOGRAPHIC STORY AND LOW INTEREST RATES IS THE MAIN FACTOR. DEMAND FOR REAL ESTATE IS RISING AND RISING AND RISING, AND ESPECIALLY IN CANADA WHERE I AM IMMIGRATION IS SO SIGNIFICANT IN TERMS OF PLAYING A ROLE IN THE DEMAND EQUATION. SO ALL THOSE FORCES ARE HERE TO STAY. GOING BACK TO THE ISSUE OF... WE HAVE TO DISTINGUISH BETWEEN AFFORDABLE HOUSING AND HOUSING AFFORDABILITY. AFFORDABLE HOUSING IS CLEARLY A MARKET FAILURE. PEOPLE NEED A PLACE TO LIVE AND THE GOVERNMENT NEEDS TO PROVIDE THIS KIND OF ASSISTANCE. BUT I'M TALKING ABOUT SOME... THE OTHER PART OF THE EQUATION, NAMELY YOUNG FAMILIES TRYING TO BUY A HOUSE IN TORONTO. THEY SIMPLY CANNOT AFFORD IT. THAT'S WHY I BELIEVE... AND WE CAN DISCUSS IT MAYBE... THAT THE NEXT WAVE OF REAL ESTATE IN TORONTO, REAL ESTATE IN CANADA, IS ACTUALLY RENTING AS OPPOSED TO OWNING. I THINK THAT 70 PERCENT, WE HAVE REACHED THE PEAK OF HOME OWNERSHIP IN CANADA AND I THINK THAT YOU WILL SEE MORE AND MORE PEOPLE RENTING AND WE WILL START CHANGING THE WAY WE VIEW RENTING, NAMELY, YOU ARE 35 YEARS OLD. YOU ARE MARRIED. YOU HAVE TWO KIDS AND YOU ARE RENTING. NOTHING IS WRONG WITH YOU.

Steve says THAT'S AN OKAY SCENARIO.

Martine says I THINK LOTS OF PEOPLE ARE RENTING. I DON'T HAVE ANY PROBLEM. WE HAVE A HOME OWNERSHIP STIGMATIZATION IN CANADA. PEOPLE ARE NOT JUST THERE IN THEIR HOUSING CAREER. I DISAGREE WITH THAT. I THINK RENTING IS FINE. HOWEVER, WE JUST SEE THE PRICES GOING UP AND UP AND UP. THAT $2400 FIGURE IS SO HIGH. PEOPLE CAN'T AFFORD THAT. SO WHAT WE NEED... I MEAN, I AGREE WITH BENJAMIN. WE NEED MORE GOVERNMENT INVESTMENT IN HOUSING, WE NEED RENT CONTROLS, WE NEED TO MAKE IT SO THAT PEOPLE CAN AFFORD TO STAY, LIVE IN THE CITY WHERE THEY WORK, RAISE THEIR FAMILIES IN PLACES THAT THEY LOVE.

Steve says HAVING SAID THAT, SHAUN, TELL ME WHAT IT IS ABOUT WHATEVER MAKES TORONTO MAGIC AT THE MOMENT, THAT IT IS SUCH A SUPREMELY WONDERFUL PLACE APPARENTLY TO INVEST IN REAL ESTATE?

Shaun says WELL, IF YOU LOOK AT HOUSING PRICES, HISTORICALLY IN TORONTO, THEY'VE ONLY DECLINED ONCE IN THE PAST 22 YEARS. YOU'VE SEEN ALMOST UNINTERRUPTED GROWTH IN HOUSING PRICES FOR ALMOST A FULL GENERATION. NOW WE HAVE BASICALLY A GENERATION OF HOME BUYERS THAT HAVE ONLY SEEN THE VALUE OF REAL ESTATE RISE AND THEY'VE ONLY SEEN RECORD LOW INTEREST RATES. IT FACTORS INTO THEIR PSYCHE THAT INVESTING IN REAL ESTATE IS A VERY WISE DECISION. 70 PERCENT OF ALL HOUSEHOLD ASSETS ARE ACTUALLY IN REAL ESTATE. WE ALSO HAVE SEEN IMMIGRATION LEVELS RISE ABOVE 100,000 A YEAR IN THE GTA. WE HAVE ONE OF THE... IF NOT THE FASTEST GROWING ECONOMY IN THE COUNTRY. SO JOB CREATION HAS BEEN EXCEPTIONALLY STRONG. WE SEE IMMIGRATION COMING IN AND BOOSTING HOUSING DEMAND. SO THE POINT THAT WE'RE SEEING DEMAND FOR RENTAL HOUSING AT 25,000 UNITS A YEAR, BUILDING ON A GOOD YEAR BETWEEN CONDO STOCK AND PURPOSE BUILT STOCK, MAYBE 15,000 UNITS A YEAR. IT'S 10,000 UNITS A YEAR WE ARE NOT GETTING. THE RENTAL DEVELOPMENT INDUSTRY IS STARTING TO RECOGNIZE THIS AND WE'RE STARTING TO SEE PROGRESS MADE ON SUPPLY. WE HAVE 14,000 UNITS UNDER CONSTRUCTION WHICH MAY SOUND LIKE A LOT BUT THERE ARE 70,000 CONDOS UNDER CONSTRUCTION. IT'S A SMALL PORTION OF OVERALL HOUSING DEVELOPMENT. ONE OF THE THINGS WE NOTICED HAPPEN AFTER THE PROVINCIAL GOVERNMENT REMOVED RENT CONTROL FOR ANYTHING NEWLY BUILT GOING FORWARD IS THAT WE SAW A 40 PERCENT SPIKE IN PROPOSALS COMING IN FOR NEW PURPOSE-BUILT RENTAL DEVELOPMENTS. NOW WE HAVE CLOSE TO 60,000 UNITS IN THE PIPELINE. I CAN TELL YOU FROM THE WORK THAT WE DO ON DOING MARKET FEASIBILITY STUDIES FOR RENTAL DEVELOPERS, THERE'S ANOTHER 50,000, 60,000 PLANNED AHEAD OF THAT. SO WE'RE GOING TO GET THERE EVENTUALLY. THE PROBLEM IS THAT A LOT OF THESE UNITS ARE LOCATED DOWNTOWN. THE RENTS ARE RELATIVELY HIGH. BUT ONE OF THE MAGICAL THINGS THAT YOU SEE HAPPEN WHEN MORE SUPPLY COMES INTO THE MARKET IS THAT RENTS BEGIN TO STABILIZE AND WE'RE STARTING TO SEE THAT RIGHT NOW. THIS YEAR IN TORONTO WE'LL SEE THE HIGHEST LEVEL OF APARTMENT COMPLETIONS THAT WE'VE SEEN PROBABLY ON RECORD AND BECAUSE MOST OF THOSE CONDOS WERE BOUGHT BY INVESTORS, THEY'LL GO DIRECTLY INTO THE RENTAL POOL. SOME OF THE STATS I'M SEEING OVER THE LAST SIX MONTHS SUGGEST THAT RENTS ARE ACTUALLY FLATTENING OUT. AS THAT HAPPENS YOU SEE A FILTERING EFFECT DOWN TO THE REST OF THE MARKETPLACE. WE'RE ALSO STARTING TO SEE MORE DEVELOPMENT APPLICATIONS COMING INTO THE SUBURBS WHERE THE RENTS DON'T NEED TO BE 2400 dollars A MONTH.

The caption changes to "Watch us anytime: tvo.org, Twitter: @theagenda, Facebook Live, YouTube."

Steve says LET ME PICK UP ON THAT WITH DIANA. THERE IS A TENDENCY WHEN YOU LIVE IN TORONTO TO THINK THIS IS THE CENTRE OF THE UNIVERSE AND WHATEVER IS HAPPENING HERE IS MAYBE HAPPENING EVERYWHERE. I WANT TO KNOW IN THE PROVINCE OF ONTARIO, IS IT BASICALLY A TORONTO PHENOMENON, BUT EVERYWHERE ELSE, IT'S NORMAL?

The caption changes to "The impact on affordability."

Diana says I THINK THAT'S THE INTERESTING PART ABOUT ONTARIO IS THAT PRICES ARE RISING JUST AS QUICKLY OUTSIDE OF THE CITY AND THE GAP BETWEEN RENT WITHIN THE CITY AND THE REST OF THE GREATER TORONTO AREA, IF YOU INCLUDE HAMILTON, THE GREATER TORONTO AND HAMILTON AREA, DON'T VARY BY THAT MUCH. LIKE, YOU'RE NOT GOING TO BE SPENDING LESS BY MOVING TO THE YORK REGION AND NOW YOU HAVE TO ADD THE COMMUTE IN, BECAUSE ALL THE JOBS ARE IN THE CITY OF TORONTO, WHICH IS WHY I THINK YOU SAW A LOT OF THE DEMAND. WHAT IS INTERESTING NOW, THOUGH, WE TAKE IT FOR GRANTED THAT EVERYBODY DOESN'T WANT TO BE IN THE CITY OF TORONTO. WE ARE STARTING TO SEE MILLENNIALS, FIRST-TIME HOME BUYERS AND OTHER GENERATIONS, OTHER AGE GROUPS ALSO, LEAVING THE CITY OF TORONTO. WE HAVE INTRAPROVINCIAL MIGRATION, WHICH IS PEOPLE MOVING WITHIN THE PROVINCE, SHOWS THAT PEOPLE ARE ACTUALLY LEAVING THE CITY OF TORONTO AND THE TORONTO CMA FOR OTHER AREAS IN ONTARIO. THEY'RE NOT EVEN STAYING WITHIN SORT OF THE GENERAL COMMUTE AREA. THEY'RE GOING BEYOND WHAT WE CALL THE GREATER GOLDEN HORSESHOE.

Steve says AND THOSE DECISIONS ARE MADE OVERWHELMINGLY BECAUSE OF HOUSING REASONS?

Diana says YEAH. YOU CAN CHART MIGRATION FLOWS WITH HOUSING AFFORDABILITY. HOME OWNERSHIP HAS BEEN GOING UP. YOU'VE SEEN THE OPPOSITE TREND, PEOPLE LEAVING THE REGION.

Steve says HOW ARE THEY DOING THAT? BECAUSE PRESUMABLY IF THEY NEEDED TO BE HERE, IT WAS BECAUSE THERE WAS A JOB HERE THAT REQUIRED THEM TO BE HERE. IF YOU'RE MOVING TWO, THREE HOURS AWAY, YOU CAN'T TAKE THE JOB WITH YOU IN MANY CASES, SO HOW IS THAT WORKING?

dollars says ACTUALLY, WHAT'S MOST INTERESTING IS OTTAWA SEEMS TO BE BENEFITING FROM INFLOWS AND OTTAWA HAS THE LOWEST... IS THE REGION WITH THE LOWEST UNEMPLOYMENT RATE ACROSS THE COUNTRY. SO THEY'RE MOVING FOR AFFORDABLE HOUSING BUT I THINK THEY'RE ALSO MOVING FOR JOB PROSPECTS.

Steve says IS THIS HAPPENING IN OTTAWA AS WELL?

Martine says THE FINANCIALIZATION OF RENTAL HOUSING? ABSOLUTELY. IT'S HAPPENING ALL ACROSS THE COUNTRY. YOU CAN SEE THIS IN THE MAJOR MARKETS IN THE GTA, TORONTO, VANCOUVER, YOU CAN ALSO SEE IT FILTERING DOWN TO SECONDARY, TERTIARY MARKETS. MOBILE HOME PARKS, THE FAR NORTH, RESOURCE COMMUNITIES. THESE TYPES OF FINANCIAL VEHICLES ARE RAPIDLY ACQUIRING MULTI-FAMILY HOUSING, RENTAL HOUSING ACROSS THE COUNTRY, AND APPLYING A SERIES OF AGGRESSIVE PROPERTY MANAGEMENT STRATEGIES TO DRIVE GREATER RETURNS TO THEIR INVESTORS. AS I MENTIONED AT THE BEGINNING, THIS IS A STRATEGY THAT REALLY GETS THOSE PROFITS DON'T COME AS IF FROM MAGIC, THEY REALLY COME FROM THE POCKETS OF THE TENANTS LIVING IN THOSE BUILDINGS. THERE'S REALLY ONLY SO MANY WAYS THAT YOU CAN RAISE VALUE FOR YOUR INVESTORS. AND THE VALUE BEING RAISED IS FOR THE INVESTORS AND IT'S COMING FROM THE TENANTS. SO WHAT WE'RE SEEING HERE IS IT'S SORT OF WEALTH TRANSFER, IT IS ALMOST MIRRORING THE BROADER TRANSFORMATION OF WEALTH THAT'S BEEN HAPPENING WITH FINANCIALIZATION OVER THE LAST COUPLE DECADES. THIS IS THE TYPE OF THING THAT THOMAS PIKETTY TALKS ABOUT IN HIS BOOK, THIS IS THE OCCUPY WALL STREET WE'RE TALKING ABOUT, THIS SHIFT WHEN YOU HAVE THE ONE PERCENT INCREASINGLY GROWING WEALTHIER WHILE YOU SEE WORKING PEOPLE'S WAGES STAGNATING. PEOPLE WHO ARE LIVING IN APARTMENT BUILDINGS ARE SEEING A GREATER PORTION OF THEIR INCOME GO TOWARDS INVESTORS WHO ARE POOLING THEIR CAPITAL AND BUYING THESE PROPERTIES.

Steve says IF YOU WOULD LIKE TO SEE US TRANSFORM INTO A SOCIETY WHERE YOU CAN BE IN YOUR MID 30s, HAVE A FAMILY, AND LIVE IN RENTAL ACCOMMODATION AND THAT'S JUST FINE, THEN PRESUMABLY WE WANT TO START INTRODUCING POLICIES TO ENSURE THAT THERE'S GOING TO BE A LOT MORE RENTAL STOCK OUT THERE. WHAT DO YOU HAVE IN MIND?

The caption changes to "Policy solutions."

Benjamin says ABSOLUTELY. I THINK PURPOSE BUILD IS A SOLUTION. I TOTALLY AGREE THE CONDO MARKET CANNOT BE THE RENTAL MARKET AND THE RENTAL MARKET CANNOT BE THE CONDO MARKET BECAUSE THE NEW WAVE OF RENTALS, AND THAT'S THE REALITY, ARE GOING TO BE FAMILIES WITH KIDS OR BABY BOOMERS THAT WILL BE DOWNSIZING. BOTH OF THEM DON'T WANT TO DEAL WITH A LANDLORD. THEY WANT TO DEAL WITH A COMPANY, STABLE, AND THEY NEED THIS KIND OF ARRANGEMENT. THEREFORE, INCREASED SUPPLY OF PURPOSE-BUILT APARTMENT BUILDINGS IS CRUCIAL FOR THE SOLUTION TO THE REAL ESTATE CRISIS WE ARE FACING AND THEREFORE WE NEED TO MAKE SURE THAT PEOPLE (a) GET USED TO THE IDEA, SO WE HAVE TO CHANGE EXPECTATIONS WHEN IT COMES TO HOUSING. IT'S NOT JUST YOU GRADUATE, YOU... FROM UNIVERSITY OR NOT, YOU GET MARRIED, YOU HAVE TWO KIDS AND THEN YOU BUY A HOUSE. NOW MAYBE YOU'LL BE RENTING BUT WE NEED TO MAKE SURE THAT THE SUPPLY IS THERE, THE UNIT SIZE MUST BE RELEVANT TO FAMILIES, SO WE HAVE TO RE-THINK THE WAY WE SUPPLY, AND GOVERNMENTS CAN PLAY A ROLE BY, LET'S SAY, ALLOWING THOSE BUILDERS TO ACTUALLY MAKE MONEY OUT OF THESE DEVELOPMENTS.

Steve says SO WHAT POLICIES DO WE NEED TO MAKE SURE THAT HAPPENS?

Benjamin says FOR EXAMPLE, YOU CAN REDUCE DEVELOPMENT CHARGES. YOU CAN ACTUALLY GIVE THEM A BREAK ON... THERE ARE MANY, MANY FACTORS, TRICKS, THAT YOU CAN COME UP WITH, JUST TO INCREASE SUPPLY. SHAUN WAS TALKING ABOUT SOME INCREASE THAT IS HAPPENING. I SAY THAT'S NOT ENOUGH. WE NEED MUCH MORE THAN THAT. THAT IS A SOLUTION TO OUR CRISIS.

Steve says REDUCING DEVELOPMENT CHARGES, DOES THAT NOT MEAN YOU'RE GOING TO HAVE FEWER PARKS, FEWER DAY CARE SPACES IN THE NEIGHBORHOOD, FEWER AMENITIES...

Benjamin says THAT'S THE TRICK. WE HAVE TO FIND A REAL PRACTICAL SOLUTION TO THE ISSUE. WE NEED MORE SUPPLY. AND THEN TRY TO COME UP WITH A WAY TO LIVE SMARTER, AND WE CAN DO IT WITH TECHNOLOGY. SO I THINK THAT THAT'S THE DIRECTION. WE NEED MORE SUPPLY. THE ISSUE IS NOT DEMAND. I'LL TELL YOU ONE THING, I WAS IN OTTAWA THE OTHER DAY, AND SOME PEOPLE ARE STARTING TO TALK ABOUT REDUCING IMMIGRATION AS A SOLUTION. WE ARE AN AGING SOCIETY. WE NEED NEW IMMIGRANTS. WE NEED THEM MORE THAN EVER...

Steve says YOU DON'T LIKE THAT IDEA.

Benjamin says I DON'T THINK IT'S A GOOD IDEA. IT'S BASICALLY A SIGN OF DESPERATION. AND ONE MORE POINT ABOUT THAT. IF WE'RE GOING TO FIX THIS HOUSING ISSUE, WE WILL NOT GET THOSE 100,000 COMING TO TORONTO BECAUSE THEY WILL GO SOMEWHERE ELSE BECAUSE AT ONE POINT THEY WILL SAY, TORONTO IS NOT A CITY WE CAN LIVE IN BECAUSE, YOU KNOW, THE INFRASTRUCTURE IS NOT THERE, HOUSING IS NOT THERE. THAT'S NOT GOOD ENOUGH. SO WE NEED TO ATTRACT THEM, NOT TO REDUCE THE NUMBERS. AND THE ONLY WAY TO DO IT IS TO MAKE SURE THAT HOUSING IS AFFORDABLE AND RENTAL IS THE SOLUTION.

Steve says IN WHICH CASE, MARTINE, IDEAS, IDEAS, IDEAS. HOW ARE WE GOING TO PUT THE POLICIES IN PLACE THAT WILL ENCOURAGE MORE PURPOSE-BUILT RENTAL?

Martine says YEAH, I THINK INVESTMENT BY THESE TYPES OF FIRMS INTO PURPOSE-BUILT RENTAL AND INTO ACQUIRING NEW RENTAL IS NOT REALLY A SOLUTION TO THE PROBLEM. WHAT WE'VE SEEN HAPPEN OVER THE DECADES IS MORE AND MORE INVESTMENT IN LUXURY HOUSING THAT'S... WHERE PEOPLE PAY EXPENSIVE RENTS. WE HAVEN'T SEEN PRICES FALLING. IN FACT, IT'S BEEN THE OPPOSITE. SO I THINK THERE'S AN ARGUMENT OUT HERE ABOUT HOW WE NEED MORE AND MORE SUPPLY. IT'S AN ARGUMENT REALLY FAVOURED BY DEVELOPERS. AND WE DON'T SEE THAT MAGICAL... WE DON'T SEE IT FILTERING DOWN, YOU KNOW? AND I THINK THE IDEA OF FILTER-DOWN ECONOMICS WAS DEBUNKED YEARS AGO.

Steve says IN WHICH CASE, WHAT DO YOU HAVE ON OFFER?

Martine says I'M SAYING THAT THE GOVERNMENT ACTUALLY SHOULDN'T BE SUBSIDIZING REAL ESTATE INVESTMENT TRUSTS AND PRIVATE EQUITY FUNDS WITH GOVERNMENT-BACKED LENDING, PROVIDING WITH THOSE LOW RATES, AND THEN ALLOWING THEM TO DRIVE THIS AFFORDABILITY CRISIS. I DON'T THINK CMHC, FOR EXAMPLE, OUR FEDERAL HOUSING AGENCY, SHOULD BE GIVING THESE PEOPLE THE ACCESS TO THE CHEAP FINANCING SO THEY CAN KEEP WORSENING THE PROBLEM.

Steve says YOU TOLD ME TWICE WHAT THEY SHOULDN'T DO. WHAT SHOULD THEY DO?

Martine says THEY SHOULD BUILD SOCIAL HOUSING. THIS IS WHAT BENJAMIN IS SAYING. WE DON'T NEED TO HAVE THIS MIDDLE MAN THAT'S MAKING THE PROFIT...

Steve says I DON'T THINK HE WAS SAYING THAT. I DIDN'T HEAR HIM SAY THAT.

Martine says LET ME... I DON'T MEAN TO PUT WORDS IN YOUR MOUTH. WHAT I SHOULD SAY IS WE HAVEN'T TRIED THIS IN A WHILE. WE'VE HAD DECADES AND DECADES IN WHICH WE'VE HAD THE FEDERAL GOVERNMENT STEP AWAY FROM PROVIDING SOCIAL HOUSING. THE PRIVATE SECTOR HAS NOT SWEPT IN AND PROVIDED US WITH AFFORDABLE HOUSING. IN FACT WE'VE JUST SEEN PRICES GETTING WORSE AND WORSE AND WORSE AND PEOPLE ARE GETTING SQUEEZED. WHAT WE NEED TO DO IS HAVE THE GOVERNMENT, WHICH HAS LOTS OF MONEY, INVEST IN SOCIAL HOUSING. I'M NOT TALKING ABOUT LOW QUALITY SOCIAL HOUSING. I'M TALKING ABOUT WONDERFUL NET ZERO EMISSIONS, SOCIAL HOUSING THAT'S DESTIGMATIZED. THAT WOULD BE AN INTERESTING AND INNOVATIVE SOLUTION THAT WE COULD TRY AND WE HAVEN'T TRIED IT IN DECADES AND WE HAVEN'T SEEN THE PRIVATE SECTOR COME IN AND PROVIDE A BETTER SOLUTION.

Steve says YOU DON'T LOOK ALL THAT EXCITED.

Benjamin says I THINK SOCIAL HOUSING IS DEFINITELY THE RIGHT THING TO DO BUT SOCIAL HOUSING WILL NOT SOLVE THE PROBLEM. SOCIAL HOUSING IS DEALING WITH THE MARGIN OF SOCIETY THAT ARE STRUGGLING AND WE NEED TO HELP THEM AS A SOCIETY. SO I'M TOTALLY WITH YOU ON THIS ONE. BUT SOCIAL HOUSING IS NOT THE MAIN ISSUE. THE MAIN ISSUE IS MIDDLE INCOME FAMILIES WITH TWO KIDS THAT CANNOT AFFORD HOUSING IN TORONTO. THAT'S NOT SOCIAL HOUSING. WE NEED TO HELP THEM AS WELL, AND THAT'S WHERE YOU NEED THE SUPPLY. SO WE HAVE TO DISTINGUISH BETWEEN THOSE TWO FORCES.

Steve says MARTINE?

Martine says I WOULD SAY ON THE SUPPLY SIDE, THE OTHER THING WE NEED TO DO IS STOP THE RENTS FROM GOING UP. DON'T ALLOW COMPANIES TO GOUGE FAMILIES ANYMORE. IMPLEMENT ACTUAL RENT CONTROLS. AND LOOPHOLES THAT ALLOW LANDLORDS TO RAISE RENTS IN WHICH YOU CAN CHARGE BACK THE COST OF MAJOR CAPITAL REPAIRS ONTO TENANTS. REALLY, CUT THAT OFF SO THAT RENTS WILL STAY LOW SO THAT PEOPLE WILL HAVE THE SECURITY OF TENURE, SO THEY CAN STAY IN THEIR COMMUNITIES. I CAN ANTICIPATE THE RESPONSE I'M GOING TO GET FROM ECONOMISTS ON THIS IS THAT IN 1991, WE HAD THIS RENT CONTROL WAS REMOVED ON ANYTHING BUILT AFTER 1991. LET'S GO BACK AND LOOK AT HOW MUCH GOT BUILT. IT ONLY STARTED VERY, VERY RECENTLY THAT WE STARTED TO SEE... THERE WAS DECADES AND DECADES AND DECADES IN WHICH THE PRIVATE SECTOR COULD HAVE CAPITALIZED ON THE MAGICAL INCENTIVE THAT WAS GOING TO BE PROVIDED BY REMOVING RENT CONTROLS. IT DIDN'T HAPPEN...

Steve says 1991 WAS THE WORST RECESSION SINCE THE GREAT DEPRESSION.

Martine says IT'S BEEN A WHILE. AND WE'VE JUST SEEN THE START OF THE INVESTMENT. AND GUESS WHAT? WE'RE SEEING THE FEDERAL GOVERNMENT INVESTING IN PRIVATE MULTI-FAMILY RENTAL CONSTRUCTION RIGHT NOW AND WE'RE STARTING TO SEE A LITTLE BIT MORE PUBLIC INCENTIVE FOR THAT. I THINK IF THE FEDERAL GOVERNMENT HAS MONEY TO PUT INTO BUILDING PURPOSE-BUILT RENTAL, IT SHOULD BE BUILT FOR A SOCIAL PURPOSE. I BELIEVE THAT... YOU KNOW, WE TALKED EARLIER ABOUT WHETHER HOUSING IS A SOCIAL GOOD. I THINK IT SHOULD BE. I BELIEVE PEOPLE ARE COMING AROUND TO THAT WAY OF THINKING.

Steve says LET'S GET SOME WISDOM FROM THIS SIDE OF THE TABLE. SHAUN, SOME IDEAS FROM YOU.

Shaun says FIRST I THINK JUST KIND OF GOING BACK TO THAT 1991 EXEMPTION. ONE OF THE BIG REASONS WHY DEVELOPERS DIDN'T START BUILDING RENTAL BACK THEN, WHEN RENT CONTROL WAS REMOVED, WAS BECAUSE THERE WASN'T REALLY MUCH RENTAL DEMAND GROWTH. ON A NET BASIS, WE WERE LOSING RENTERS FOR A GOOD COUPLE OF DECADES. THE REASON BEHIND THAT WAS THERE WAS A BIG PUSH TO PUT RENTERS INTO THE HOME OWNERSHIP MARKET, RIGHT? WE SAW CMHC INTRODUCE 40-YEAR AMORTIZATION, ZERO DOWN PROGRAMS, AND WE SAW A MASSIVE RUN-UP IN OWNERSHIP OVER THIS TIME. HOWEVER, 15 YEARS LATER WE'RE AT THIS POINT WHERE HOUSING PRICES IN THE GTA ARE 107 percent HIGHER THAN TEN YEARS AGO AND NOW WE'RE STARTING TO SHUT OUT A LOT OF RENTER HOUSEHOLDS INTO THE HOME OWNERSHIP MARKET. I THINK SOME OF THE THINGS THAT WE'RE STARTING TO SEE HAPPEN, LIKE PUBLIC PRIVATE PARTNERSHIPS THAT ARE SEEING, YOU KNOW, THE CITY OF TORONTO RELEASE 11 TRANSIT ORIENTED SITES THAT ARE MANDATING TO INCLUDE 50 PERCENT OF THE UNITS AS AFFORDABLE HOUSING, THE OTHER 50 PERCENT BEING MARKET RATE, IS HELPING TO SORT OF BRING IN MORE AFFORDABLE HOUSING...

Steve says THAT'S HOUSING WITH A PUBLIC SPIRITED MISSION, RIGHT?

Shaun says YEAH. SO THE RENTS ARE ABOUT 80 PERCENT OF THE AVERAGE TENANTED RENT, ACCORDING TO THE CMHC AVERAGE. SO THEY'RE PROBABLY, YOU KNOW, 30, 40 PERCENT BELOW ACTUAL MARKET VALUE.

Steve says SO THAT WILL GO SOME WAY TO DEALING WITH SOME OF THESE ISSUES?

Shaun says YEAH, I THINK A LITTLE BIT. IF WE SEE MORE AND MORE OF THAT HAPPEN. ON THE PROVINCIAL SIDE WE'RE SEEING PROVINCIAL LANDS BEING OPENED UP TO DEVELOPERS AND THEN THERE'S A BIT OF A REBATE OR A MARKET REBATE ON THE LAND BECAUSE THERE'S ALSO AN AFFORDABLE HOUSING COMPONENT, 3G AFFORDABLE HOUSING. THESE INITIATIVES I THINK ARE STARTING TO HELP ON THE MARGINS. BUT GOING BACK TO WHAT BENJAMIN SAID, WE JUST NEED MORE MARKET RATE PURPOSE-BUILT RENTAL SUPPLY. I DO THINK THERE'S AN ARGUMENT THAT EVEN IF THAT MARKET RATE SUPPLY COMES IN AT 2300 OR 2400 dollars A MONTH, THERE'S BEEN A LOT OF EMPIRICAL RESEARCH THAT HAS SHOWN THAT IT DOES HELP CALM RENT GROWTH FOR THE REST OF THE MARKETPLACE, RIGHT? REAL ESTATE IS PRICED ON A RELATIVE BASIS. IT'S VERY SIMPLE. SO WHEN THE TOP END OF THE MARKET BEGINS TO SLOW DOWN, YOU START TO SEE THAT HAPPEN ACROSS THE REST OF THE MARKET. ONE OF THE ISSUES IS THAT WITH RENT CONTROL, PEOPLE DON'T MOVE. PEOPLE DON'T MOVE AS OFTEN. IN TORONTO, WE HAVE THE LOWEST LEVEL OF RENTAL TURNOVER IN THE COUNTRY, 9 PERCENT OF PEOPLE ARE MOVING ON AN ANNUAL BASIS.

Steve says WHY IS THAT?

Shaun says BECAUSE THEY'RE LOCKED IN BY THEIR RENTS ONLY GROWING AT 1 PERCENT A YEAR. THERE'S AN ARGUMENT THAT CAN BE MADE THAT, YES, RENTAL CONTROL PLAYS A ROLE IN A MARKET THAT'S BECOME RELATIVELY UNAFFORDABLE, LIKE TORONTO. BUT THERE'S ALSO AN ARGUMENT FOR IT MAYBE BEING A LITTLE BIT MORE DYNAMIC AND ALLOWING RENTS TO GROW BY A MORE REASONABLE RATE SO YOU DON'T GET INTO SITUATIONS WHERE THE LANDLORD IS NOT DOING REPAIRS ON THE UNITS BECAUSE THEY CAN'T MAKE ECONOMIC SENSE OF DOING SO IN SOME CASES, AND THE RENTS ARE ALLOWED TO GROW IN LINE WITH THEIR COSTS, WHICH COULD BE, YOU KNOW, INFLATION PLUS 1 PERCENT OR 2 PERCENT OR SOMETHING LIKE THAT.

Steve says DIANA, A COUPLE OF MINUTES TO GO HERE. DO YOU HAVE SOME IDEAS YOU WANT TO SHARE?

Diana says FIRST I WANT TO POINT OUT THAT, YES, THE REGION IS BUILDING A LOT. I THINK WE'RE UNDERESTIMATING THE DEMOGRAPHIC IMPACT OF AGING MILLENNIALS AND THEY ARE WEALTHIER AND MOVING INTO THEIR HIGHER INCOME EARNING YEARS. THERE'S A LOT BEING BUILT BUT WE CAN'T ACCOMMODATE FOR THAT DEMOGRAPHIC SHIFT. IF YOU LOOK AT A CHART OF RENT GROWTH VERSUS VACANCY RATES, SO VACANCY RATES ARE HOW MANY UNITS ARE SITTING EMPTY, THERE IS A DIRECT CORRELATION. SO I DO THINK THAT SUPPLY IS PART OF THE ANSWER. SO, YES, WE'RE BUILDING A LOT BUT WE'RE STILL NOT MEETING DEMAND. IN TERMS OF SOCIAL HOUSING, IT'S A GREAT GOAL, BUT IT'S ALSO QUITE EXPENSIVE. YOU LOOK AT A PLACE LIKE VIENNA WHERE THEY MAKE SURE THAT EVERYBODY HAS AN AFFORDABLE PLACE TO LIVE. 60 PERCENT OF THE POPULATION LIVE IN HOUSING THAT HAS BEEN SUPPORTED BY THE GOVERNMENT BUT THE COUNTRY ITSELF DEVOTES 3 percent OF GDP TO HOUSING EXPENDITURES. AND I'M NOT SURE WITH THE FEDERAL GOVERNMENT HERE THAT'S A REALISTIC OUTCOME FOR THE GOVERNMENT HERE IN CANADA. SO IN THE MEANTIME, IF WE CAN'T GET THAT, WE DO NEED MORE SUPPLY, AND I THINK, YOU KNOW, REGULATION, NOT ALL REGULATION IS GOOD. WE NEED TO START LOOKING AT WHAT IS PRODUCTIVE AND WHAT IS UNPRODUCTIVE. SO WE THINK ABOUT THESE AREAS THAT ARE GENTRIFYING, PARTICULARLY, LET'S SAY, THE CITY OF TORONTO, WHY THEN IS THE MUNICIPALITY ALLOWING GENTRIFICATION AND KEEPING DEVELOPMENT OUT OF THOSE AREAS?

The caption changes to "Producer: Meredith Martin, @MeredithMartin."

Steve says WE'VE GOT A LOT TO CHEW ON HERE TODAY. I WANT TO THANK ALL FOUR OF YOU FOR COMING IN TONIGHT AND HELPING US OUT WITH THIS. DIANA PETRAMALA FROM RYERSON UNIVERSITY, CENTRE FOR URBAN RESEARCH; SHAUN HILDEBRAND FROM URBANATION AND ON THE OTHER SIDE OF THE TABLE MARTINE AUGUST, THE PROFESSOR IN THE SCHOOL OF PLANNING AT THE UNIVERSITY OF WATERLOO AND BENJAMIN TAL, DEPUTY CHIEF ECONOMIST, CIBC CAPITAL MARKETS, AND OF COURSE WE URGE EVERYBODY TO STICK AROUND AND WATCH "PUSH," THE DOCUMENTARY THAT KICK-STARTED OUR CONVERSATION HERE IN WHICH FOUR OF YOU ALL GAVE TWO THUMBS, OR I GUESS, EIGHT THUMBS UP, IF WE ADD THEM UP ALL TOGETHER... EIGHT THUMBS UP TO. THANKS, EVERYBODY. GOOD STUFF.

All the guests say THANK YOU.

Watch: The Financialization of the Housing Market