Home ownership and public policy

As noted in the previous post, the federal government is moving to reduce the risks associated with mortgages that can contribute to high levels of household debt, and other policy analyses have flagged high consumer debt as a problem.  At the same time, public policy goals are often seen to be supported by home ownership.

Most notably, intentionally affordable home ownership is one of the approaches that is cost-shared in most, if not all, bilateral agreements between the federal and provincial governments under the Affordable Housing Initiative.

There are several models of “affordable” ownership, which are described in a recent Senate Committee report on poverty, housing and homelessness in Canadian cities.  In some cases, governments contribute land and/or reduce or eliminate fees or taxes for a period to lower costs.  In most cases, houses are renovated or condo units built without a lot of the luxuries that could also raise costs. Some projects are offered at affordable prices only to the first buyers, and others maintain low prices for subsequent buyers; some allow for owners to benefit fully from increases in housing prices, while others allow only for cost-of-living returns on the housing investment.

So, while it may seem paradoxical to promote home ownership among low-income people on the one hand, and restrict access to mortgage money on the other, home ownership has often been touted as a strong predictor of increased assets and equity that can lift a family out of poverty, or prevent poverty in the first place.

For example, Habitat for Humanity includes in its mission the promotion of home ownership “as a means to break the cycle of poverty” as articulated in the local organizations in Halifax and Regina A similar claim is made for another affordable ownership program in Toronto.

But home ownership is promoted for more than its poverty-reduction or prevention potential. Home ownership is a recommended policy as well for First Nations, especially on-reserve, from sources that vary from the Canadian Real Estate Association, to the 2009 federal budget, which cited its value, in part, as the opportunity “for First Nations families to build equity and generate wealth.”

Home ownership is also associated with lower risks of becoming a victim of a crime, and at least the hope of reducing crime rates by stabilizing neighbourhoods. It therefore finds itself onto crime prevention policy agendas as well.

Finally, home ownership is being proposed as a sound policy to promote health. According to some Canadian research. the lack of home ownership is a predictor of chronic disease among low-income people.

Still, not all analysts believe that home ownership promotion is always the preferred  form of housing for public policy purposes.  For example, housing policy and researcher David Hulchanski has long argued that home ownership is currently heavily subsidized with many different policy measures, at the expense of public investment in rental housing, which is often  better choice for low-income families.

Finally, Michael Mendelson’s study for the Caledon Institute of Social Policy provides a detailed and rigorous analysis of the specific circumstances under which home ownership is a better option for low-income households.

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    • V
    • March 18th, 2010

    fyi – the links on this page are broken. Links point to your blog and then the link, resulting in page-not-found errors. For example:
    https://socialpolicycafe.wordpress.com/2010/02/20/home-ownership-and-public-policy/dsp-psd.pwgsc.gc.ca/collection_2009/…/85f0033m2009020-eng.pdf should probably read something like dsp-psd.pwgsc.gc.ca/collection_2009/…/85f0033m2009020-eng.pdf (note also the automatic “…” in the middle makes the link useless as is.)

    Thanks.

    • V
    • March 18th, 2010

    Sorry – it appears that the only two links I checked (CREA, crime victim) suffered from that problem, the others appear fine.

      • haviechenberg
      • March 18th, 2010

      Thanks for bringing these to my attention. I have fixed them, but please let me know if you continue to have problems!

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