Last year, we continued to highlight the issue of the financialization of housing and the harm is it causing to people and communities in Canada.
Canada is seeing a growing trend of financial firms using housing as a commodity to grow wealth for their investors. Private equity firms, pension funds, and real estate investment trusts (REITs) are increasingly acquiring, operating, and developing housing as an investment strategy, with the aim of maximizing returns for shareholders.
This phenomenon, known as the financialization of housing, often sees these firms acquiring rental buildings and increasing rents or decreasing services to maximize profits. This trend is not only contributing to unaffordability across the country—it is also denying people their fundamental human right to affordable, dignified, and safe housing.
Research and engagement
A series of reports on this issue commissioned by the Office of the Federal Housing Advocate were published on September 8, 2022. The research reports have drawn wide attention and will be the focus of a study of the financialization of housing by the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities (HUMA). The adopted motion in October 2022 declared that it would examine “corporate ownership of single family homes, rent gouging and renovictions, and the impact of ‘real estate investment trusts’ (REITs) on the rental housing market.”
The research findings confirm that financialization affects disadvantaged groups most, such as seniors, low-income tenants, people with disabilities, members of Black communities, and many others. It is linked to unaffordable rent increases, worsening conditions and a rise in evictions and renovictions.
Financialization is not only affecting the rights of individuals and households—it is reshaping Canada’s housing system in dangerous ways. The research estimates that about one third of all seniors’ housing in Canada has been financialized, along with 20-30 percent of purpose-built rental buildings.
The Advocate looks forward to appearing before the HUMA Committee to discuss the harmful effects of financialization and share options that policy makers can take to curb this issue.
Review panel
On September 23, 2022, the Advocate issued a formal request to the National Housing Council to launch a review panel on the human rights impacts of the financialization of purpose-built rental housing. This is the first time the Federal Housing Advocate has referred a systemic housing issue to the National Housing Council for further examination by a review panel.
In March 2023, the National Housing Council announced plans to launch the review panel. The review panel—made of up of three members of the National Housing Council—will collect written and oral hearings from members of the public, human rights organizations, and experts. Finally, it will issue a report with recommendations for action that the government of Canada should take to address the financialization of purpose-built rental housing and advance the right to housing in Canada.
Review panel hearings centre around public participation, particularly for communities directly affected by systemic issues. The hearing will provide an opportunity for tenants and others to share their experiences with financialization and the solutions they want to see.