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~ By G. van HOUTEN

_ Housing which is a necessity of life,

@S become an expensive proposition
T the great majority of working’ peo-

Ple. It is a necessity of life which
‘Monopoly has taken advantage of in

€r to extract huge profits at the
nse of the working people. Devel-

pers, land speculators, construction

ene, producers of building materials,
nks and trust companies all cons-
iré to use their monopoly control of
the housing market to force up prices
nd rents to the level which they think
€ market will bear.

INVESTMENT
| ee

— a »

A 26% Price Hike

The facts bear out the experiences

Working people. In 1961, a single-
erally: dwelling in Metro.Toronto (as
Meorted by Multiple Listing Service

$1 2 cost the potential homeowner .
1334, In Marth, 1975 the average

Price was $58,205 or 256% higher

an in 1961. About 55% of this in-
r€ase was due to increases in interest

| Tates by banks and trust companies

as the Canadian Imperial Bank of

ie aumerce, Royal Bank, Toronto Domi-
',.°n Bank, Canada Permanent. Trust,

€tropolitan Trust, National Trust,

“Tust Général and others.
aM 1961 the typical mortgage was

sono on a $16,000 home. The inter-
Tate was 6%, so, on a 25-year
Crtgage the monthly payment for

Mncipal and interest was $64. By

ae 1975, with MLS average home
Ces at $58,000, a $50,000 mortgage

Would be typical.: With an interest rate

qui , a 25-year mortgage would -re-
Te monthly payments of $516. -

*N other words, since 1961 interest
if eos have risen by 100% over the

pting people cannot fork out $516 a
nth, an amount which does not in-

é Aw rapidly rising municipal property

ae The other alternative that mono-
..¥ Would allow is an increase in the
8th of the mortgage to 40 or 50
ae. But. then the potential home-
€r would still be paying for his
Use after he has retired! :
Land Speculation
Land speculation is another major
% of rising prices. It accounts for
Since Of the rise in the cost of housing
Ash in their now famous report, “‘Pro-
™s‘in Search of a Policy — Low In-
: Tp ousing in Canada,” 90% of
and available for residential con-

a Uction in each of 12 metropolitan

reas is > é I 2
lopers. controlled by six major deve

Such corporations as Fidinam, Cadil-

-

€ of a 25-year mortgage. But most.

1961. According to Dennis and .

lome ¢ ip a dream
for most working people

lac, Markborough, Bramalea, Campeau,

and Trizec (not to mention others) use
their monopoly control of land to force
up prices. Profits “of 50 to 100% and
more, and up to 60% on sales of land
is very common. Consequently the last
few years have seen prices of lots for
housing jump by 200%. Lots which
sold for $3,000-$4,000 in 1961 are now
selling for $15,000-$20,000 and more.
Furthermore, these same so-called
developers are. also responsible for
rapidly rising rents. Central Mortgage
and Housing Corporation (CMHC) es-
timates that in the Metro Toronto area

there will be increases of 15% and
more. In fact it is not uncommon now
for rents to increase 50 or 60% in one
stroke.
Priced Out of the Market

There is ample evidence to show
that many working people who still do
not own their own homes are being
priced out of the market. High prices
and onerous mortgage terms deter
ever larger numbers of people from
buying a home. A payment of $515 on
principal interest on the average home
of $58,000 is far too high for most
people. Consequently there is a ten-
dency indicated by the rapidly growing
proportion of tenants to homeowners,

‘that working people avoid buying
- homes. But this tendency is also more

forcefully indicated by certain impor-
tant economic factors, namely the drop
in housing starts and the consequent
rise in unemployment. ;

In Canada, housing starts droppe
from 268,000 in 1973 to 220,000 in
1974, a drop of 17%. A CMHC report
released in March of this year indic-
ated an even greater drop in housing
starts. The report states that the house
building industry had its worst winter
in eight years. The seasonally adjusted
rate was 156,000 starts. Yet Finance
Minister John Turner had the gall to
claim that “one of the government’s
priorities is to . . . achieve a rate of
housing starts equivalent to 210,000 a
year.” The actual state of affairs in
Canada puts the lie to this govern-
ment’s intentions and proclamations. ©

Ontario Hardest Hit

The housing situation is worse in
Ontario than it is in all of Canada. And
the disparity between words and deeds

is even greater than at the federal

level. Housing starts dropped from
110,500 in 1973 to 85,000 in 1974, a
drop of 23%, In fact, Ontario was res-

- ponsible for more than half the drop of

housing starts in Canada. In 1974 the
ministry’s various programs such as
the Neighorhood Improvement -Pro-

gram (jointly with the federal govern-
ment’s CMHC), the Ontario Home Re-
newal Plan and the Ontario Housing
Program were supposed to facilitate
31,000 housing starts in 1974. They
actually delivered fewer than 15,000.

’ Even the Home Ownership Made
Easy did not make it easy to own a
home as this program produced 3,600.
starts instead of the anticipated 6,000.
With all these figures in mind, the pre-
sent housing minister then had the

nerve to say in his speech at the Royal

York Hotel last January that: “It ap-
pears we will come close to that figure
(of 31,100), with a possible shortfall
in assisted housing. The Tories newest
promise is 110,000 starts per year. But
with years of broken promises to their
record it would be a waste of time to
believe Irvine’s latest promise.

Monopoly’s Control

It is clear that both the federal and
provincial governments have no inten-

tion of going in a big way into the.

non-profit housing. Their stated opinion
is that “housing is primarily under-
taken by the private sector as a normal
production process carried out for
profit, and that the public sector’s main
responsibilities are that part of the
process not served by the private mar-
ket” (Comay Report, 1974). Monopoly’s
right to dictate the price of homes at
will is therefore consciously recogniz-

_ed by both levels of government. At

the same time they make promises ‘‘to

pick up the slack” which are never:

kept. The fall in housing starts is
clearly due to the fact that working
people cannot afford to buy a home,
both because of high prices and the
refusal of governments to intervene
on the working people’s behalf.
Unemployment is a direct consequ-
ence of the drop in housing starts. Ac-
cerding to a UE-IUE brief presented
to the Ontario government last April:
“It has been generally accepted that
each new housing unit built requires
approximately one man-year of labor
on site. One housing unit also provides
employment for approximately 1.5.
man-years of labor to supply materials
and furnishings.” In other words if

2
=|

the present 1975 trend of 156,000 units
continues (as compared to 280,000 in
1973) as many as 280,000 workers in
construction and related industries will
be unemployed in Canada in 1975. as
compared to 1973. 2 ?

The drop in housing starts, for
example, has contributed to massive
unemployment among woodworkers in
British Columbia. G. J. Jackson, presi-
dent of the Toronto Construction As-
sociation, admitted that 23% of the
30,000 members of the ,Toronto Build-
ing and Construction Trades Council
were unemployed in mid-January. He

predicted ‘“‘a major construction reces-
sicn” with 18 months unless the hous-

' ing situation was stabilized. Even

workers not working in the construc-

‘tion industry face layoffs due to the

sagging housing industry.
Labor Costs Drop

There is a need to make housing a
public . utility. Only then can homes
be built at reasonable prices. Contrary
to notions propagated by monopoly,
high prices are not due to high wages.
In 1961 labor constituted 19% of the
cost of a home, but in 1974 it was only
13.5%. In other words labor as a por-
tion of the cost of a home has dropped.

There is no question of the need and
demand for housing. However mono-
poly’s greed has priced homes beyond
the working people’s ability to pay.
Their greed has directly contributed to
massive unemployment throughout
Canada: Housing must therefore be
made a public utility so- that houses
can be built without incurring the
exorbitant expense of monopoly’s in-
satilable drive for profit.

A people’s housing program must
therefore include:

e Housing to be a public utility;

e@ A vast housing program of 400,000
housing units annually for low and
medium incomes; :

e Land banks to end speculation by
developers;

e An interest on mortgages of no
more than 5%.

e All taxes on building materials to —

be eliminated;

e Roll-back rents to their January
1974 levels; Rents geared to income;

e Remove education, health and wel-
fare from property taxation;

Canada has both the resources and
the labor-power to build those 400,000
homes per year. Not only would this
be a big step towards solving the hous-
ing crisis, but also a big step in allevi-
ating Canada’s massive unemployment.

PACIFIC TRIBUNE—JUNE 13, 1975—Page 9

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