Home 15 A_GooP ch ] ~ 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 ace caine mire: