Financialization of Purpose-Built Rental Housing

WomanACT’s submission for the National Housing Council’s Review Panel on the Financialization of Purpose-Built Rental Housing.

Financialization is a growing trend toward the use of housing as an investment to acquire wealth. Financial firms develop housing with a goal of maximizing returns rather than providing affordable homes for the community.

In January 2023, the National Housing Council launched a review panel on the “financialization of purpose-built rental housing.” The Council has invited individuals and organizations to address topics such as the impact of financialization on the human right to adequate housing, especially for communities that experience marginalization. Respondents may outline the actions and inactions by the federal government that have exacerbated the negative impacts of financialization. The panel would like to hear suggestions on how Parliament could address financialization and protect the right to housing. WomanACT prepared the following response.

Survivors of gender-based violence face unique challenges to housing. These include landlord discrimination, poor rental histories and economic insecurity. Survivors require a range of housing options when leaving violence. Financialization of purpose-built rental housing is an obstacle for survivors to remain safely in their private rentals or move to a new private rental, due to limited availability, accessibility and affordability of tenure.

In 2022 WomanACT conducted primary research with survivors on their housing needs and preferences.  In this study, affordability emerged as a key consideration for accessing housing—and ultimately acted as a barrier for many participants. Survivors often mentioned that their housing search was restricted due to finances. Moving expenses alone were prohibitive for some. Survivors faced various economic challenges such as insufficient social assistance rates, financial abuse that affected their credit scores or eligibility for income supports, and the inability to work due to trauma and harassment carrying over into the workplace. These challenges were exacerbated by the broader context of a housing crisis in which rents were becoming less affordable in general.

Survivors did not have one common housing trajectory when leaving a violent relationship. In the most prevalent experience, reported by 58% of participants, survivors left the shared home and their partners stayed. Survivors most often went to an emergency shelter (35%) or stayed with family (22%) or friends (18%). Some survivors initially remained in the shared home without their partners (14%). No participants reported moving to a new home in the private housing market immediately after separation; they had to choose inadequate accommodation options. Overall, 80% of participants reported first accessing a housing option that involved relocation. Many participants endured life disruptions after separating from their partners. At least half of the participants experienced a loss of control over their housing options, the risk of harm from their partner, and disruptions to their social and family relationships.

Impacts of the financialization of purpose-built rental housing on the right to housing

The financialization of purpose-built rental housing significantly impacts the housing system, by prioritizing short-term profits and driving up the prices of the most affordable housing.  This further marginalizes women and survivors of gender-based violence. In 2022, WomanACT researched survivors’ experiences in the private rental market in Toronto; our study shed light on these impacts and highlighted how financialization exacerbated the challenges faced by these individuals.

WomanACT found that most respondents (77%) experienced core housing need, where affordability standards were unmet. Rising rental housing costs made it increasingly difficult for women and survivors of gender-based violence to access and maintain affordable housing options.

Financialization can perpetuate discrimination and create additional barriers in the rental housing market. With the focus on maximizing profitability, landlords favour the most privileged tenants who, they assume, have higher and more stable income.

Our research revealed that 64% of respondents experienced discrimination from landlords during the rental application process, based on income source, family and marital status, or race and ethnicity. This discrimination limited the housing options available to women and survivors of gender-based violence, exacerbating their housing insecurity.

Financialization contributes to housing instability, which disproportionately affects marginalized groups. The research showed that almost one-third of respondents received eviction notices or were evicted from their rental units. Factors such as overdue rent payments and renovictions were cited as common reasons for eviction. The instability caused by financialization disrupted the housing stability of women and survivors of gender-based violence, making it difficult for them to find safe and secure housing.

The research highlighted that survivors relied on various supports and services, such as food programs and social support networks, to maintain their private rental housing and enhance their safety. The lack of affordable and adequate housing options caused disruptions  in accessing food and other vital needs. It compelled survivors to constantly rely on social support mechanisms which often were limited.

These impacts demonstrate that the financialization of purpose-built rental housing deepens the existing systemic issues within the housing system. It reduces housing affordability, reinforces discriminatory practices, increases housing instability, and limits access to vital needs for women and survivors of gender-based violence.

What could the Government of Canada do to address the impacts of the financialization of purpose-built rental housing, and advance the progressive realization of the right to adequate housing?

There has been a lack of robust policy, investment in affordable and social housing, commitment to the Right to Housing, and implementation of the right in federal and provincial policies. Also, actions such as Federal withdrawal from social housing provision in the 1990s, deregulation of rent control and policy support for the securitization of mortgages catalyzed the forces driving financialization. As a result, financialization has limited the access to safe and affordable housing for all Canadians, including women and survivors of gender-based violence.

To specifically address the impacts of financialization on women and survivors of gender-based violence, while advancing the right to housing, the Government of Canada could do the following:

Adopt gender-responsive approaches that recognize the unique challenges faced by survivors in accessing adequate housing. Incorporate a gender lens into housing policies and programs to ensure that survivors’ specific needs are addressed.

• Allocate increased funding for housing support services tailored to women and survivors of gender-based violence.  Funding can be dedicated to the development of permanent supportive housing options that prioritize affordability, safety and accessibility for survivors; trauma-informed counselling; legal aid; and other support services necessary to access and maintain secure housing.

• Recognize survivors’ rights to remain in their homes safely or move to a new private rental and adopt Safe at Home principles. This requires coordination among the justice system, housing providers, landlords and community agencies.

• Promote the provision of trauma-informed housing services for women and survivors of gender-based violence. Train housing service providers and landlords to understand the impacts of trauma, to create safe and supportive housing environments, and to offer specialized support services that address the unique needs of survivors.

• Foster collaborative partnerships between government agencies, housing providers and community organizations working with survivors. A coordinated approach ensures resource-sharing and knowledge exchange, to develop effective housing solutions and support services.

• Invest in data collection and research to better understand the housing challenges faced by women and survivors of gender-based violence, as well as their housing preferences. This could inform evidence-based policies.

The National Housing Council’s Financialization Review Panel is a good opportunity to look at the impact of a significant economic trend. In the research conducted by WomanACT, women and survivors of gender-based violence have shown how financialization marginalizes them further. There are important actions that the government can take to advance the right to adequate housing for communities left behind in the rush to economic growth.