Mark Carney’s new housing agency is built to protect the bubble

Housing advocacy groups have expressed varying degrees of optimism about the $13 billion the federal government allocated to Build Canada Homes (BCH) in its first budget since taking office. This is news many in the housing policy world have been waiting for. After campaigning heavily on the then-ill-defined BCH back in the spring, Mark Carney has now given some scale to the project and allowed the new home building initiative to take shape.

The agency’s mandate has finally been defined. Its job is to “help create the conditions” for a “non-market housing sector” that has a reduced “reliance on ongoing government subsidies.” This is a start, but with so few details, it’s difficult to assess how effective BCH will be at addressing housing affordability. The government has yet to release any firm targets, there is no projected number of non-market units to be built, no anticipated per unit rental cost, no clear definition of affordability, no target percentage of non-market housing in high-rent areas, and no guarantee that BCH homes will be owned by non-market stakeholders.

We can, however, infer something of the overall direction of the new agency from its public-facing literature and the credentials of the person who was selected to lead it. That person is former Toronto city councillor and one-time mayoral candidate Ana Bailão.

In her decade serving the city of Toronto Bailão built a reputation as a strong advocate for real estate interests. She reduced municipal charges on developers, handed over large swathes of public land to private ownership, and cheered on the massive giveaway of public wealth that was the National Housing Strategy. While her work on Toronto’s housing issues didn’t do much to restore affordability, it did make her the toast of the industry. Bailão was seen as such a celebrated ally that after losing the 2023 mayoral race to Olivia Chow she was given a senior position at Dream Unlimited Corporation, one of the city’s largest development firms.

Bailão spent two years working as an executive for the developer whose subsidiaries include Dream Residential and Dream Industrial real estate investment trusts (REITs), which together control $15 billion in assets. Months before she joined the Dream team, the company went into business with a sovereign wealth fund to buy $1.5 billion of property in the GTA. This hoarding of real estate by investment firms is the essence of financialization, and it is perhaps the single most significant factor driving the housing affordability crisis in Canada.

The fact that Bailão’s failed pro-corporate policies did not immediately disqualify her for the role of BCH’s chief executive is a clear demonstration of Carney’s priorities. By placing an industry insider at the head of his new affordable housing agency the prime minister has put the interests of developers and landlords first.

In her new role Bailão will be expected to create lucrative opportunities for big real estate investment companies through cheap loans, land deals, construction contracts, and management fees. This is built into BCH’s mission which, as stated on its own website, is to “finance affordable homes.” BCH will swing no hammers; instead, it will contract out the work of developing non-market housing to the private sector.

The agency promises to use these privately developed homes to “grow the supply of affordable and community housing led by mission-driven organizations.” Notice that the plan is to build housing that will be led by mission-driven organizations, not owned by them. This shifty language creates an important loophole: BCH homes are set up to be privately owned and NGO operated.

I spoke with a crisis worker in Edmonton who worked at a supportive housing site operating under this model. The 20-unit building is owned by a REIT called Mainstreet Equity and staffed by an NGO. Even though tenants pay near-market rents and Mainstreet hauls in enormous profits, the building is classified by provincial and municipal officials as “non-market housing.”

Another red flag is the language BCH uses to describe its mandate. Non-market housing funded by the agency must have a “reduced reliance on ongoing government subsidies.” In practice, this means one of two things: either rents will be set at a level that excludes the most vulnerable, or operators will be set up to fail. Without rent subsidies or expanded financial supports, BCH builds will either be unaffordable to those in deepest need, or will crumble into disrepair, becoming a future political excuse to argue that non-market housing doesn’t work.

Taken as a whole, the Liberal’s new housing agency signals a return to a public-private partnership (P3) model. We’ve seen this movie before. Stephen Harper’s “Building Canada” plan funnelled public money into P3 infrastructure projects that consistently delivered less for more, prioritizing corporate profit over public value. By appointing Bailão to head up BCH, Carney is importing the same profit-first mode

The writing is on the wall: BCH is set up to create a small, privately owned housing portfolio run by NGOs, a model far too weak to stabilize prices or challenge landlord power.

When Austria, Finland, and France used non-market housing to improve affordability in their cities they worked to ensure that 20-30 percent of all housing stock was owned (and often built) by non-market stakeholders. Canada’s new federal housing agency is neither financially equipped nor philosophically inclined to construct anything resembling that system.

We could do things differently. We could work to undo the financialization of our homes. We could follow European examples and build a decommodified housing system capable of providing affordable, dignified homes for all. But it looks like the Carney government doesn’t have the stomach for it. The prime minister has shown that Ottawa is still following Trudeau’s mantra that “housing needs to retain its value.”

The reasons for this are perhaps understandable. Canada has become a hostage of its own housing bubble. Our pensions, banking system, and key economic indicators are dependent on ever-rising property values. A genuinely ambitious non-market housing program that successfully anchored prices would trigger a major wave of deleveraging, forcing a broad restructuring across large swaths of the economy.

Rather than face up to this reality and propose a vision for a Canadian economy built on something other than housing speculation, Carney has opted to prop up real estate interests. Build Canada Homes is designed to create the appearance of action on housing affordability while carefully ensuring its output is aligned with the landlords and developers Bailão so ably represents.

James Hardwick is a writer and community advocate. He has over ten years experience serving adults experiencing poverty and houselessness with various NGOs across the country.