Housing's Tautological Truism

On Abacus' Housing Polling

One of the choices the Federal Liberals have made in the Housing space is refusing to want prices to fall. This is explicit, or as explicit as the Liberals can be, government policy. Trudeau has been given the opportunity to say he supports real reductions in housing prices for a year now, and has continuously declined to do so. The conventional wisdom is that telling homeowners - a majority of the voting base - that their assets declining is a government priority would be bad politics.

It’s why the government has focused so much energy on purpose built rentals, too - the belief that a housing policy that reduces existing equity too much would be too radical for the public, and doom the proprietors of it to electoral irrelevance. It’s also why Paul Calandra’s original housing bill this year got watered down so heavily - the original draft did include some amount of province-wide upzoning as of right, per sources, before the Ontario Cabinet took that out due to concerns about suburban homeowners revolting. It’s a truism that the price of keeping the home owning old onside is to protect their equity. Except, it might not be true.

New polling from Abacus Data suggests that it’s not a political liability anymore - 29% of Canadians would be much more likely to support a party that explicitly supports policies to lower housing prices, and another 37% would be somewhat more likely. Only 13% would find that to be a detriment to their chance of supporting such a party. 42% of voters under 30 - a group that Liberals have been bleeding with - would be much likelier to support a party willing to explicitly support lower prices.

And if the conventional wisdom is this wrong, then every progressive politician in this country should be willing to say as much, and finally endorse a language on housing policy there is clearly a yearning for; It’s Time To Lower Prices.

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I have no proof for this in this specific context, but the concept of a credibility gap is real. Nixon was the only one who could go to China; Boris Johnson sold Britain on a glorified version of Theresa May’s deal and won a landslide on a manifesto she would have won 200 less seats with. The concept of a credibility gap is twofold; usually, it’s that the person selling the argument can’t be trusted. It’s why May couldn’t convince Brexiteers she was really about that life, and really going to deliver a hard Brexit by the end, but Boris “£350M a week for the NHS” Johnson could.

The other form of credibility gap, however, is between what a politician says and what they very obviously mean. It’s common that politicians moderate their language to try and placate certain groups, but there’s also often a gap between words and actions. We’ve seen this in America recently, where even those pushing for peace got caught in a trap of not using the precise language of a “permanent ceasefire” as quickly as some wanted. The thing is, voters who care about certain issues aren’t paying attention to the entire text of an economic policy, oftentimes they’re scanning for intent. And here, for all the good work the Federal Liberals have done and are doing with the Housing Accelerator Fund and the various deals they’ve struck, nobody believes them or cares because they refuse to be honest.

What governments want is a mythical soft landing solution to the housing crisis, where they kind of solve the problem without pissing anyone off. What everyone wants is to keep prices nominally flat for long enough with increases in supply that wage gains make those prices less unaffordable and a real terms cut in prices that is a nominal price freeze is good enough for everyone. It’s not, and will never be, but it’s the fantasyland that everyone has been hoping will somehow magically appear. It’s a fantasyland that is becoming harder to achieve due to the government’s immigration policy, but the fact that prices can't go down has been the bipartisan consensus across the country for two decades now. And it seems like the dam has burst.

Every progressive politician should internalize two very basic points: that plenty of voters will not believe you if you claim that there is some magical fairy ride that will get us from where we are to a fixed housing market without price declines, and that price declines aren’t to be worried about politically. Only 60% of Canadian homeowners have a mortgage, and there can be no less sympathetic group of people than people with fully paid off houses complaining about price declines. I’d pretend to be sorry you only netted 1.3M on your Rosedale house and not 1.6M, but I’m not.

The truth is voters will not take seriously a housing solution that caters to Boomers’ equity above the interests of the young and the renting class who are feeling more and more destined to what every Canadian government is telling them is a second class citizenship. Progressives need to be honest - we have allowed existing equity to stop us from doing what we need to stop this housing crisis. We have catered to those who own and those who would be the losers from lower prices for too long. It is time for progressives to care more about those without than those who already have.

Abacus proves voters want lower house prices. The country needs to reset the playing field. Now it’s time for progressives to come together. It’s Time To Lower Prices.