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David Moscrop
David Moscrop is an author, columnist, substacker, and podcaster. He's written for major publications in Canada, the United States, and the United Kingdom. He holds a PhD in political science from the University of British Columbia. He lives in Ottawa.
Housing mania is gripping the United States and Canada – with millions wanting but unable to find an affordable place to live.
For years, both countries have faced a growing housing crisis. The pandemic exacerbated the struggle, and only now are governments starting to take the problem seriously. Still, securing affordable housing remains a daily struggle for would-be buyers, renters, and a growing number who are either homeless or under-housed.
In February, the median home price in the US actually fell to $400,500, a decline of 7.6% annually, but housing remains unaffordable for the majority of the country. In December, a mere 15.5% of homes were considered affordable (mortgage payment no more than 30% of monthly income). A recent poll found that around half of aspiring buyers said they can’t afford a down payment and closing costs, though a mere 13% of would-be buyers said there was “nothing” keeping them from buying. This suggests that even those who might be able to afford a down payment face other challenges in the market. High mortgage rates, around 7%, “historically” low stock, and a lack of targeted rental and non-market units are keeping homes out of reach for Americans.
With homebuilders waiting on lower interest rates to initiate new builds, pressure on the market may grow in the short term. Housing starts were down in March, nearly 15% below February and 4.3% lower than a year ago.
In Canada, it’s even worse. Last month, the benchmark price was a whopping CA$720,000, up 2% over February with mortgage rates hovering between 5 and 6%. Homeownership now costs nearly 63% of the median household income, up from 35% in 2002.
High housing costs are also driving up inflation – as in the US – and the country also faces a supply shortage. In 2022, the Canada Mortgage and Housing Corporation said the country would need 5.8 million new homes by 2030 to reach affordability. Yet, new builds fell in March, down 7% from February, and the six-month trend is also down, which means the country isn’t building nearly enough housing. There is one exception: British Columbia, with starts up 27% in Vancouver, as the province pushes new builds through a series of measures, including zoning reform to push beyond a focus on building single-family dwellings and pro-density minimum building requirements.
Why are houses so expensive?
Prices are high thanks to high demand and low stock, as usual, but there’s more to it. There’s also a lack of political action to build or encourage the building of housing people need where they need it – for instance, non-market units, purpose-built rentals, multiplex units – which is keeping stock low for segments of the population, including younger buyers and lower-income earners.
Ottawa ceased its involvement in building social housing in the 1980s and 1990s, which hasn’t helped. The US has long been a laggard on social housing, though in recent years some municipalities are starting to build publicly owned units.
Exclusionary zoning – or “not in my backyard” NIMBY-ism – has been another hurdle in both countries, with cities fighting the density necessary to build at scale and homeowners keen to protect their home values by keeping new housing out. A jump in the number of newcomers in Canada, about 471,000 last year, also contributes to market pressure.
Labor shortages are also hampering new builds in both Canada and the US, with the latter still slowed by the legacy of the Great Recession, which did more damage stateside than up north.
And then there’s the elephant in the room: the financialization of housing through which big institutional investors dominate the market looking for returns on their capital. This pernicious problem stems from seeing houses as assets first and foremost, a source of maximized profit, which invites speculation and market dominance by institutional investors who seek to inflate prices. Smaller investors, meanwhile, simply buy and flip properties.
Thinking of housing as an asset also means that individuals may see their homes as investments for retirement. Housing policy expert Carolyn Whtizman says “since the 1970s, the federal government has been treating housing, particularly ownership housing but more recently multifamily apartments, as the primary investment vehicle for retirement.”
“Housing in the US has always been an asset for the middle class,” says Noah Daponte-Smith, an analyst at Eurasia Group. “Your house is your primary retirement savings vehicle.”
Housing investors and those who rely on their homes for retirement planning want, even need,higher prices, which leaves millions priced out of the market or stretched to the brink.
In Canada, the share of investors and repeat buyers in the market has risen precipitously compared to first-time buyers, with investors accounting for 30% of purchases last fall. In the US, first-time buyers make up a similar share of the market at 32%, and recent data suggests institutional investors could make up as much as 40% of the single-family detached home rental market in the next five years or so, which means higher prices for renters and buyers alike.
What’s going to make housing affordable?
Solving the housing crisis will take years of commitment to a number of measures. Whitzman says Canada needs a period of stable house prices and rising incomes to produce an affordable market, but it also needs government involvement in building or incentivizing stock that matches the needs of buyers and renters at various price points. The same is true in the US.
The other side of the equation is income – namely, people need higher salaries. Half of Canadians now live paycheck-to-paycheck, and a whopping 78% percent of Americans are in the same boat, which leaves no room for saving for a down payment.
Stabilizing requires efforts and cooperation by governments at the national, state/province, and local levels. One approach could be ending the capital gains exemption on the sale of a principal residence to dampen demand, just as, according to Paul Kershaw of Generation Squeeze, taxing home wealth and using the cash to build affordable housing would have a similar effect while increasing stock.
What’s being done now?
In recent years, and especially in the last few months, the Trudeau government has awoken to the need to go all-in on housing. Its 2023 Housing Accelerator Fund helps municipalities build homes, trading federal cash for national building goals, including upzoning, transit accessibility, and affordability. The fund is expected to generate 750,000 new builds in the next 10 years, and so far the feds have greenlit 179 local applications.
In Canada’s federal budget, tabled on Tuesday, the government committed to several measures focused on housing affordability to build what it says will be 4 million homes by 2031. Those include longer mortgage amortization periods, $15 billion for construction loan programs, $6 billion in infrastructure funding, and buyer tax breaks. It also promised to “restrict the purchase and acquisition of existing single-family homes by very large, corporate investors,” but those details are to be determined in the fall after consultations, and the promise itself is full of asterisks, such as “existing” and “very large.”
Stateside, Daponte-Smith points out that while there is a housing crisis, “especially in major metro areas,” no national housing strategy exists. Instead, housing policies are “determined at the state and really even at the local level,” which means that every builder has to deal with a different set of local laws and zoning codes that control what they can build and how expensive it will be.
The Biden administration is increasingly aware that it needs a housing strategy. In March, the White House announced the latest in its housing affordability plan, which includes pressuring Congress “to pass a mortgage relief credit” worth $5,000 a year over two years along with $25,000 as a cash grant for down payment assistance for first-time buyers. On the supply side, the administration is also calling on Congress to boost new builds with builder tax credits and announced grants for new builds of affordable units for buyers and renters.
Electoral consequences?
Both governments are under pressure to deliver affordable housing but are hampered by long timelines, limits on labor and capital, the need to cooperate and coordinate across levels of government, and views that housing is an asset rather than a human need.
Voters expect the Biden administration, Trudeau government, and their state/provincial and local governments to deliver, and they’re increasingly impatient – meaning they may punish those that don’t at the ballot box.
With both Joe Biden and Justin Trudeau facing voters in November and by the fall of 2025 respectively, you can expect both men to continue working on housing affordability – to get first-time buyers into the market and rents down for those unable or uninterested in buying. But they’ll be battling an intransigent market that serves investors and incumbents, and the fact that even in the best-case scenario there will be a lead time between better housing policy and good outcomes at scale.
Former President Donald Trump arrives at Manhattan criminal court with his legal team as jury selection continues in New York City on Thursday, April 18, 2024.
Think back to 2016 and recall how Donald Trump absolutely dominated media coverage and, despite repeated scandals, won the White House. Four years later, he nearly repeated the feat.
Today, 2024 is shaping up for a similar focus as the former president’s first criminal trial gets underway in New York, with the spectacle of juror selection proceeding slowly as the sides try to find mutually acceptable, “unbiased” jurors. It was two steps forward, two steps back today as two of the seven jurors sworn in earlier this week were excused from the trial.
While recent polls have somevoters coming around to Joe Biden on the economy, the race is close – in fact, other polls have Trump ahead on economic matters. Trump’s capacity to stay competitive so far suggests that even his persistent legal troubles might not hurt him with his base. But a recent poll found that 36% of independent voters would be “less likely to support [Donald] Trump” if he’s convicted on any of the 34 felony charges in the so-called hush money case.
Up north, the Trudeau government is preparing for a possible Trump return. This means maintaining a Team Canada approach, working across levels of government, departments, and economic sectors on both sides of the border to prepare and protect the country from whatever uncertainties might follow a Trump win. News this week suggests that could include a plan to devalue the US dollar to close trade imbalances, a move that would throw the US-Canadian free trade relationship into chaos and would require Canada to play ball.
As Graeme Thompson, a senior analyst at Eurasia Group says, US policies have a major impact on Canada. “If the US ever went forward with a plan to devalue the dollar,” he says, “it would put a lot of pressure on Canadian policymakers to stay aligned with the US or else risk a comparatively overvalued loonie, which would in turn make Canadian exports less competitive.”
So it won’t just be Americans following every beat of Trump’s trial and the months to come as the former president attempts a comeback. Canadian policymakers – and the global banking and business communities – will keep a close watch and prepare contingency plans for whatever may come after Nov. 5.
House of Representatives Speaker Mike Johnson (R-LA) speaks to reporters during a weekly press conference at Capitol Hill in Washington, DC, on April 16, 2024.
It’s a bit surprising that anyone wants to be Speaker of the US House of Representatives. Six months ago, Speaker Kevin McCarthy was ousted by fellow Republicans after he dared to cooperate with House Democrats on funding the government. His replacement, Mike Johnson, now faces a battle to retain the gavel as he attempts to navigate between Democrats and an increasingly fractured GOP with rabble-rousers like Rep. Marjorie Taylor Greene raising objections to foreign aid and threatening the Speaker’s job.
Facing threats from Republicans opposed to an aid package for Ukraine supported by the Biden administration, Johnson has cooked up a plan to “damn-the-torpedoes,” as Politico puts it, and go forward with the bill and two separate votes on additional aid packages: one for Israel in the wake of Iran’s attack and one for Taiwan. He also intends to pass two other bills (five in total), including one to increase border security and another that takes aim at Russia, Iran, and TikTok.
“My philosophy is you do the right thing and you let the chips fall where they may,” Johnson said about his plan to bring the bills to a vote this week. And fall they may as the MAGA crowd prepares reprisals, including meddlesome amendments or even a motion to vacate and boot Johnson from his position.
So now begins the battle between Johnson and hardliner Republicans, which in the next few days will shape not just the three bills in question and global geopolitics, but how Congress operates – or doesn’t.
The speaker struggle stands in contrast to a recent kerfuffle in Canada, where Speaker Anthony Rota resigned after his office welcomed a Ukrainian veteran who fought for the Nazis during World War II into the House of Commons. Rota was quickly replaced by Liberal member of Parliament Greg Fergus, and business in the Commons soon returned to its boisterous but mostly functional baseline.President Joe Biden speaks as he announces a new plan for federal student loan relief during a visit to Madison Area Technical College Truax Campus, in Madison, Wisconsin, on April 8, 2024.
With President Joe Biden and Prime Minister Justin Trudeau facing upcoming elections, the battle is on to capture young voters. Biden will face former President Donald Trump next November, and the next Canadian election is due by the fall of 2025, but both contests are already underway. Younger folks in both countries are turning increasingly sour on the status quo as they face affordability challenges and feel left behind.
Trudeau has expressly said his government was focusing on Gen Z and millennials, “restoring fairness for them.” And on Tuesday, his government unveiled its “Gen Z budget,” going all in on measures for parents with younger children (new cash for childcare and a school food program), students (interest-free student loans), and housing policy aimed at opening space in the market for younger buyers who’ve been shut out in recent years (with a first-time buyer, 30-year mortgage amortization period and tax breaks for home purchases).
In the US, young voters are focused on affordability, abortion rights, the environment, and student debt, and Democrats will need those folks to turn out on Election Day if they hope to retain the White House and make gains in Congress. Those 43 and under are frustrated with the housing market. Democrats are working to get on abortion rights on the ballot in key states, and the Biden administration is touting the impact of its Inflation Reduction Act on the environment. The president also hopes efforts to eliminate student debt will help alleviate some cost-of-living concerns for young voters.
But Biden is also facing a backlash from Gen Z voters over Gaza and US funding for Israel. The president had hoped tougher talk on Israel would boost his reelection bid, but that’s been complicated by Iran’s attack – although the administration has told Israeli Prime Minister Benjamin Netanyahu that it won’t support reprisals against Iran.
Both Biden and Trudeau need younger voters to turn out to vote for them. In 2016, Biden dominated the Millennial and Gen Z vote by about 20 points over Trump. And while Canada’s Liberals managed a minority government in 2021 with a youth vote that was likely a near-split with the Conservatives, younger voters played a crucial role in Trudeau’s 2015 majority government victory.
This means the coming months will see increasing efforts focused on wooing younger generations.
Signs welcoming Indiana Fever's new player Caitlin Clark, at Gainbridge Fieldhouse in Indianapolis.
It’s been a big week for professional basketball leagues catching heat. Fans were outraged to learn that college basketball legend and all-time NCAA top-scorer and top WNBA draft pick Caitlin Clarkwill earn a meager $338,056 over four years with the Indiana Fever.
That means, Clark’s earnings will be less than 1% of the 2023 NBA top draft pick, Victor Wembanyama’s $55 million deal. It’s even lower – much lower– than some NBA mascots.
Sure, Clark is set to make $3 million in ad deals, but the gender pay gap point remains, particularly as the league continues to grow. The WNBA draws fewer attendees, television viewers, and broadcast rights revenue, which means its players have a weaker collective bargaining agreement. But with a star like Clark – who is already helping set WNBA viewership records – that balance may begin to shift thanks to a one-woman rising tide that will lift other boats.
But Clark’s pay wasn’t the only pro basketball scandal. This week, Toronto Raptors forward Jontay Porterwas banned from the NBA after an investigation found him guilty of colluding with sports bettors. He was, according to the ruling, providing information to them and betting on games, including against his own team, and “limiting his own participation in one or more games for betting purposes.”
While Clark’s contract called attention to gender-based pay discrepancies, Porter’s ouster has raised questions about player’s involvement in betting scandals (and sponsorship deals with gaming outlets) – something that has become more common following the 2018 US Supreme Court’s decision to strike down federal laws against betting on professional sports. With a bigger pool of bettors offering more opportunities for such insider betting scandals, could it be time for the legal ban – or at least limits – to rebound?Houses are seen under construction in a neighbourhood of Ottawa, Ontario, Canada.
Justin Trudeau’s Liberal government is going all-in on housing. The government has been rolling out announcements ahead of the official budget drop on April 16, a departure from the tradition of politicos trying to keep a tight lid on plans.
This week, as the country grapples with a housing affordability crisis, the government announced CA$6 billion in funding for home building and municipal infrastructure. But a few provinces, including Alberta and Ontario, pushed back, complaining about the strings attached to some of the cash, which would require provincial governments to permit builders to put up fourplexes without needing special approval.
Alberta is complaining the feds want to “nationalize” housing, which is a provincial constitutional responsibility, but a policy area in which the national government has been involved for decades.
On Thursday, Trudeau announced another $1.5 billion to protect and extend affordable rental stock, which is desperately needed in a country, where the average one-bedroom apartment goes for nearly $2,200 a month.
Stateside, the General Accounting Office said last year that the country was facing a shortage of affordable housing that’s been a growing supply since the early 2000s – and a broader supply shortage that isn’t helping matters.The average rent in the US is now just under $2,100 a month. But Congressional fights over funding have led to limited cash for making affordable housing more prevalent.
Smooth sailing for LNG amid Biden’s pause, Trudeau’s hesitation, and Johnson’s political gamble?
If you thought America’s liquefied natural gas policy had nothing to do with Russia’s war in Ukraine, think again. LNG is all over the news right now, thanks to House Speaker Mike Johnson (R-LA) cooking up a plan to link the issues.
Meanwhile, north of the border, Canada is having its own LNG squabbles as the future of the multibillion-dollar industry is being debated. Tensions between the federal government, which is increasingly weary of fossil fuel mega-projects, and provincial governments keen on resource revenue, are shaping the debate.
And so are considerations about what’s happening down south. In January, the Biden administration suspended pending approvals of LNG exports to countries with which it doesn’t have a free trade agreement. It’s waiting on the Department of Energy to sort out what these exports mean in terms of costs to US consumers and climate impact. The pause came in no small part thanks to the efforts of climate change activists.
Observers suspect Trudeau can’t get too far from Biden on the issue, and cross-border climate activists used Biden’s more aggressive climate policies to try to box in Trudeau. In January, Biden’s LNG pause put Canada’s LNG export policy in the spotlight, pressuring the country to enact its own moratorium (which it hasn’t done) – especially if it hopes to meet its 2030 climate goals. Also, the LNG market is only so big and may be headed for a glut, so US projects or exports – or a lack thereof – shape Canadian calculations.
When the US suspended new LNG approvals in January, President Joe Biden was quick to point out that the pause wouldn’t affect existing exports to US allies in the “near term.” But in the long-term? A lot depends on the global market, geopolitical considerations, and domestic politics, including climate activist pressure on Biden – who faces a reelection battle in November.
Biden was nonetheless keen in January to make everyone aware the US remains the top LNG exporter and that the energy source wasn’t going to stop flowing overnight. In fact, the administration expects export capacity to more thandouble by 2028, and last year the country’s LNG project approvals were record-setting.
The trade authorization review is important because it calls into question how viable LNG projects and exports will be long term in a world in which climate policies are moving away from fossil fuels, which are facing increasing competition from renewables. But it may also be up for negotiation.
Biden wants desperately to get an aid bill through Congress to fund Ukraine’s defense efforts against Russia. The Senate has passed a bill, but it’s stalled in the House, where Johnson has held it up.
Facing pressure from his own party, who oppose the Ukraine aid package, Johnson – who is also fighting to retain his gavel – has dreamed up a trade that involves putting the aid bill to a vote and backing it in exchange for Biden reopening the LNG taps. Trouble is, that may not be enough for GOP hardliners, or at least not enough of them to get the thing passed, which would compromise not only the Ukraine aid deal but Johnson’s speakership and political career.
The plan wasn’t initially warmly embraced, particularly among the right-wing GOPers more focused on border policy than LNG. On the other side of the aisle, Democrats weren’t super enthusiastic about it either, and climate change activists and politicians are pressuring Biden to reject the deal. On Tuesday, Reuters reported that White House sources said the administration was open to the deal, pending a look at the full plan, but a White House spokesperson said the report was untrue and that President Joe Biden stands behind the pause. All of this back-and-forth and crossed wires suggests Johnson’s deal might be more of an opening bid than a final one.
Noah Daponte-Smith, a US analyst at Eurasia Group, says this is merely “the negotiating stage,” noting that whether the Ukraine package gets through Congress is another matter. Johnson is trapped between his own party and Democrats, both of whom he needs if the Ukraine bill has any chance of passing.
The Democrats want a clean bill – with no extra measures – which means they aren’t interested in LNG additions. Even Johnson isn’t “enormously committed” to LNG, according to Daponte-Smith, but the speaker is running out of options.
“I think he wants to hold on to the gavel and this is something convenient he can put forward to the Republican caucus,” he says.
The border deal is a non-starter for the Ukraine package, Daponte-Smithe says, given that former President Donald Trump has declared it dead.
And it’s not just the US squabbling over LNG.
Last week, Canadian Energy and Natural Resources Minister Jonathan Wilkison said the Liberal government wasn’t interested in funding future LNG projects. Beyond what’s already in the works, no more LNG projects will open in Canada unless the private sector is willing to go it alone. As of December, there were eight LNG projects in development worth over CA$100 billion, which includes the LNG Canada project, which Ottawa sank CA$275 million of public money into back in 2019, calling the project an investment “up to $40 billion” that “will lead to 10,000 middle-class jobs.” How times have changed.
Ottawa is turning its back despite Greece recently expressing interest in buying LNG from Canada – as have Japan and Germany. A few years ago, Prime Minister Justin Trudeau wasn’t convinced of the upsides to shipping LNG to Europe, and Wilkinson’s latest comments suggest the PM hasn’t changed his mind. Of course, just because there’s demand for Canadian LNG today doesn’t mean there will be tomorrow, and the IEA expects slower demand growth in the years to come.
LNG opponents suggest the future for the energy source is dim and are calling for Canada not to see any US slowdown on LNG as an opportunity to fill the gap. Since nuclear starts and restarts are on the rise in Asia, and renewables projects are soaring globally, the world faces a potential oversupply of gas.
Neither the US nor Canada are going to fully halt export and development anytime soon. But the fact that the Biden administration and Trudeau government are even the slightest bit weary of LNG projects is a major development in energy and climate policy.
Laura Luciano of Stockton looks at the solar eclipse looks through special glasses during a watch party held by the Delta College Physics-Math-Computer Sciences Club and the the Stockton Astronomical Society on the campus of San Joaquin Delta College in Stockton on Oct. 14, 2023.
A rare total solar eclipse in North America next Monday has people set to flock to spots along its path of totality, but there are a couple of things to know before you go.
First, it’s dangerous. If you’re going to peek at the merging of celestial bodies, get proper eye protection to prevent the fluid in your eye cells from boiling.
Second, be patient. Cities and entire regions are preparing for the event, with a number of them already declaring a state of emergency ahead of the surge of visitors. Officials are concerned about the strain on fuel, first responders, cellular service, grocery stores, and roads.
The Niagara region in Canada, a prime viewing spot, declared a state of emergency as it anticipates a million visitors. Bell County, Texas, another choice viewing location, is concerned that its population may double with eclipse watchers. Other counties are doing the same, including Oswego County and Jefferson County in New York.
Unfair punishment? New York inmates are suing the government for the right to watch the eclipse, citing religious rights, after state prisons instituted a pre-event lockdown.
We’ll be watching this one – presuming the clouds steer clear – with the proper safety eyeglasses, of course.