To be alive in 2023 is to live in a time of crisis. Everywhere we turn it seems as if the institutions we have relied on are crumbling around us, as the conditions in labour, healthcare, education, and housing all become untenable.
Yet, to borrow a phrase, in capitalism crises are a feature, not a bug. Our society subsists on the exploitation of one class by another and thrives the more people are crushed beneath it. It is no wonder in a system this volatile that crises would be inevitable.
Capitalists know this too, and in fact they rely on it. While a crisis may mean the death and ruin of countless working class people, capitalists reap great profits from these bouts of economic chaos. This is no accident. In truth, this chaos is always present just below the surface. In truth, these crises are expected, they are planted and cultivated like seedlings in the field, nurtured so that all the capitalist has to do is wait until they bear fruit.
While my example today comes from the housing market in Ontario, it is nevertheless indicative of similar processes being carried out the world over. There is always a loophole.
The loophole and the damage done
Ontario’s Residential Tenancies Act of 2006 was thought to be a godsend for tenants at the time. Among other benefits it regulated rent increases to a maximum of 2.5 percent a year, offered tenants some legal protection against evictions, and solidified the duties of landlords to maintain their properties. But it also included this amendment:
Rent Deemed Lawful
36 (1) Rent charge one or more years earlier shall be deemed to be lawful rent unless an application has been made within one year after the date that amount was first charged and the lawfulness of the rent charged is in issue in the application. 2006, c.17, s. 136 (1).
Like many laws in capitalist society, you have to invert the perspective somewhat to understand its true meaning. From a tenant’s point of view it says this
Rent Deemed Lawful
36 (1) If a tenant is charged an illegal rent and does not make an application to challenge its lawfulness within one year from the date that amount was first charged, it will become the tenant’s legal rent from then on. 2006, c. 17, s.136 (1).
In other words, through lying, con-artistry, and outright theft, landlords can do everything in their power to keep a tenant from realising their rent has been raised illegally and if the tenant does not notice and take steps to stop it themselves within 12 months, it becomes legal.
Landlords were quick to pounce, relying on a lack of public education of the law and the slow decimation of social services to push their racket. Even so, a landlord’s primary weapon is fear. Since ‘market rent’ in Ontario is whatever a landlord can get away with charging, landlords can pressure tenants with the knowledge that if a tenant wants to move, it could mean paying double the rent in a new unit. A small percent increase to the rent, even an illegal one, pales in comparison.
When confronted with this extortion, the capitalists claim they made honest mistakes, that they had no idea that anyone could abuse a loophole in this way. But honesty is not a virtue in capitalist society, greed is. This amendment effectively legalises the criminal exploitation of tenants, any explanation offered for it aside from that is nothing more than gaslighting.
At the same time, this single law is not solely responsible for the out of control rental market in Ontario or the effects of that. It is just one of many loopholes that are buried at all levels of governance for the express purpose of increasing the wealth of the capitalist class, installing pathways towards further exploitation and crises in the future.
Modern housing and its effect
Over the past few decades, the Canadian housing market has become the plaything of speculators. As inflation pushed home ownership out of reach for more and more working class people, investors seized on opportunities such as the 2008 subprime mortgage crash to expand their portfolios by snapping up private homes and converting them into rentals. A new business model emerged, one meant to ensure that tenants could never save enough to own homes again and would remain under the thumb of landlords until their dying day.
Landlords are not shy about portioning off some of their capital to exert influence on governments either. 2018 was a pivotal year in Ontario’s downward spiral. As the Progressive Conservative government came into power with Premier Doug Ford at the helm, the party furthered the agenda that the Conservatives and their counterparts in the Liberal Party had been pursuing since the so-called Common Sense Revolution in 1995.
Ford, whose largest donors happen to be landlords and developers, quickly decreed that housing units built after 2018 would be exempt from rent regulation. Any incentive for landlords to maintain their properties disappeared overnight as it became more profitable to let their buildings fall apart as an excuse to evict tenants and redevelop those buildings without rent control and at a greatly higher rent. Where the priced-out tenants are supposed to go is not of their concern.
That same year, MPP Caroline Mulroney was appointed Attorney General of Ontario just long enough to cut $133 million from Legal Aid Ontario. Mulroney, who happens to be married to an executive at global housing behemoth Blackstone Inc., slashed 30% of the non-profit’s meagre budget in order to greatly reduce legal services available to working class people. The following year, another $31 million was cut by Mulroney’s successor, MPP Doug Downey.
Although the process was already well underway, the Covid-19 pandemic accelerated a shift in housing ownership as small fish landlords were gobbled up by sharks. This is the growth and spread of the corporate landlords and real estate investment trusts (REITs) that dominate today. These international housing barons operate purely as a business, they advance capital and expect a return on investment. ‘Humanity’ is not a column on their ledger.
Far from being a source of ‘passive income’ for landlords, working class housing is a scene of violence. There are only two ways to increase profits in housing; raise the rent above what a unit is worth or let a unit deteriorate long enough that its current rent becomes more than the unit is worth. Landlords employ both simultaneously.
As a result of the latter option landlords continue to outright refuse to maintain their buildings, leading to rampant pest infestations, walls full of leaks and mould, and faulty fire systems that could easily lead to another tragedy like Grenfell Tower in London. Reporting these issues accomplishes nothing, modern landlords can easily shoulder any pitiful fine thrown at them by bylaw officers while the Landlord and Tenant Board openly favours the wealthy.
I have seen buildings with so many health and safety issues that they amount to violations of the United Nations Human Rights Code, but under capitalism the right to own private property trumps all others. No matter what, landlords are allowed to keep making profits at the cost of their tenants’ quality of life, sometimes even of their lives entirely.
As laid out in the Canadian Mortgage and Housing Corporations 2022 report, the government’s response to the housing crisis is typically backward. Instead of providing more housing to the poor and working class people who so desperately need it or regulating existing housing, the plan is to build upper middle class housing far from where it is actually needed and hope that enough housing trickles down to the working class for them to stop complaining about it without any landlords having to sacrifice their profits. They then sweeten the deal with promises of more jobs, although they recommend employing the fewest number of workers for the least amount of money in the name of ‘efficiency’.
Part of this plan has been to develop on Ontario’s once protected Greenbelt, a move almost universally regarded as an ecological catastrophe in the making, with knock-on effects that could be felt for generations. It is not simply the loss of biodiversity, farmland, and forests, developing in the Greenbelt could also poison the soil and rivers to such an extent that clean drinking water will almost certainly vanish and crops grown there will become less nutritious before refusing to grow at all.
Out of one crisis, another is born. These are the only solutions capitalism has to offer.
The fact that this development is being pushed through by ignoring expert and public consultation and violating a slew of local ordinances and bylaws just further proves that the legal system truly only applies to the working class.
Rent and wages
Capitalists like to throw up their hands and blame the primal forces of supply and demand for the evils of the market. This is disingenuous. Even without loopholes to fall back on, corporate landlords can manipulate the housing market to their own ends.
With demand for housing naturally restricted by the economic limits of the working class, the only way for landlords to increase their profits is by tightly controlling supply. With individual landlords this can be frustrating, but the more housing that corporations control the more those corporations can affect the ebb and flow of rental rates. By leaving housing off the market, by converting it to short-term rentals or simply keeping it empty, landlords can intentionally drive down their own supply of housing to artificially increase demand for the remaining units and raise the rent appropriately. This is not a trick of the legal system, it is just how capitalism operates.
As landlords blindly reach for profits at their tenants’ expense, it would seem to put them in conflict with bosses in the labour market. After all, if landlords keep driving rent up it forces workers to demand higher wages from their bosses, conflicts which tend to throw businesses into disarray.
This illusion disappears once you see bosses and landlords working together as members of the capitalist class. Capitalists hate to part with their capital in the form of wages so they reclaim it in the form of rent, leaving the working class with little more than scraps to live off.
The question then becomes, if capitalists are manufacturing the demand for housing as well as providing the supply and the means of attaining housing, how fat can this golden calf get? Eventually, there will be a correction. With housing and development an integral part of Canada’s GDP, a crash in the housing market could have far reaching implications to the country’s economic future.
As always, this puts working class people in a pivotal position. With organised, militant tenants, we can resist criminal landlords. With organised, militant workers, we can demand higher wages for all. And with an organised, militant working class, we can bring about revolutionary change. In a time of crisis, that is what’s needed most.
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