Race and Inequality

The Housing Market Isn’t Racist. Blame Your Parents Instead

Peter Shawn Taylor
March 17, 2024
Diversity may be our strength. But it is now alarmingly commonplace in Canada to blame any perceived diversity in outcomes between racial groups on vaguely-defined “systemic racism” or “white supremacy”. Case in point: the Federal Housing Advocate’s allegations of rampant racism in Canada’s housing market, and the need to address it with outlandishly disruptive policies. Delving deep into Statistics Canada’s ample supply of race-based data, Peter Shawn Taylor considers the evidence for racism in Canadian housing, education, income and poverty statistics, and finds a more convincing explanation much closer to home.
Race and Inequality

The Housing Market Isn’t Racist. Blame Your Parents Instead

Peter Shawn Taylor
March 17, 2024
Diversity may be our strength. But it is now alarmingly commonplace in Canada to blame any perceived diversity in outcomes between racial groups on vaguely-defined “systemic racism” or “white supremacy”. Case in point: the Federal Housing Advocate’s allegations of rampant racism in Canada’s housing market, and the need to address it with outlandishly disruptive policies. Delving deep into Statistics Canada’s ample supply of race-based data, Peter Shawn Taylor considers the evidence for racism in Canadian housing, education, income and poverty statistics, and finds a more convincing explanation much closer to home.
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There’s no shortage of bad advice on how to fix Canada’s housing market. Proposals guaranteed to make our current housing shortage much, much worse are in ready supply from a variety of sources. But what if time is short and you need to access all the bad ideas in one convenient location? Then make haste for the Office of the Federal Housing Advocate (FHA).

The FHA was created by the Justin Trudeau government in 2022 to offer guidance on federal housing policy. Former professional accordion player Marie-Josée Houle is the first and only person to hold this position. And over the past two years she has established her office as Ottawa’s one-stop-shop for the worst possible advice on housing issues.

Houle’s primary obsession is with “financialization”. Her complaint being that the housing market is an actual “market” in which suppliers seek to make a living offering housing to people who demand it. The FHA instead wants to ban profit-making in housing provision. Her ultimate goal, as Houle recently wrote in the Toronto Star, is to ensure most of the new housing units Canada needs over the next few years are built on a “nonmarket” basis. Given the realities of home construction and public finances, it is a complete fantasy.  

The FHA also wants to make it nearly impossible for landlords to evict tenants for any reason, including non-payment of rent, as well as to impose nationwide rent control and grant homeless squatters property rights over public parks. All this is driven by the FHA’s oft-repeated claim that housing is a government-guaranteed human right in Canada. It isn’t.

One-stop-shop: Canada’s Federal Housing Advocate Marie-Josée Houle has established her office as the country’s go-to source for bad advice on the housing crisis; among her many obsessions are “financialization” and allegations that racism is rampant in Canada’s housing market. (Sources of photos: (left) The Canadian Press/Justin Tang; (right) Damien Storan/Shutterstock)

Another of Houle’s dangerous and alarming assertions is that Canada’s housing market is rife with racism, which must also be countered in dramatic fashion. A report her office produced in 2022, The Uneven Racialized Impacts of Financialization, states that “The violence of evictions and forced displacements stemming from the ongoing housing crisis in Black, Indigenous and other racialized communities exemplifies the severe consequences of the financialization of housing.” To rectify alleged housing market racism, the FHA report demands a variety of draconian policies, including a public takeover of privately-owned apartment buildings and a federal ban on lending by banks and pension funds to for-profit housing providers. The impact of such measures on housing supply would be devastating.

Like the rest of the FHA’s output, the claim that Canada’s housing market is inherently racist is delivered with maximum conviction, volume and outrage. Convincing evidence is harder to come by. The report mentioned above focuses mainly on American data and is peppered with vague statements such as “it might be hypothesized” and “in the opinion of the report’s authors.” The central accusation that housing racism is pervasive in Canada is supported only by the facile observation that low-income areas of Toronto are more prone to evictions, and that certain racial groups are more likely to live in low-income areas. Ergo, Toronto’s housing market must be controlled by racists.

There is, however, a wealth of far more credible evidence on the relationship between race and housing in Canada. And it tells a completely different story.

Trajectories May Vary

Moving out: In search of evidence of racial discrimination in the housing market, Statistics Canada recently looked at the “housing trajectories” of young Canadians by birth cohort and race. The results show significant variation across racial backgrounds, but nothing that smacks of racism or white supremacy. (Source of photo: Shutterstock)

Statistics Canada’s Centre for Gender, Diversity and Inclusion Statistics, created by the Trudeau government as part of its Anti-Racism Strategy, is tasked with surveying the country’s statistical landscape in search of evidence of discrimination or unfairness. Despite the federal Liberals’ best efforts at fostering racial discord, however, Statcan’s results generally reveal the many ways in which our country is not racist, and how it largely continues to be defined by the concepts of equal opportunity and merit.

A case in point is a report released just before Christmas that received no apparent media or other attention, entitled The housing trajectories of Canadian-born racialized population groups. The term “housing trajectory” refers to a person advancing through the housing market over time. The most common path involves growing up in your parents’ house, moving out to become a renter and then later achieving home ownership as an adult. The recent housing shortage and increase in mortgage rates have certainly made these transitions more difficult for all young Canadians. But if Canada’s housing market is as racist as the FHA claims, whites should have a much easier time navigating this trajectory than other racial groups.

The Statcan study focuses on Canadian-born individuals of all races. This avoids conflating race with immigration status, since new immigrants face numerous issues of language, credentials and employment that have nothing to do with racism. The authors divide Canada’s population into ten somewhat idiosyncratic racial groupings that range from country-specific to continental. They are: white, black, Chinese, South Asian (from India, Pakistan etc.), Filipino, Southeast Asian (from Thailand, Vietnam etc.), Arab, Latin American, Korean and Japanese. The report then examines how various five-year birth cohorts born between 1971 and 1995, encompassing Gen X to Millennials, moved through the housing market over time.

The results reveal significant variations between races and birth cohorts in housing outcomes. But there is nothing that smacks of white supremacy. Rather, several non-white racial groups are shown to be the most successful at reaching the pinnacle of home ownership. “South Asian and Chinese people had the highest rates [of home ownership] from early adulthood to middle age,” the report finds. The outcome for some white cohorts is as much as 24 percentage points below that of South Asians and Chinese. Blacks and Latin Americans, on the other hand, were the least likely to own a home by middle-age, with ownership rates 3 to 19 percentage points below that for whites and far, far below South Asian and Chinese. What might explain these results?

“The large homeownership disparities observed among different population groups in their 20s were primarily attributed to differences in their tendency to live in the parental home,” the report observes. Chinese-Canadians were more likely to live at home with their parents as young adults. This meant they spent less on rent during those years and had more resources to buy a home later in life when they finally moved out. On the other hand, blacks and Latin Americans were more likely to leave the parental home early, more likely to jump into the rental market sooner and thus more likely to spend a greater share of their income on rent as young adults. This meant they had less money to put down for a home as they reached middle age.

“The findings of this study are indicative of an overall trend suggesting disparities among different racialized groups in terms of family housing resources during young adulthood are likely to persist into later stages of life,” Statcan concludes. Significant variances in culture and parental behaviour regarding housing across races, as well as the urge (or need) to leave home as a young adult appear to explain most of the differences in rental and home ownership trends across generations and races.

This observation is validated by other research on housing from Statcan showing Chinese-Canadians are far more likely to own their home, regardless of age, than any other racial group. At 84.5 percent, their homeownership rate is far above the Canadian average of 71.9 percent and nearly double the rate for some other groups, including blacks at 45.2 percent and Latin Americans at 48 percent. (White Canadians are not included in this analysis.) It appears Chinese parents place a high value on owning a home, and presumably pass this cultural feature down to their children.

Outcomes vary: Statcan’s examination of “core housing need” by racial background again shows substantial variation. Filipino, South Asian and Japanese-Canadians were most likely to be able to afford suitable rental housing, while blacks and West Asians (from Turkey, Iran, etc.) were least likely.

The same study also looked at the other end of the housing spectrum, examining households in “core housing need”, defined as families with inadequate or poorly-maintained accommodations who spend more than 30 percent of their household income on housing; most people in core housing need are renters. Filipinos recorded the lowest core housing need at 5.4 percent, followed by South Asian (9.1 percent) and Japanese (9.4 percent). Black and West Asian (from Turkey, Iran etc.) populations had the highest levels of core housing need at 13.0 percent and 18.2 percent respectively. This result is suggestive of the observation from the Federal Housing Advocate’s report that blacks tend to live in lower-income areas with higher rates of evictions. But that doesn’t necessarily mean racism is to blame.

Income, Poverty and the Rest of Life

Dramatic variations in outcome by race of this sort are not confined to Canada’s housing market. In 2022 Statcan’s racial inequity taskforce examined incomes by race in the report The weekly earnings of Canadian-born individuals in designated minority and White categories in the mid-2010s. This study uncovered a similar racial hierarchy of earnings. Focusing again on Canadian-born individuals to avoid the complications of immigrant status, it found Japanese, Korean, South Asian and Chinese men all earned substantially more than white men. Japanese males earned an average $1,750 per week compared to $1,530 for white men. Among women, whites were outearned by a majority of racial groups, including Chinese, Korean, Japanese, Filipino, South Asia and Arab. The only groups that consistently earned less than white women and men were Southeast Asian, black and Latin American-Canadians.

The phenomenon of Asian-heritage Canadians appearing at the top of a racially-constructed leaderboard is also apparent when the subject is poverty rather than income or housing. The 2023 Statcan study Poverty among racialized groups across generations examines Canadian poverty rates for 11 racial groupings. After a standard adjustment for sociodemographic factors, the long-term results show that Chinese and Japanese-Canadians have the lowest poverty rate, at 5.1 percent and 5.2 percent respectively. This is substantially below the white poverty rate of 6.0 percent. In fact, Filipino, South Asian and a catch-all category of “Other racialized groups” also show lower poverty rates than whites. Blacks, Arabs and Latin Americans experience the highest poverty rates. (See nearby chart.)

Educational outcomes in Canada also vary widely by race – as yet another Statcan race study shows. And once again the same rankings reveal themselves: Asian Canadians on top, whites in the middle and blacks, Arabs and Latin Americans on the bottom. “Many Asian populations had levels of educational attainment well above the national average,” the report finds. As a result, these groups are also over-represented in many high-income occupations such as engineering, medicine and computing. Black children of Canadian-born parents, on the other hand, demonstrated the lowest rate of university education at 15.8 percent, less than half the national average of 32.9 percent. Lower levels of education lead to reduced employment opportunities, lower income and – to come back to our housing example – a greater tendency to live as tenants in poorer neighbourhoods with higher eviction rates.

A cultural advantage? Chinese-Canadians typically appear at or near the top of Statcan’s racial leaderboards. Not only are they more likely to own a house, they also earn more, are better educated and are less likely to be in poverty than most other Canadians, including whites. (Source of photo: Shutterstock)

Again and again, Statcan’s parsing of national data on socio-economic outcomes reveals a distinctly uneven racial landscape with certain groups outperforming others, with whites typically in the middle. It is admittedly impossible to completely discount the presence of racism, as Statcan’s econometric analyses tend to contain a significant “unexplained” component that could potentially point to deliberate race-based discrimination. But that seems unlikely given the context. If Canada truly is a country riven by racial hatred, then white supremacists are doing a rather poor job of it; in most categories they land far from the top of the heap. Based on the results as presented, the chief culprits of any racist takeover of Canada must instead be Asian. Or is there a less sinister explanation lurking within the data?

The Parent Trap

Recall how parental housing choices appeared to be a major factor in Statcan’s observations on housing trajectory by race. Statcan’s poverty study takes this perspective one step further, and finds additional and compelling evidence for the role of parental choices and behaviours in their children’s outcomes.

In seeking to explain why blacks consistently display one of the highest poverty rates across time – substantially higher than for whites and Asians – Statcan looked at the marriage habits of all groups involved. Strikingly, it found that “almost 21% of the Black group consisted of one-parent families, compared with 9% among the White group.” The lowest rates of single-parent families (South Asian at 4.5 percent, Filipino at 5.4 percent) were associated with very low rates for poverty. Other Statcan research has shown that black Canadian families have a lone-parenthood rate nearly three-times greater than for the rest of the population. The scope of lone-parenthood is significant to social outcomes in two ways. Two-parent households tend to offer greater security and stability for the children involved; they also tend to generate higher household incomes. “Having more earners in the family was strongly associated with lower poverty rates,” the report observes. An unstable home life might also explain the tendency of young black adults to leave the parental home earlier than other racial groups, as previously discussed.

The profound influence parents have over their children’s educational success is another well-established fact apparent across numerous academic fields. “Many studies have observed robust associations between parent educational attainment and children’s academic development,” summarizes a recent journal article in psychological science that calls parental resources, occupations and attitudes a “powerful predictor of children’s developmental outcomes.”  The same conclusion can be found in a 2022 article in the European Journal of Public Health, which states “Parental education is one of the best predictors of child school achievement. Higher parental education is not only associated with higher child intelligence, but children from highly educated parents also perform better in school due to other family related factors.” Parents who graduate from college tend to have more successful children. Full stop.

Across a wide variety of indicators – housing, poverty, education and income – what is often decried as evidence of systemic discrimination or racism in Canada can be more convincingly linked to other socio-economic factors within the individual or family unit’s own control. Chief among these factors are a university education and a two-parent household. The prevailing political narrative in Canada that racism is to blame for all racially-differentiated outcomes, on the other hand, lacks convincing evidence. Such a conclusion is further bolstered by recent academic work from south of the border.

Sowell Searching

Renowned black American economist Thomas Sowell, now 93, has spent his entire academic career studying the impact of race on American life, a subject fraught with even more political tension than here in Canada. In his latest of 58 books, Social Justice Fallacies, Sowell considers a litany of observed racial inequities in America in terms of poverty and employment. Wielding a wealth of statistical data and insightful logic, he demolishes both the current claim that all variations in outcome are the result of racism, as well as the early-20th century belief that racial rankings of this sort indicate the genetic superiority of certain races over others. Instead – in line with the Canadian evidence – he points directly at the role of parents.

Sowell admits that black American families as a whole have long experienced poverty rates far above that for white families. Yet this fact can be largely explained by the very high prevalence of lone-mother families within the black community. In fact, the poverty rate of black married-couple families is consistently below the national poverty rate by a substantial margin. Black married-couple families also substantially outperform white single-mother families. “If black family poverty is caused by ‘systemic racism’ do racists make an exception for blacks who are married?” Sowell asks pointedly. “Statistical differences between races are not automatically due to race – either in the sense of being caused by genetics or being the result of racial discrimination. Differences in the proportion of single-parent families among various racial groups…affect differences in income. So [do] differences in median age, and in education – among other factors.”

That marriage patterns drive divergent outcomes for children is also the thesis of another new book, The Two-Parent Privilege: How Americans Stopped Getting Married and Started Falling Behind by Melissa S. Kearney. Like Sowell, Kearney is an economist who takes a numbers-focused approach to the inequality debate in the U.S. Using her own and others’ academic work, she reveals that having two parents in the home is overwhelmingly beneficial to the performance of children across numerous categories. “As a social scientist,” she writes, “I am convinced that the two-parent family structure is, in general, advantageous for children and we cannot ignore what the growing prevalence of one-parent households means for children and inequality.”

Two economists for the two-parent family: Recent books by American economists Thomas Sowell (left) and Melissa S. Kearney (right) muster ample economic data and other evidence demonstrating the benefits to children of having married parents.

Turning her attention to the role of race, Kearney divides the U.S. into four easy-to-understand racial categories of white, black, Asian and Hispanic and finds clear distinctions between these groupings with respect to familial patterns as well as outcomes. “White and Asian children are significantly more likely to live with married parents, as compared to Hispanic and Black children,” she writes, with all the advantages in later life this entails.

Kearney places special importance on the connection between a college education and two-parent families, with college graduates much more likely to get and stay married. This makes a university degree an important marker of success on multiple fronts. However, Asian families are an exception in this regard. As Kearney writes, they display “uniformly high rates of two-parent families across all education groups.” If having two parents is truly the secret to success for children, then Asian families are pre-wired for maximum achievement because of an apparently inherited preference for getting and staying married regardless of educational characteristics. This, says Kearney, “raises the possibility of a strong cultural-norm explanation for why the share of one-parent families is so low for ethnically Asian children in the United States.” It seems a convincing explanation for why Asian Canadians consistently outperform all other racial groups in Canadian data as well.

Choose Wisely

The work of Sowell and Kearney in the U.S. and Statcan in Canada together demolish claims that a divergence in outcomes across racial groups is prima facia proof of pervasive racism. Parental behaviour, rather than white supremacy, appears to be the real driver behind racial inequalities in many critical categories for success.

Let’s make the housing crisis worse: In line with the Federal Housing Advocate’s policy demands to address alleged racism in the housing market, the Supply and Confidence Agreement between the Liberal government and the federal NDP includes a commitment to “tackle the financialization of the housing market.” (Source of photo: The Canadian Press/Sean Kilpatrick)

Nonetheless, countless voices – the FHA among them – continue to insist that any and all observed racial differences must necessarily point to systemic discrimination. And further, that any such differences can be eliminated through dramatic government action. The risk of following this flawed reasoning is enormous. Consider, for example, what it would mean for Canada’s housing market if chartered banks and pension funds were banned from lending to “financialized landlords”, as the FHA demands. Beyond the damage done to conventional mortgage markets, such a policy would bring to a halt the short-term and bridge financing arrangements that facilitate almost all large-scale housing construction in this country. New and ongoing building projects would cease immediately. A similar result would arise from any government mandate to acquire rental housing from landlords “whose business model threatens housing security.” Who would invest in new apartment buildings once a government declares its intention to seize them?

Adopting any of the FHA’s policy prescriptions regarding the private supply of housing would have a catastrophic impact on Canada’s housing market. It would also do nothing to alter the observed reality of racial variation across owners and renters, since racism has nothing to do with these gaps in the first place. Nonetheless, the FHA continues to promote the fiction that “racial discrimination in housing is widespread in Canada,” as another more recent report alleges. This report calls for even more corrective measures, including “reparations” for past housing injustices. The threat seems particularly dire given that the Supply and Confidence Agreement between the Trudeau minority government and the federal NDP includes a now-overdue commitment to “tackle the financialization of the housing market” in line with Houle’s complaints. With the Liberals already having delivered on the agreement’s national pharmacare, dental care and anti-scab requirements, will housing be next? And how much damage will that cause?

If only: British philosopher Bertrand Russell’s wry recommendation for a long and successful life is to “Choose your parents wisely.”

While governments can always make things worse, there is very little any politician can do to lessen the observed gaps between racial groups described above. This is because these gaps are mainly the result of individual, freely-made choices in youth and adulthood. Many of the differences, covering such things as going to school, leaving home and finding a partner, have deep cultural roots that are resistant to easy policy adjustments. There may be some salutary benefit to reminding all young adults about the myriad benefits of getting and staying married, as Kearney’s book recommends. (Although a federal program extolling two-parent households seems highly unlikely under the current Liberal administration.) But any broader solutions necessarily lie in the evolution of what Kearney calls “cultural-norms”, far beyond government control. What is considered racism today is primarily a problem at the family level. And that requires a family-based solution. As British philosopher Bertrand Russell once wryly noted, the secret to a long and happy life is to “choose your parents wisely.”

Peter Shawn Taylor is senior features editor at C2C Journal. He lives in Waterloo, Ontario.

Source of main image: Paramount Pictures.

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