Friday, May 04, 2012

A Healthy Society - Chapter 4 Discussion

In my discussion of Chapter 3 of Ryan Meili's A Healthy Society, I mused that social housing might be an area where public-sector purchasing power could be put to its best possible use in securing better value than individuals can afford in a purely market-based system. And in his discussion of housing and environmental factors in Chapter 4, Meili expands on that possibility while explaining why private-sector development doesn't meet some of our most important housing needs:
In Canada, despite reports from all levels of government on the need for comprehensive housing strategies, these same governments have been backing away from meaningful investments in social housing for decades. The most significant such change was the Canadian federal government’s decision in the early 1990s to no longer build new social housing units. The argument is that the private sector will be more efficient and effective at producing housing.

The private sector excels at producing homes for ownership, or for high income rental property. Developers are good at this because it is the most profitable area of the housing market, and because their aim is to make profits for their owners and investors. Handing over housing strategy to the private sector in order to make housing affordable for low-income families is like trying to wash your dishes in the clothes-dryer. It’s a useful appliance, but that’s not what it’s for.
Rather than planning how to get people into stable homes, we are looking at how to get them short-term shelter. Aside from not delivering what people really need, short-term shelter can cost five to ten times as much as long-term housing. This after-the-fact approach is analogous to the spending on health care over disease prevention, where governments find themselves spending far more money to clean up messes rather than a reasonable amount preventing them. It’s like a family that decides they should eat at restaurants because groceries cost too much. Doing the math shows that a lot more is saved by up-front expenditures; a bit of foresight can save a great deal of expense down the line. Our governments are increasingly reacting, not planning, renting, not owning, and, as a result, costing themselves out of all kinds of essential services. The decision of governments to live hand-to-mouth rather than plan ahead results in worse outcomes for more money. If our friends and neighbours acted that way, we’d shake our heads and think their priorities were confused. Why do we insist on this kind of behaviour from those who manage our taxes?
In arguing for more foresight in public policy development, Meili also highlights the most important argument as to how a genuinely progressive government can achieve the best possible return on public investment - emphasizing that good management goes together with a commitment to public services. And I'll build on that theme to distinguish between a couple of concepts that are lumped together by Meili in highlighting the different approaches available.

In my view, there are two fairly distinct means of handling social issues based on what's supposed to be a market-based system. On one hand, there's the no-government model which involves a preference toward doing absolutely nothing about an issue, and an alternative approach of merely offering minor incentives available to private-sector actors who still get full say over what happens. (And on the housing issue, this model sums up the Wall government's approach: after doin nothing for one term in office, its sole idea now is to hand corporate tax breaks to landlords.)

But there's also a model (captured by the "renting, not owning" part of Meili's lament) which is all too often labeled as progressive since it allows a government to claim to be spending on a priority, even though it serves to centralize control and decision-making in the corporate sector. Think about the Ontario Libs' green energy plan, which has the province pouring billions of dollars into a single private-sector company which is still itself focused entirely on a profit motive - with the result that the government swaps money and control for buy-in from a single private actor and a slightly smoother short-term path to implementation.

By way of analogy, imagine the family deciding how to eat in Meili's model deciding to hire a personal shopper on a 20-year contract for an ongoing fixed sum it can't really afford, but hopes to be able to meet down the road. Yes, it's possible the investment will bring in a few ideas that hadn't occurred to the family on its own - but highly unlikely the result will actually be value for money.

Instead, we should be looking not only to invest in areas where relatively small inputs today can produce strong returns in the future, but also to maintain enough public control and flexibility to be able to adapt as needs change. Because while it's essential to select the right tools in building a healthier society, it's equally important to be able to determine how they're used.

No comments:

Post a Comment