Tracking Evolutions in CMHC Policy (1965-2006) Using Bob Jessop's
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Tracking Evolutions in CMHC Policy (1965-2006) Using Bob Jessop’s Strategic Relational State Theory by Jon Careless A thesis submitted to the Faculty of Graduate and Postdoctoral Affairs in partial fulfillment of the requirements for the degree of Master of Arts in Political Economy Carleton University Ottawa, Ontario © 2015, Jon Careless ABSTRACT Sociologist Bob Jessop theorizes that the actions of the capitalist state involve it weighting competing class interests, some of which are invariably afforded greater relevance depending on given political economic circumstances. The favorable selection of certain class interests at the expense of others is a process, moreover, that is subject to influence by changing historical blocs. This thesis examines how the state, using the CMHC as its conduit, has over time managed the often conflicting class interests associated with affordable housing policies. My central argument is that Canada’s shift between the golden and globalization historical blocs saw housing policy shift away from Keynesian principles towards globalization, neoliberalism, and financialization. Whereas the golden era saw the state institute numerous publicly funded measures in an effort to solve housing issues, the globalization era compelled the state to withdraw its presence in housing, and more explicitly favor investors and the private sector generally. ii ACKNOWLEDGEMENTS I would like to first give a sincere thanks to my supervisor Dr. Pablo Mendez and second reader Dr. Jill Wigle for their terrific support and guidance. I would also like to express my gratitude to my friends and colleagues in the Political Economy program, especially those whom I grew close with over the course of these last two years. I want to thank all my family and friends in Nova Scotia, along with my partner and best friend Joelle. I would also like to offer a very warm thanks to my father whose support was instrumental in helping me complete this project. All of your support was valued and very much appreciated. Lastly, I want to thank the faculty in the Political Economy Department, including Donna Coghill and Laura MacDonald for their excellent service and support. iii TABLE OF CONTENTS ABSTRACT .................................................................................................................................... ii ACKNOWLEDGEMENTS ........................................................................................................... iii TABLE OF CONTENTS ............................................................................................................... iv LIST OF TABLES ........................................................................................................................ vii LIST OF ILLUSTRATIONS ........................................................................................................ vii CHAPTER 1: INTRODUCTION ................................................................................................... 1 1.1 Explaining the Research Process .......................................................................................... 6 1.2 Limitations of the Research .................................................................................................. 9 CHAPTER 2: Theories of the Capitalist State .............................................................................. 14 2.1 Ralph Miliband’s Instrumentalist Theory ...................................................................... 14 2.2 Nicos Poulantzas and Strategic-Relational State Theory ............................................... 17 2.3 Bob Jessop’s Theory of the State as Social Relation ..................................................... 23 2.4 Jessop, Gramsci, and Historical Blocs ........................................................................... 28 2.5 Jessop’s Strategic Relational Theory and the Strategic Selectivities Bias ..................... 31 CHAPTER 3: Analyzing Structural Change within Canada ........................................................ 44 3.1 How Do Historical Blocs Emerge? What is meant by Globalization, Neoliberalism, and Financialization? ....................................................................................................................... 44 3.2 Contextualizing Structural Change in Canada ............................................................... 50 3.3 Defining the Canada Mortgage and Housing Corporation (CMHC) ............................. 54 iv CHAPTER 4: The CMHC's affordable housing policy (AHP), 1965-1970 ................................. 60 4.1 Defining the State’s Role in Housing Policy ................................................................. 66 4.2 The Housing Slowdown of 1967 .................................................................................... 71 4.3 Discontinuing Public Housing, Bringing the Private Market Back In ........................... 78 CHAPTER 5: The CMHC's affordable housing policy (AHP), 1971-1980 ................................. 84 5.1 The Hierarchical Distribution of AHP Benefits for Varying Classes ............................ 85 5.2 The Inefficiency of Pro-Market AHPs ........................................................................... 91 5.3 The Dissolving of the Golden Era and the Privatization of AHP .................................. 95 CHAPTER 6: The CMHC's affordable housing policy (AHP), 1981-1990 ............................... 100 6.1 Housing Slowdown in the Early 1980s ........................................................................ 104 6.2 Privatization of the Housing Market ............................................................................ 106 6.3 Withdrawal of the State from Affordable Housing Provision...................................... 111 6.4 Discrimination against Renters .................................................................................... 114 6.5 How Aggregate Structural Changes Influenced AHPs ................................................ 116 6.6 Financialization and Initiation of the NHA-MBS Program ......................................... 119 CHAPTER 7: The CMHC's affordable housing policy (AHP), 1991-2000 ............................... 124 7.1 The Changing Structure of Social Housing.................................................................. 125 7.2 The State’s Neoliberal Approach to Deficit Management ........................................... 126 7.3 The Circumspection of AHP Policy by the State ......................................................... 130 7.4 Extending Access to Mortgage Financing for Moderate Income Canadians ............... 133 v 7.5 The Financialization of the Housing Market................................................................ 136 CHAPTER 8: The CMHC's affordable housing policy (AHP), 2001-2006 ............................... 140 8.1 Housing Growth in the Globalization Era .................................................................... 141 8.2 Analyzing the Efficiency (or lack thereof) of AHPA .................................................. 142 8.3 Financialization and Accelerating Usage of NHA-MBS ............................................. 145 Figure 8.1: Financial Flows, Issuers of Asset-Backed Securities in Canada ...................... 147 8.4 The ‘Boxing-In’ and Financialization of the Working Class ....................................... 150 8.5 NHA-MBS Activity and its Connection to the Housing Surge ................................... 151 Figure 8.2: Net Transactions in Financial Assets, Canadian Chartered Banks .................. 155 Figure 8.3: National Housing Starts and NHA MBS Activity ............................................ 156 CHAPTER 9: Conclusion ........................................................................................................... 161 9.1 Summary of Findings in Regards to Tracking the SSB of AHP .................................. 161 9.2 How Changing Historical Blocs Influenced the SSB of AHP ..................................... 169 9.3 Interrogating the Mutability of the SSB of AHP in Canada ........................................ 171 Table 9.1: Summary of Policy Changes Examined in this Thesis .......................................... 174 9.4 Possible Avenues for Future Research ......................................................................... 184 REFERENCES ........................................................................................................................... 188 vi LIST OF TABLES Table 9.1: Summary of Policy Changes Examined in this Thesis .............................................. 174 LIST OF ILLUSTRATIONS Figure 8.1: Financial Flows, Issuers of Asset-Backed Securities in Canada .............................. 147 Figure 8.2: Net Transactions in Financial Assets, Canadian Chartered Banks .......................... 155 Figure 8.3: National Housing Starts and NHA MBS Activity .................................................... 156 vii CHAPTER 1: INTRODUCTION "…it is not that the solution of the housing question simultaneously solves the social question, but that only by the solution of the social question, that is, by the abolition of the capitalist mode of production, is the solution of the housing question made possible." - Frederich Engels, “The Housing Question,” 1872. The above passage succinctly encapsulates Frederich Engels’ position regarding how best to approach what he terms ‘the housing question.’ The question being posed concerned how society should solve