The Dominion Housing Act

Abstract

Since its inception fifty years ago, Canada Mortgage and Housing Corporation has played a dominant role in the development of Canadian housing. Although the policy mechanisms and directions have expanded over the years, the primary role of CMHC has remained consistent since 1946; to promote home ownership by reducing the risk inherent in mortgage loans, to financial institutions. This policy predates CMHQ in 1935 the Dominion Housing Act (DHA) initiated joint lending on mortgages between lenders and the federal government The joint-lending arrangement continued with the National Housing Act in 1938 and responsibility for its administration was inherited by CMHC A basic shift in policy occurred in 1954 when joint lending was replaced with the current programme of mortgage insurance. Although state-assisted mortgage policy is often cited to have been central to the building of the post-war suburb in Canada, empirical analysis is lacking. This paper analyses the socio-spatial impact of the DHA through use of original mortgage files. DHA-sponsored mortgage lending featured pronounced class and geographical biases. Although a suburban orientation was present from the beginning, the middle classes were generally unable to participate.

From ‘black‐balling’ to ‘marking’: the suburban origin of redlining in Canada, 1930s–1950s

“…Federal legislation reinforced the tendency to discriminate. Belec's (1997) study of the Toronto area between 1935 and 1938 showed that DHA loans were highly concentrated in affluent areas, these being located in both the city and the suburbs. Very few were placed in lower-income areas, city or suburban.…”

Housing and Social Policy: An Historical Perspective on Canadian-American Differences—A Comment

“…Even in relative terms, how ever, the im pact of the DHA was more lim ited than that of the FH A. Only a small num ber of hom es were purchased with DHA ® nancing (Belec, 1997). Few lending institutions (mostly insurance com panies) received federal approval to lend under the scheme.…”

Underwriting suburbanization: The National Housing Act and the Canadian city

“…Household mortgage debt, while not a stated policy objective, was nevertheless a key outcome of this approach. Prior to the existence of a housing agency, the federal government worked in close collaboration with institutional lenders to create its initial housing legislation, the 1935 DHA and its successor, the 1938 NHA, and thereby initiated the era of continuous state housing policy in Canada (Dennis and Fish 1972; Hulchanski ; Bélec ; Bacher ). The purpose of the DHA was to promote the production and consumption of new homes by promoting demand through a modernized mortgage instrument—i.e., long‐term amortization.…”

“…The objective was to increase demand by lowering the monthly cost of ownership. A virtually identical approach was followed in the United States and there is evidence that the Canadian legislation was modelled after the American (Bélec ). The supply side of the equation was ability and willingness of financial institutions to lend mortgage capital.…”

“…The Deputy Minister of Finance at the time, W. C. Clark, was a primary architect and champion of the DHA (Bacher ). It soon became apparent to Clark, from numerous complaints received, that mortgage funds were difficult to obtain in certain regions and urban neighbourhoods (Bélec ). Clark spent much time and effort defending the right of institutional lenders to make fiscally sound lending decisions, while at the same time, encouraging them behind the scenes to be freer with their capital (Bélec 1988).…”