In 2006, almost 1.5 million households in Canada spent nearly half of their before-tax income on shelter and were deemed by CMHC to be in core housing need.
Rather than spending $75 billion to bailout Canada's chartered banks, the government could have used the money to completely eliminate the shortage of affordable housing in Canada. Not only would the investment in housing create new tangible assets actually worth $75 billion (rather than the worthless toxic debt that the government purchased from the banks), but it would stimulate the productive economy and create thousands of badly needed higher-paying jobs.
Consider the math.
The government puts out an initial tender to build 5,000 apartment buildings, each containing 100 apartments (that's 500,000 units in total). If each building costs $15 million to build, the total cost would equal $75 billion and the cost per unit would be $150,000.
Now here's the interesting part. The government finances the project interest-free using it's own central bank, the Bank of Canada. The rental cost to tenants is equal to the financing cost per unit ($150,000) divided by the expected depreciation period of the building (in months). If the buildings are designed to last for 50 years, then tenants would pay only $3,000 per year, or $250 per month. According to the CMHC figures, this amount of rent would be inline with what they could comfortably afford.
Since the tenants would pay back the full amount of the financing themselves, the cost of this solution to Canadian taxpayers would be zero. If the project was repeated 3 times, and staggered over perhaps 10 years, the entire 1.5 million shortage of affordable housing could be eliminated and the overall economy would prosper from the increase in real productivity.
I can't see any downside, can you?
(sorry about the double post, I don't know how to delete the first one)