National leadership is required to address housing challenges

For generations, Canadians have viewed homeownership as not only a major life milestone, but an investment in their future. Just like older homes need repair and investment, housing affordability (and availability) is in desperate need of attention from all levels of government. In the past, you could work hard, save money and buy a home. Now, a growing number of younger Canadians have been left behind, creating a growing wealth gap between them and those who were able to get a foothold in the housing market before it took off.

The current housing crisis threatens to undermine both our quality of life and economic competitiveness. This was recently underscored in a report from a major bank that found that our country has the lowest number of housing units per 1,000 residents of any G7 country, and it’s not getting better. In fact, that number has been falling since 2016 as our population grows. The issues affecting Canada’s housing supply are many, with each level of government wielding influence over different levers that can push and pull housing supply and demand in different directions.

National consensus

Housing demand in Canada, for example, is primarily driven by immigration and monetary policy, which are responsibilities of the federal government. Good news is, there appears to be a national consensus that housing needs to be a priority. In the recent federal election, all three major federal parties recognized in their platforms that housing supply is the key issue impacting housing affordability in Canada. On the other hand, many of the factors that impact housing supply are driven by provincial policy.

Municipal decisions are also key to unlocking new housing supply, as they make decisions on land use, zoning, approval timeframes, development charges, parkland fees, and more. Governments at all levels need to prioritize increasing housing supply. This will help keep housing prices down and free up rental properties (which we also have a significant shortage of), as people move into their first homes.

Canada needs more market-rate housing of all forms – lowrise, midrise and highrise, both for ownership and rental. Building more affordable housing (social housing) is as important, but building social housing is not the same as building market-rate housing that Canadians can afford to buy or rent without government subsidy. We need both, and we need to ensure politicians are focused on solutions for housing affordability for the average Canadian as well as on supporting social housing for those in housing need. At any rate, we’re not building enough social housing to even move the need for the vast majority of Canadians.

Forecast demand

With the election in the rear-view mirror, we all need to think bigger about the opportunities this great nation has provided all of us and ensure that new Canadians and young people have the same opportunities. This requires all three levels of government working together to address housing supply and choice based on forecast demand, with the objective to fundamentally increase housing supply of all types that will ultimately bring affordability to the majority. Governments truly hold the key to unlocking the door to homeownership again.