Canada’s housing agency chief said Canadians need to stop glamorizing home ownership and urged cities with pricey real estate markets to aggressively build more rental apartments to alleviate soaring housing costs.
“We have to call out the glorification of home ownership,” Evan Siddall, the chief executive of Canada Mortgage and Housing Corp., said at a Globe and Mail event on affordable housing. “Renting is a perfect and valid housing option, and may in fact be the best long-term option for many households.”
Mr. Siddall made his comments as Toronto and Vancouver are trying to address a housing shortage in their respective cities, where real estate prices are well out of reach for many residents and the rental vacancy rate is less than 1 per cent.
The lack of housing in the cities has driven up monthly rents and pushed up real estate prices in the outskirts.
The average monthly rental rate across the Toronto region for newer apartments was $2,515 in the third quarter, according to real estate consultancy Urbanation. That is up 7 per cent over last year.
In the Toronto suburbs, the price of a detached house was $943,494 in November, an increase of 4 per cent over last year, according to the Toronto Real Estate Board.
And with the population growing and more companies choosing to locate in Toronto and Vancouver, there will be more demand for housing. The mayor of Vancouver has already expressed concern over an influx of Amazon.com workers driving up home prices.
Mr. Siddall said the “overpromotion” of homeowners is both economically and socially counterproductive and contributes to the increasing division between rich and poor.
He said the solution was adding many more housing units on a smaller piece of land, also known as adding density or densification.
“Densification is in fact the most necessary, most logical, most effective solution,” he said. “To have a meaningful effect on affordability, we need to build up instead of building out. We need to build vertically. We need to replace 10 single-family homes with 100 or 200 homes in a multi-unit development whether that is purpose built rental or condominiums.”
The national housing chief said the average density in Vancouver is 486 people per square kilometre. In contrast, in New York, the average density is 1,700 people per square kilometre. In London, it is about 1,800 and Tokyo it is 4,200, he said.
Densification is already taking place in Toronto and Vancouver, as well as in nearby cities. In Coquitlam, B.C., 98 per cent of the housing under construction is townhouses, duplexes, apartments or condos.
But Mr. Siddall said aggressive measures are needed. “It seems self-evident to me that we need to close that densification gap,” he said. “I am talking about increasing it on a grand scale.”