What’s gone wrong with Canada’s housing market happened over decades, at city councils across the country. Some of what’s needed to set it right could come from Parliament Hill.
Over the past 30 years, Metro Vancouver added more than a million people. The Greater Toronto Area added nearly three million. It’s a similar story across Canada. Yet restrictive municipal zoning makes it difficult to build much-needed new housing, especially in established neighbourhoods. City councils, beholden to existing homeowners, block adding density anywhere other than on large plots of empty land. So our cities mostly grow out, not up.
Mix too little supply and a growing population with low interest rates, and housing prices have surged.
Increasing supply is the long-term solution. City councils – stuck in a decades-old mindset that stands against missing-middle housing, such as townhomes and small apartment buildings, in neighbourhoods of single-family houses – have failed to do so. There’s plenty of land but too much of it is occupied by the least amount of density possible.
Housing is a big part of both the Liberal and Conservative platforms in a way it has not been in recent elections. It’s an attempt to respond to younger voters priced out of home ownership. The headline promises are grandiose. The Conservatives say they will get one million homes built in three years. The Liberals pledge to “build, preserve or repair” 1.4 million in four years.
The reality is these lofty-sounding promises aren’t all that much higher than the current rate of housing construction. Still, both leading parties at least recognize that supply is lacking, and more of it is essential.
What’s also new is both leading parties are promising to wield Ottawa’s might to push against local restrictions.
The Conservatives want to tie federal transit spending to the loosening of zoning constraints near funded projects. This is smart but, like all such promises, details matter. What does “near” mean? More density within a block won’t do much; insisting on it for a kilometre in all directions will.
The Liberals promise $4-billion to “help cities accelerate housing construction.” It’s unclear how this would work but, again, the push for change from above could be helpful.
The idea of levering the heft of higher levels of government to make a difference in local housing is percolating. Oregon has instituted statewide zoning changes; California – whose zoning is so restrictive that the state has both a growing economy and a shrinking population – is working toward the same goal. In Canada, a recent provincial-federal report on housing affordability in British Columbia concluded the province must intervene, because change is unlikely if left to city councils.
Ottawa can also make a difference in non-market affordable housing. A half century ago, the federal government provided cash for everything from capital to operating costs. At the peak in the 1970s, 25,000 units of affordable housing were built each year. From 1990 through 2019, the annual tally was 3,000 units. The Liberals’ national housing strategy has in part restored Ottawa’s role, but its aim of 16,000 units of affordable housing a year is unambitious compared with the past.
In this campaign, the Liberals promise more money for affordable housing, the Conservatives suggest a greater use of community land trusts, and the NDP has a target of 50,000 units a year, but don’t really say how that would happen.
Building is one thing; preserving what exists is another. Housing advocates such as Vote Housing and Generation Squeeze point to the need to save affordable homes that stand today. From 2011 to 2016, through demolition or rent hikes, Canada lost more than 300,000 units renting for less than $750 a month.
The parties are also offering an array of measures to put more taxpayer dollars in the hands of home buyers. These won’t get more houses built or corral high prices; they will instead add to the problem of house-price inflation.
The Conservatives and Liberals both want to ban foreign buyers for two years. It’s worth a try, but the impact on prices would likely be minimal.
And the Liberals say they would end blind bidding. That’s a good idea, and one that would be popular – but it’s not clear how Ottawa can make it happen, given that this is an area of provincial jurisdiction.
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