On housing, Poilievre is right

It was always about the red tape. Politicians have spent years pointing the finger at foreign speculators or greedy developers to explain away the rapid rise in housing prices, hoping to blame literally anyone but themselves. This charade appears to be dropping, however, as lawmakers at all levels are finally admitting what everybody already knows, that when you artificially limit how much housing can be built, prices are going to go up.

At the forefront of the debate is Conservative leadership candidate Pierre Poilievre, who released a five-minute video on Twitter about his housing policies that has received a whopping 450,000 views in less than two weeks.

It resonated with many Canadians because the reason owning a home is now out of reach for so many is because there are not enough houses to go around. Given that Canada boasts the second-largest land mass in the world, the problem is not a lack of space, but onerous regulations that limit densification in major cities and add to the cost of new developments.

If he becomes prime minister, Poilievre said, he would “require municipalities … to speed up building permits and reduce the governmental cost associated with building things.” This was a sentiment echoed by fellow leadership candidate Scott Aitchison, who promised his government would tie federal infrastructure funding “directly to requirements to build new housing.”

If the discussion about cutting municipal regulations that limit the supply of real estate were limited to a couple Conservatives vying for party leadership, it would represent only limited progress. Yet even the federal Liberals, in their recent budget, announced (somewhat vague) plans to make some infrastructure and transit funding contingent on “actions by provinces, territories and municipalities to increase housing supply where it makes sense to do so.”

In typical Liberal fashion, the party’s 2021 election platform discussed using federal funding to further the government’s social goals, such as encouraging municipalities to “establish inclusionary zoning bylaws,” which require developers to build affordable housing. But at least the government is acknowledging that zoning regulations have become a major impediment to new development.

The unfortunate part of the whole debate is that it looks as though land use will become yet another area of local responsibility that will be directed by the ever-expanding scope of the federal government. Still, there are signs that cities and provinces are also recognizing that supply side challenges need to be addressed.

In 2020, the Ontario government released a plan that aimed to force cities to increase density around transit hubs, though it has been bitterly resisted by some municipal politicians.

In February, the province’s Housing Affordability Task Force released a report urging the government to bypass municipalities to allow for increased densification — including allowing higher buildings, more mixeduse properties, laneway and other secondary suites, along with multi-tenant dwellings — especially around public transit and major highways.

While the Ford government’s actual plan, released March 30, doesn’t go that far, it does pledge to take steps to reduce the red tape and governmental delays that plague many new developments.

Meanwhile, Edmonton city council got a chance to see a draft of the city administration’s proposed new zoning bylaw last week, which, if implemented in something close to its current form, could be a gamechanger. The bylaw, which aims, as one city planner put it, to avoid the “unintended social impacts of regulation” and create a “regulatory environment that minimizes challenges to economic activity,” would reduce the number of zones from 46 to around 20.

This would allow for a broader range of developments, such as row houses and low-rise apartments, in areas currently zoned for single-family dwellings, and mean that homeowners and developers would have to spend less time and money petitioning for variances.

It is attracting the usual opposition from those who acknowledge the housing affordability problem but fight tooth-and-nail to prevent developments in their own backyards, or any policies that might keep their property values from increasing exponentially. They should be ignored, as it is not the government’s job to protect the value of private assets and we cannot continue to allow petty objections to get in the way of ensuring housing isn’t only available for the wealthy or the lucky.

Perhaps the biggest problem, though, is that the bylaw won’t come into effect until at least 2024. And we need to build houses now.

Canada has the lowest houses per capita in the G7, according to a 2021 Scotiabank report, and would need to build 1.8 million new homes just to reach the G7 average. Given that fewer than 200,000 units a year are built in Canada, we will need to quickly increase that number if we hope to provide adequate housing for our current population and have any hope of keeping up with growth.

Meanwhile, data from the Teranet-national Bank House Price Index shows that the resale cost of single-family homes in 11 major Canadian markets increased over 31 per cent between March 2020 and March 2022.

The Liberals’ latest budget largely continues the unimaginative policies of the past that have tried to make it easier for new home buyers to enter the market, thus increasing demand without tackling supply, while adding some window dressing, such as a temporary ban on foreign home buyers, which won’t make much difference. But at least there is now hope that all levels of government are starting to recognize that they are the cause of the housing crisis and that the best solution is for them to simply get out of the way.