The unspoken election issue: aligning housing policies
As we get ready to head to the polls in the federal election on Monday, Sept. 20, it is gratifying to see that after years of prompting by the building and land development industry, all three federal parties now recognize that housing supply is the key issue impacting housing affordability in Canada.
The housing crisis threatens to undermine our quality of life, and economic competitiveness was recently underscored in a report from a major bank that found that we have the lowest housing supply amongst G7 nations.
The issues affecting Canada’s housing supply are many, with each level of government exerting influence over different levers in the supply/demand equation.
Housing demand in Canada, for example, is driven by immigration and monetary policy, which fall under the purview of the federal government. Meanwhile, factors that impact housing supply — and many aspects that influence
the timing and cost at which that supply comes to market — is driven by provincial policy. Municipal decisions are related to land use, zoning, approval timeframes, development charges, parkland cash in lieu, etc.
While it would seem like common sense that federal and lower level of government policies should align, readers might be surprised that often this is not the case.
What we have had over the last decade or more is a fundamental misalignment of policies. Immigration levels have been steadily rising, which is a good thing for Canada from an
economic, cultural and skilled labour perspective. This in turn drives demand. However, largely due to lags in the planning cycle and policy, lower levels of government have not been working within frameworks that account for this increased demand.
This manifests itself in less housing being available than needed, tight new housing inventory levels, low rental vacancies and price escalation. To put this in perspective, in the GTA between 2016 and 2020, we fell between 35,000 and 40,000 new housing units short of what was needed (13,600 in 2019 alone). Unfortunately,
this shortfall is not new. Since 2006, the market in the GTA has fallen short by nearly 115,000 units.
Against this structural supply issue, elected officials are often tempted to bring forward solutions that address only one aspect of the crisis or one impacted population group. This will only provide temporary band-aid solutions to the symptoms and won’t really address the challenge we face as a society.
It requires us to think bigger as Canadians about the opportunities this great nation has provided all of us and make sure that new Canadians and young people get the same opportunities. It requires all three levels of government working together to fundamentally address housing supply in a concerted manner based on anticipated demand, with the objective of fundamentally growing housing supply which will ultimately bring affordability to all, not just some.
David Wilkes