Canada's housing crisis

 

Canada's housing crisis direct result of Trudeau policies

 

At an announcement in Hamilton, Prime Minister Justin Trudeau said housing is not a "primary federal responsibility," but something the federal government must help with.

Yet eight years ago, Trudeau began promising he was going to lower housing costs.  No wonder he wants to wash his hands of the horrendous housing crisis of his own making.

The federal government is responsible for housing policy, such as immigration levels which greatly affect demand, infrastructure such as transportation and tax policies such as the GST, programs from the federal Canada Mortgage and Housing Corporation (CMHC) and the financial stress test related to rising mortgage rates caused by poor government behaviour.

Then along comes a cabinet shuffle and Canada's new housing and infrastructure minister, Sean Fraser, who says closing the door to newcomers is not the solution to the country's housing woes.  However, Fraser was the previous immigration minister, so we see another Trudeau Cabinet problem. Since Trudeau came into office, they have politicized immigration and blown up the orderly point merit system.

Canada’s housing problem is now an immigration problem, which was the Liberal policy choice to maneuver for enduring ethnic newcomer votes.  Immigrant selection needs to be targeted to our internal economic requirements. Apparently, there are thousands of technically skilled people looking to leave Europe and Canada should go get them. We see the imbalance on our streets with the work of social helping agencies, as Canada has many arrivals who require enormous government help. 

The federal Liberals must restore a workable immigration department that doesn’t continue to hurt our housing crisis. They also have to protect foreign students and temporary workers from exploitative housing situations.  They should also prioritize arrivals who have trade skills and lead a national federal-provincial credential agreement deal to ensure newcomers can work in their chosen fields.

Approval delays are directly linked with problem housing affordability.  CMHC and Statistics Canada’s Municipal Land Use and Regulation Survey reveals that approval delays and land use regulations make housing unnecessarily more expensive. CMHC research says that an additional 3.5 million new units are needed by 2030 for affordability to be restored.  Canada needs to close the gap in housing supply to tackle the problem of housing affordability.  While restrictive regulation may have socio-economic goals, they limit in a hurtful way what developers can do.

CMHC and Statistics Canada worked together to develop the 2022 Municipal Land Use and Regulation Survey which looked at land use rules in diverse cities across Canada. They confirmed the housing supply is choked by restrictive zoning, fees, approval times, community consultations, density limits and environmental assessments.  Excessive residential land use regulation causes hurtful housing affordability.  The speed and complexity of approving new development is a crucial factor in understanding affordability.

While the affordability crisis began in our large cities, it has now spread to smaller towns and rural communities. Efforts to cool the housing market by financially disqualifying more buyers through mortgage lenders do not affect the community's needs and basic demand, as families are still there.  The rules must quickly change by allowing more housing density across the nation in every community.

We must end exclusionary municipal rules that block or delay new housing. The approval process must be depoliticized and also prevent abuse of the housing appeals system. Government spending announcements must be actually delivered for the huge investments needed to create thousands of fully serviced building lots.

Parents and grandparents are stressed their children will not be able to afford even a basic home when they start working or decide to start a family. Too many Canadians are unable to live in their preferred city or town because they cannot afford to buy or rent.

The balance has swung too far in favour of lengthy consultations, bureaucratic red tape and costly appeals. It is too easy for a few locals to oppose new housing. Canada is in a housing crisis and the urgent problem demands immediate and sweeping reform.

Canada has the lowest amount of housing per population of any G7 country given the recent immigration explosion. Immigration is driving up demand with no foreseeable supply relief in sight.  We have been repeatedly told the severe shortage of housing stems from a combination of a lack of available serviced land, opposition to redeveloping established neighbourhoods, slow municipal approvals, high development fees, and foreign buyers.

The simple issue is people are arriving faster than the housing industry can accommodate under the old developmental rules.  A recent Scotiabank economic report said Ontario needs an additional 650,000 dwelling units to bring the province up to the national average.  Similarly across Canada, the chronic housing shortage has built up over the years because population growth has exceeded home building capacity.

The gap started expanding in 2015 when Trudeau began a rapid increase in immigration numbers. Canada’s new immigration minister said he is open to “having a conversation” on concerns over rising immigration targets amid a housing shortage, but said he still has no plans to lower them.

The Liberals aim to invite 465,000 permanent residents in 2023, 485,000 in 2024, and 500,000 in 2025.  What are their motives for such an unwise policy at this time?

The Liberals are off the rails.  Canada had record population growth in 2022 with more than a million permanent and temporary residents. However, Canada’s current immigration rate will worsen the housing crisis and put excessive pressure on social services.

Ottawa’s decision to bring so many during a time when the Bank of Canada was imposing an aggressive monetary tightening cycle has created a record imbalance between housing supply and demand. The imbalance is hurting housing affordability in every province.

Canada has a housing gap that cannot be solved with current laws and traditional methods.  Recent efforts are a tiny drop in the bucket of the 3.5 million homes the CMHC says we need to achieve affordability by 2030. The corporation's latest monthly housing stats show much of the country falling behind on housing promises.

Bringing demand and supply back into balance requires both a great increase in housing sector construction capacity along with slowing of immigration, despite what Minister Sean Fraser says. 

The skilled labour shortage will limit the effectiveness of any rule change.  Provinces can try to expand worker supply by boosting trades training, but it would require a 50% increase in industry capacity to reach the CMHC targets.  Immigration-driven housing demand is completely within the control of the federal government. Under the Trudeau administration, immigration has increased significantly and provinces just can’t handle the demand.

NIMBYism (not in my backyard) is a major obstacle to building housing.  It drags out the approval process, pushes up costs, and keeps out new residents.  Similarly, municipalities that resist new housing and succumb to NIMBY pressure and close off their neighbourhoods, should see funding reductions.  Fixing the housing crisis is a societal responsibility, and our limited tax dollars should be directed to those municipalities making the necessary choices to grow the housing supply.

In frustration, many have called for limits on public consultations and more “as of right” zoning.  They cite the BANANAs – Build Absolutely Nothing Anywhere Near Anything, causing people to say NIMBYism has gone BANANAs. In a growing society, that attitude is not just bad policy, it is exclusionary and discriminatory.

Canada must create a more permissive land use, planning and approval system.  We could repeal or override municipal policies, zoning or plans that prioritize the preservation of the physical character of neighbourhoods.  Municipalities could exempt from site plan approval and public consultation all projects of 10 units or less that already conform to an official community plan and require only minor variances.

We need to establish province-wide zoning standards, or prohibitions for minimum lot sizes, maximum building setbacks, minimum heights, angular planes, shadow rules, front doors, building depth, landscaping, floor space index, heritage limits and moderate parking requirements.  Remove any floorplate restrictions to allow larger, more efficient high-density towers, and limit municipalities from requesting or hosting additional public meetings beyond those that are legally required.

There is now much political talk about needed change to address the grave housing shortage that our nation created.  Builders, housing advocates, elected officials, planners, and average Canadians understand the need to act.  Such unity of purpose can be powerful.  To leverage the commitment to change, some solutions are bold but workable, backed by evidence.  We must focus on ramping up the supply of housing.  Higher mortgage rates will temporarily cool demand, but that will not respond to the community need of the existing population.

Significant more supply is key.  Rapidly building more homes will reduce the competition for our scarce supply and will give families more housing choices.  It will improve housing affordability across the board. 

Everyone wants Canadians to have adequate housing and there is lots that can be done.  There is more than enough room for social housing alongside affordable market housing. There is a national coming together, as real change begins with the recognition that a problem exists.

We can change the federal government.