This is probably the most pressing topic in Canadian politics at the moment. Cost of housing, both to buy and to rent, has scaled greatly out of pace with Canadian salaries. Our PM and his cabinet recently went on a retreat with the intention of creating an action plan on how to get us pointed in the right direction. They came back empty handed. [1]
Truthfully I don't think this is an issue the federal government is in a position to solve any time soon. The long and short is that our population has grown faster than our supply of housing, COVID being an unfortunately timed disruption which further strained that supply. Nothing was built for almost a year, but the population continued to grow.
If I had a singular policy suggestion, after having talked to some friends in the industry, it would be to pump federal money into expediting site plan approvals and environmental assessments done at a county or municipal level. Some of these offices have tiny rosters who end up being the bottlenecks for enormous projects which otherwise would be breaking ground. Environmental assessments are notoriously time-consuming and particular in Canada, something we're largely very proud of. That said, I believe if there were ever a time for Canadians to be okay with cutting corners if it meant getting more of us into homes, I think it would be now. From my understanding, there are many housing projects in Ontario for which construction could begin next week, if not for the Sisyphean approval processes.
Here's an example of a site plan approval process for a town in Ontario[2] - just imagine all the points in which that chain of communication can get gummed up and projects can sit idle. We're used to steps like this taking a couple weeks in tech, but in the land development industry things move s l o w.
Canadians often take pride in our ability to do things the way they're meant to be done and to follow the rules as presented, even when they might not make sense in the moment. I think occasionally our love of process can be our downfall.
At many levels Canada seems to be choking on it's own bureaucracy. We have a complete lack of intra provincial trade, including many intra provincial barriers for experts. Does Saskatchewan with a population of 1 million need its own licensing board for Psychologists? Why Can't I buy an Ontario wine in Alberta?
Quebec was controlled politically and economically by english speakers when Canada was formed. The decentralized political nature was more practical due to Canada's sparse population at the time. It's a blessing and a curse.
You meant not leave the country, Québec, Ontario, Nova Scotia, and New Brunswick are the founding provinces and Québec had almost no leverage at the time.
I really don't think it's that hard to work it at the federal level.
The issue is at the municipal level (mainly), and the provincial level (less so).
Look at what California has been doing in the last 2 years. You force constraints on zoning regulations down on the lower level entities. You force permitting time limits and acceptance rates. You force a minimum level of multifamily lots per population.
It's really really really not as hard as it's presented. It's just in political gridlock.
>The issue is at the municipal level (mainly), and the provincial level (less so).
The municipalities are creations of the province so personally I would assign them just as much blame. The provinces have the most power to address the issue but seem to be happy to hide behind the Feds and Cities.
British Columbia realised just how serious of a problem housing is, going so far as to implement an updated provincial housing policy aimed squarely at densifying Vancouver[1], even though technically it applies to the entire province.
>>The long and short is that our population has grown faster than our supply of housing, COVID being an unfortunately timed disruption which further strained that supply. Nothing was built for almost a year, but the population continued to grow.
It was completely asinine for Trudeau to refer to potentially restricting the number of foreign students[1] because, while this is a contributing factor, he sidestepped the primary driver which is that the largest reason for Canada's population growth[2] is our (permanent) immigration targets, where said policy is set primarily by the federal government (although some provinces have overlapping programs for immigrants such as Quebec).
> Truthfully I don't think this is an issue the federal government is in a position to solve any time soon. The long and short is that our population has grown faster than our supply of housing,
Federally they can do an immigration moratorium. Immigration-driven population increase is clearly making quality of life worse for Canadians.
Since demand won’t be going down the only solution is expedited development as you suggest. We’ve seen government pump record money into businesses so it’s frustrating that in both the US and Canada more isn’t being done to solve the problem of housing affordability by pursuing the only real solution.
Federal government can easily solve immigration if they wanted to though. Does it make sense to bring in a million people each year? It's not gonna change though because people are profiting from it.
The fertility rate in Canada is far below the reproduction level. Any Canadian government has no choice but to double down on immigration. The alternative is financial collapse due to the lack of workforce and diminishing internal consumer demand that would span everything, not just real estate.
Does this mean that most young Canadians can certainly financially afford to have kids without going into debt, but for some reason (worried about the future? Lazy? Other priorities?) just aren't interested anymore?
So in other words, them not making babies has nothing to do with economics?
That's a good question. I don't think anyone has a good understanding of the causes of low fertility rates in Canada and in other developed countries. I personally think economics certainly play a role here, especially in high COL cities. However, there are undoubtedly other factors that affect fertility (e.g. health issues, family getting out of fashion in general) and it's hard to say if any of the factors defines the trend alone, or it's a combination of them that pushed the fertility rate down.
> Our PM and his cabinet recently went on a retreat with the intention of creating an action plan on how to get us pointed in the right direction. They came back empty handed. [1]
It's too bad that's such important discussions happen in private. Between this and the shenanigans with the Ontario Premier and developers, I think it is obvious that most politicians don't actually want to solve the problem.
I'm hoping we get something like a single issue party with a mandate to implement a land value tax.
> Truthfully I don't think this is an issue the federal government is in a position to solve any time soon.
I agree in general. There is some stuff the federal government can do, which is to return to funding social housing. The Federal government for a long time provided subsidized housing in the post war period up to the 1970s-80s.
> If I had a singular policy suggestion, after having talked to some friends in the industry, it would be to pump federal money into expediting site plan approvals and environmental assessments done at a county or municipal level.
I've seen similar. One of the biggest issues that is almost never talked about is development (land improvement?) taxes occur late in the process. So when it comes to multi-dwelling development, there is substantial risk the developers have to take on and manage, because they could get slapped with losing all their profits in surprise taxes near the end of the project (besides all the risks for building costs in general). I think the stats is in the ballpark of 2/10 building are successes, 6/10 are break even, and 2/10 are are losses. At $100-$400 million a piece for a medium sized tower, imagine taking on that risk profile... I can't. So cities need to understand the risks they're transferring to development, and fund their infrastructure upgrades through good and solid planning upfront.
Another related idea I saw from a youtube video on Vancouver I think it was, was the return to the Vancouver standard house plan. It was one of the post war house plans, and while there were a couple variations and you could make superficial changes, it was extremely cheap to get approvals for because the city was basically approving the same structure every time, and were so used to it the reviews were cheap and easy.
So you're right, just finding the opportunities to optimize that process for both the City and Developer is essential. And also allowing basement apartments and other medium density development. The giant towers are hella expensive if that's the only density getting built.
Canada does not have a housing supply problem. That is the big lie told by governments to make themselves look good. It's mostly a cost of money problem. When the cost of money was near zero for so long, especially during the pandemic, people loaded up on debt, increasing the demand for houses, driving prices to insane levels. Now that the cost of money has increased to the (historically low) level of 5%, the demand for housing has decreased, listings are flooding the market, and prices are falling.
You can completely expedite the site plan approval and environmental assessments to take place in one day, and still not get anywhere. The problem is not the amount of bureaucracy, it's that you've made it illegal to build anything but single family homes on >80% of your urban land.
I don't think it's unreasonable that the government was "empty handed" after the retreat.
Given the amount of time and prep that is put into government communications and policy, if they actually had some concrete policy to announce after the retreat it would have meant that the whole retreat was actually a sham and they had something planned all along.
The government has switched out the housing minister from a dud to a rising star, and had a retreat where they listened to a bunch of experts. These are promising things to notice, but if they are only now changing tack on this issue, it will likely take months from now until we see a coherent policy response.
I believe that the current housing bubble began to really go off the rails during the 2008 financial crisis due to decisions made by the Conservative Party of Canada at that time. Instead of addressing the issue directly, the government chose to stimulate the housing market through incentives and policies, effectively artificially inflating it. Subsequent governments have followed a similar path.
As we've seen, the accumulated potential energy in the housing market has now grown to such an extent that we don't know what to do with it. Eventually, the "sandpile effect" is likely to come into play, since the laws of nature always wins.
The solution (in my opinion) is simple. Increase taxes on unearned income and balance that with decreased taxes on earned income (i.e. productive activity). Unfortunately this looks like political suicide in a climate where a large portion of the population has gone all in on a strategy of investing in unearned income.
We've embraced the exploitative aspects of capitalism at the expense of the creative aspects and it has made our societies sick and fragile.
Truthfully I don't think this is an issue the federal government is in a position to solve any time soon. The long and short is that our population has grown faster than our supply of housing, COVID being an unfortunately timed disruption which further strained that supply. Nothing was built for almost a year, but the population continued to grow.
If I had a singular policy suggestion, after having talked to some friends in the industry, it would be to pump federal money into expediting site plan approvals and environmental assessments done at a county or municipal level. Some of these offices have tiny rosters who end up being the bottlenecks for enormous projects which otherwise would be breaking ground. Environmental assessments are notoriously time-consuming and particular in Canada, something we're largely very proud of. That said, I believe if there were ever a time for Canadians to be okay with cutting corners if it meant getting more of us into homes, I think it would be now. From my understanding, there are many housing projects in Ontario for which construction could begin next week, if not for the Sisyphean approval processes.
Here's an example of a site plan approval process for a town in Ontario[2] - just imagine all the points in which that chain of communication can get gummed up and projects can sit idle. We're used to steps like this taking a couple weeks in tech, but in the land development industry things move s l o w.
Canadians often take pride in our ability to do things the way they're meant to be done and to follow the rules as presented, even when they might not make sense in the moment. I think occasionally our love of process can be our downfall.
[1] https://archive.ph/CZE3y [2] https://www.middlesexcentre.on.ca/sites/default/files/2021-0...