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Fix Housing 1: Come Up With a Plan to Build an Additional 3.5 Million Homes
Will the upcoming federal housing announcement deliver?
This is the first of ten common sense solutions that we see for achieving affordable and attainable housing for all.
Housing as a System
When we talk about the housing crisis in Canada, we are often talking about the difficulties in buying a home. But we need to increasingly look at housing as a system.
The housing system runs from ownership to rentals to community housing. When this system fails, individuals and families are left with no choice other than homeless shelters or the growing number of encampments. Changes in one area affect the entire system, through their impact on supply and demand:
Unaffordable home ownership pushes more people into the rental market, driving up rents.
Higher rents cause more people to fall into core housing need (i.e., spending more than 30% of their income for housing that is adequate and suitable for their situation), driving up the demand for community housing.
More demand for community housing causes shortages, keeping more people in emergency shelters and homelessness.
And this works in the opposite direction too:
Increased homelessness puts a greater demand on available community housing.
The greater demand for community housing keeps more low-income families and individuals in unaffordable market rentals, also driving up rents.
Higher rents incentivize more people to buy, which in turn pushes up home ownership prices.
The imbalance between supply and demand for housing flows back and forth between ownership, rentals, community housing and the shelter system. We can’t solve one segment of the housing system without addressing the others.
How to Build An Additional 3.5 Million Homes
Canada needs a plan for tackling, in parallel, all segments of the housing/homelessness system – ownership, rentals, community housing, homelessness.
While jurisdictional responsibility gets messy pretty quickly, we need all levels of government working towards the same goal of ensuring adequate, suitable and affordable housing for all.
Some quick numbers from the Canada Mortgage and Housing Corporation (CHMC) and the Statistics Canada 2021 Census help to understand the scope of what is required. Canada’s 40 million people live in about 16 million homes. Between now and 2030, assuming recent trends continue, we can expect to add another 2.3 million homes. But to restore affordability, we would need to build 5.8 million homes across the country by 2030 – in other words, 3.5 million more than we are on track to do.
Will the Feds Provide a System-Wide Plan?
Good news! The federal government will be announcing a new housing-focused infrastructure plan in the fall of 2023.
However, that plan needs to tell us how we can build an additional 3.5 million homes more than we are currently set to build.
That plan needs to articulate how much would be built by the private sector, and how much as community housing.
That plan needs to articulate how we avoid the further loss of affordable housing and how we end chronic homelessness and reduce core-housing need.
That plan needs to explain how federal dollars can get provincial and municipal governments rowing in the same direction.
Will the feds deliver the system-wide approach we need? Or will their plan be a patchwork of programs with little coherence or ambition?
To help the feds with their thinking, over the course of about ten posts, we will be laying out what we think is required to address affordability throughout the Canadian housing system.
Please forward to anyone looking for common sense solutions for building a better city.