On the July 8 episode of The Final Word, Abby Hughes dives into a new report by the Canadian Mortgage and Housing Corporation that says Canada will need to build an extra 3.5 million homes on top of what we’re on track to build by 2030 in order to make housing affordable. A housing advocate and a senior research fellow at Toronto Met’s Centre for Urban Research and Land Development weigh in on the CMHC’s target, and how to meet the housing demand.
The Canadian Mortgage and Housing Corporation (CMHM) released a staggering report at the end of June, in which it estimates Canada will need to build 3.5 million more homes than planned by 2030 in order to make housing affordable.
The housing affordability problem, according to the report, is most prevalent in British Columbia and Ontario. Two thirds of that 3.5 million will need to be built in those provinces, according to the CMHC. In Ontario alone, that means an extra 1.85 million homes on top of what the province is on track to build.
According to Frank Clayton, a senior research fellow at the Centre for Urban Research and Land Development at Toronto Metropolitan University, the high demand for housing is a result of people moving out of their family homes and people moving to Canada.
Clayton said there are only two ways to bring down the cost of housing.
“One is you just produce a lot more housing, relative to the demand. And if you over supply, the market prices or rents will fall. That’s one way of doing it.”
“Another way is having a big recession, where all kinds of people are unemployed,” said Clayton. “We had a huge recession, and housing got very affordable after that for a while. But we don’t ever want to do that. Really, we have to get the supply up.
In the wake of the report, many housing advocates were shocked. Rocky Petkov wasn’t surprised, but was disappointed. Petkov works with More Neighbors Toronto, a volunteer-only advocacy group that advocates for more housing of all kinds to be built in the city, and hosts CJRU 30 here at CJRU 1280AM.
“It definitely was a wake up call. Because as bad as we conceived the problem to be, it’s actually much worse,” said Petkov.
In large part, the CMHC numbers were so high because of the time period they used in their report. The report referenced a time in the early 2000s as a benchmark for housing affordability—a time when housing units were quite affordable, costing $500 000 on average. This choice has garnered mixed reactions.
Clayton said this ‘golden age’ isn’t a realistic goal to strive for in the next eight years. “It’s unachievable,” he said.
But for Petkov, a loft goal is exactly what is needed.
“What’s wrong with trying to aim for affordability like we had in 2004? What’s wrong with trying to aim for affordability like we had in 1980?” said Petkov. “That was a time when someone who was earning a modest income or working class income could afford to live in our city.”
“Yes, it’s going to be difficult. But that doesn’t mean we shouldn’t try.”
According to Petkov, there are three major barriers preventing substantial housing development in Toronto. The first is a typically adversarial relationship between developers and cities, which prevents them from collaborating to create housing that is affordable.
The second is exclusionary zoning, a widespread practice in Toronto that severely restricts the amount of new housing that gets built by prioritizing single-family homes over homes with multiple residences.
The last large obstacle, according to Petkov, is a “NIMBY” state of mind. The acronym, which stands for “Not In My Backyard”, represents a phenomenon in which long-term residents of certain areas view new, affordable housing in their neighbourhood as undesirable.
While the nuances of this issue are complex, Clayton said that, in the end, the math of supply and demand isn’t.
“The economics is pretty simple. If you want more housing, you build more housing and you reduce the costs that go into building housing. That’s the only way you can get affordable housing, other than subsidizing, and we can’t afford to do that in a huge way.”
Want more? Stream the July 8 2022 episode of The Final Word on SoundCloud, or wherever you find your podcasts.