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 a series of 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.Â
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.Â
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.Â
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.Â
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.Â
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.Â
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.Â
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?Â
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.
I'm very glad to see the dots of how owning a house connects all the way down to the most vulnerable. I'd argue it goes further, affecting those with middle to middle-high incomes. If a late 40-something couple with kids can't afford a bigger house, the starter home they bought 15 years ago remains off the market. Same thing for empty nesters wanting to downsize but to a nicer, and more expensive, neighbourhood.
In Ottawa, the highest earners in the public service are affecting this. If the federal government has roles to play, part of it must be to clear the logjam at the top of the pay scale.
The public service has never had more workers aged 60+ (https://www.canada.ca/en/treasury-board-secretariat/services/innovation/human-resources-statistics/demographic-snapshot-federal-public-service-2021.html#toc03-03) and the age of EXs is going up (https://www.canada.ca/en/treasury-board-secretariat/services/innovation/human-resources-statistics/demographic-snapshot-federal-public-service-2021.html#toc04-02). Retirement rates are at an all time low (https://www.canada.ca/en/treasury-board-secretariat/services/innovation/human-resources-statistics/demographic-snapshot-federal-public-service-2021.html#toc03-05).
Why? When the pandemic hit, many senior executives were able to work from home, sparing them the commute. This made their jobs less objectionable, plus there was demand for their seasoned leadership, so they remained despite being eligible to retire. A few years later, some are now looking at financial goals they hadn't thought possible before the pandemic and intend to remain even longer. For others, they made renovations or purchased a larger home during the pandemic, incurring costs they don't want to pay off with retirement income especially as interest rates keep climbing.
Lack of turnover at the top keeps many in the middle. For younger workers, the inability to advance means financial stagnation. With inevitable cuts coming to the federal public service, rather than target the middle (and less financial established) the government should offer incentives for retirement to its highest earners at the very top, thanking them for their leadership during the pandemic but making room for new leadership, new ideas, and new opportunities.
The sweeping zoning changes being proposed by the City of Ottawa are not going to create more access to 15-minute neighbourhoods. These changes are not going to create more affordable middle class housing for more people in desirable family neighborhoods. It just means more, smaller luxury dwellings. The reason is simple: the high cost of land in Ottawa (the same in Vancouver and Toronto). The only way for a developer to make money is to subdivide very expensive single family lots into smaller luxury dwelling units (towns or triplexes). The alternative is to create "cities of spikes" in which affordable housing is created in the building form of high rise communities (with 3 bedroom family-oriented apartments). Here, the developers build configurations of 20, 35 and 40-storey towers connected to key public transit corridors. These ain't 15-minute neighborhoods but they will certainly 'densify' the inner cities. They will absorb the millions of new immigrants looking for housing. But it's not going to create real communities. Those new arrivals are eventually going to want their own yards with a trees. They are going find them in the exurban and suburban housing developments. That's the future of Canadian cities--spikes of residential skyscrapers. Is this really our collective vision for Ottawa and Canada's other major cities? Evan Potter