housing test

Too many Canadians are struggling to find a home they can afford—making housing the defining issue of this country’s politics and economics.

The crisis now affects middle-income Canadians and extends beyond major cities. It strikes at the core of the Canadian dream of owning a home and is creating intense inter-generational tensions.

Younger people’s path to secure housing and accumulating wealth is diverging from that of their parents and grandparents. The lack of housing ordinary people can afford has become a tremendous source of stress. This predicament will reach even more alarming levels if not enough is done now.

More than half—one million—of 1.9 million new households by 2030 will not be able to buy a home, according to our estimates. That’s almost all the households in Atlantic Canada right now.

Soaring housing costs have also compounded the pressure that many feel from sharp increases in other living expenses such as food— resulting in an increased reliance on food banks and more homelessness.

The issue is cutting through to government policies on immigration and education, dividing generations, and impacting Canada’s reputation and ability to attract talent and investment.

The Federal government’s caps on international students and temporary foreign workers are just some of the recent policy measures announced to address the crisis but it will not shrink housing demand. It’s also been the focus of many provincial budgets in the past couple of months and is a key theme of the upcoming federal budget.

Yet signs that the housing market is heating up again in anticipation of interest rate cuts by the Bank of Canada only highlight the scale and complexity of the issue. How can housing become more affordable if prices keep rising?
It’s not an easy fix. At its core, the housing crisis arose from an imbalance between supply and demand.

Canada’s housing stock hasn’t responded quickly and forcefully enough to soaring demand. Many other factors that contributed to this imbalance are complex ranging from the structural to cyclical, regulations to preferences, and policy to emotions.
The solutions will be many and complex as well. Ultimately, they will need to close the supply-demand gap and tilt the market equation toward an abundance of supply—to bring meaningful home price and rent relief.

However, a main challenge for all stakeholders is how to considerably boost supply at a time when construction capacity is limited and building costs are high. It’s also imperative to think about the type of housing that is needed.
This report will look at the five phases that led to Canada’s housing crisis, how the challenges are being addressed, and what are the best solutions going forward.

Seven actions to take on the supply and affordability challenge:

• 1
  Aggressively expand the construction sector’s labour pool by prioritizing immigrant skills, recognizing credentials from other jurisdictions and setting ambitious targets for trade enrollments.
• 2
  Develop and adopt innovative designs, building techniques and technology to boost productivity through prefabricated housing and pre-approved building designs.
• 3
  Speed up housing project approvals by reducing regulatory requirements, harmonizing building codes and prioritizing projects with faster turnaround times.
• 4
  Ease zoning restrictions to allow more density in cities and diversify the types of houses built to make more productive use of land.
• 5
  Lower the cost of building new housing by using more cost-efficient materials and modulating government charges.
• 6
  Change the housing supply mix with incentives to build purpose-built apartments by waiving development charges and using publicly owned land.
• 7
  Expand the housing stock from within by reclaiming units from short-term rental businesses, making it easier to build secondary suites and convert non-residential buildings.

Shiplu Talukder is a Digital Publishing Specialist at RBC Thought Leadership and Economics teams where he is responsible for web publishing, site improvement, and accessibility. With prior experience at Bell Canada as a Web Integrator, Shiplu has contributed to various projects aimed at enhancing the user experience of the Bell Canada website. Shiplu is a graduate of George Brown College, where he earned a diploma in Graphic Design, and Humber College, where he completed a diploma in Web Design, Development, and Maintenance. Before joining RBC, Shiplu has worked for various government organizations, where he held roles such as Creative Services Coordinator, Web Coordinator, and Video Editor.

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