Housing supply crisis in Canada issue needs to be address immediately

Wednesday, July 21st, 2021

Darlene Hyde and Dan Morrison: Governments in Canada need to work together to solve current housing crisis

Darlene Hyde
The Vancouver Sun

Opinion: The federal government needs to prioritize this issue and plan for a rapidly growing Canada. A hindrance is the tendency of all three levels of government to act independently. These divided perspectives must be resolved.

Housing prices in B.C. have skyrocketed over the past year, as demand surged into undersupplied markets — a pattern observed across Canada. Photo by Mark Blinch /REUTERS

The COVID-19 pandemic has made it clear that access to housing in this province and country is not where it needs to be. While solutions to our current housing supply crisis will undoubtedly come from widespread collaboration, the fix needs to start with government. A key question British Columbians as well as many others across the country are asking is if our three levels of government are doing enough when it comes to stabilizing the national housing market.

Story continues below

The simple answer is no.

COVID-19 vaccine deployment across the country is a recent example of how governmental collaboration can effectively and powerfully respond to a crisis. We need that same type of collaborative approach to a strategy on housing supply that will make a true impact in municipalities across the nation.

Following months of a largely closed off Canada due to COVID-19, immigration to B.C. fell to its lowest point since 1989 and foreign investment into B.C. residential real estate declined to below one per cent of market volume. Yet, home prices continue to spike upwards, and demand remains high — especially here in B.C.

A major reason for the surge in demand is historically low interest rates. Adding to this, the COVID-19 remote-work structure has turned homes into a catch-all of offices, schools, gyms and living spaces; the desire and ability to move from the city to the suburbs has increased; and what better time to expand living space than when you’re at home 95 per cent of the time? Paired with this increased demand, housing inventory has been historically low, with many British Columbians hesitant to list their homes due in part to pandemic-related concerns. For example, the number of listings in the interior and on Vancouver Island are 50 to 60 per cent lower than needed for a balanced market in the long-term.

Story continues below

As a result, housing prices in B.C. have skyrocketed over the past year, as demand surged into undersupplied markets; a pattern observed across Canada. While the most recent provincial sales statistics show market conditions are beginning to cool in many regions across B.C., this will not address the underlying cause of high prices, nor is it reason enough for governments to delay significant meaningful action on supply. If action isn’t taken, the next time the stars align for a hot market, we will find ourselves in a similar situation unless we act now.

In these market conditions, there is a tendency for action to take the shape of quick fixes. But simple solutions for complex problems don’t work. Adding more and varied housing options to meet the demand will make a major difference, and it will require significant long-term collaboration between all levels of government and the private sector.

Story continues below

The B.C. government has allocated $2 billion in development financing through their HousingHub program to finance the construction of thousands of new homes for middle-income families. And to its credit, the federal government budgeted $2.5 billion, and reallocated an additional $1.3 billion to speed up the construction, repair, or support of 35,000 affordable housing units across the country. This will benefit young people and low-income Canadians, but it’s not nearly aggressive enough to address the overall shortage in housing supply.

There simply are not enough housing options available. We need a significant and sustained boost in housing stock to accommodate current and future demand. This has become a very visible crisis in B.C. Unless effective mechanisms are put in place to create the needed supply, affordability will continue to deteriorate.

Story continues below

The federal government needs to prioritize this issue and provide a renewed national vision and housing strategy to adequately plan for a rapidly growing Canada. A hindrance to this ambition is the tendency of all three levels of government to act independently. Each has its own priorities and political agenda. These divided perspectives must be resolved, with collective recognition of the severity of the housing supply issue and joint action to rectify it.

Moving forward, the federal government needs to work closely with its provincial counterparts on national housing goals that break down to precise provincial goals and housing targets. The provinces in turn need to provide better resources, training, and guidance to municipalities around the development of their community plans. If all levels of government work with the same goal in mind and develop common best practices, major delays in the development approval process at the municipal level — which are currently a significant contributor to the current supply crisis — can be avoided.

Story continues below

Strategically developed community plans that adapt national housing targets and plan out a realistic future to accommodate population growth and demographic changes are a needed standard across the province. With a concise strategy and clear outcomes that benefits their constituents, it should be easy for municipalities to get on board. But this relies on governments working together. Otherwise, we have a federal government dreaming big, without the message being accepted at the community-planning level.

An additional step to achieving a cohesive national housing strategy is to tie federal infrastructure investments to housing targets. This would help incentivize increased housing supply at the municipal level.

Story continues below

High demand for housing isn’t likely to go away any time soon, with the Canadian government continuing to set ambitious yearly immigration targets for future years. This requires a parallel national housing supply strategy.

This is the time for the federal government to lead and better align all three levels of government into a coordinated housing approach that significantly expands housing supply targets of all types, where and when it’s needed. The final report by the Canada-British Columbia Expert Panel on the Future of Housing Supply and Affordability has just been released. In it, one of the five key calls to action is “Improving coordination among and within all orders of government.” Clearly this is a key aspect to tackling this complex national policy issue. Canada is a unique landscape. Across the country each province and municipality feels distinct. Yet in the end, we’re all Canadian. It’s time for our political leaders to work together to increase housing supply. And if they do, we will all benefit.

Darlene Hyde is CEO and Dan Morrison is chair of the B.C. Real Estate Association.


Letters to the editor should be sent to [email protected] The editorial pages editor is Hardip Johal, who can be reached at [email protected]

CLICK HERE to report a typo.

Is there more to this story? We’d like to hear from you about this or any other stories you think we should know about. Email [email protected]

© 2021 Vancouver Sun

Comments are closed.