I was listening to a Hub.ca podcast on the housing situation in Canada the other day while driving and journalist Amanda Lang informed us that the ‘financialization’ of the housing sector is the problem.
The issue in the Canadian market is that the proportion of community housing within the total housing stock is well below the OECD average. A recent report prepared by Deloitte economists confirms a causal relationship between that increase to average and up to a 9.3% increase in GDP net of inflation and opportunity costs.
There is no point in building new affordable housing if we lose 11 units (on average) from the off-market rate market for every one we build. That’s just feeding the hamster wheel in the same way the emergency housing solutions are performing. Major systems changes ARE needed. Maybe not blow it up, but controlled explosions will only help.
David, I think you are spot on. I've built somewhere north of a thousand homes in my twenty-year construction career, along with installing all the services down to the paving of the streets. Nowhere in the system has there ever been a problem satisfying the market, at least for those who could afford a house. CMHC has been around since the 1970s and has served the market well. They helped the market survive 20% interest rates, and 3% rates...moderating prices that fluctuated wildly with mortgage rates. CMHC smooths out the bumps with changes in policy, and they can do it again if politicians stop interfering with utopian promises. Everyone can't afford a house...some can't afford a tent...that's a fact, and it will always be so. If 'affordable housing' means housing tailored to fit every income, that is a social issue with a public cost and should be treated as such. Don't mess with something that works as well as housing—everywhere outside our large cities. Their housing prices are a symptom of social issues that have little to do with housing and a lot to do with city planning and helping people who can't help themselves.
More needs to be done to encourage competition in the housing sector AND discourage developers from holding back and slow rolling developments. That's ok for De Beers and the diamond market but not shelter.
The issue in the Canadian market is that the proportion of community housing within the total housing stock is well below the OECD average. A recent report prepared by Deloitte economists confirms a causal relationship between that increase to average and up to a 9.3% increase in GDP net of inflation and opportunity costs.
There is no point in building new affordable housing if we lose 11 units (on average) from the off-market rate market for every one we build. That’s just feeding the hamster wheel in the same way the emergency housing solutions are performing. Major systems changes ARE needed. Maybe not blow it up, but controlled explosions will only help.
This makes good sense to me.
It's time for some level of government to rethink the outdated housing tax regime.
Yes, we need more units, and immigration plays a role, but let's not overlook the significant tool in the toolbox—taxation.
It's overdue for this conversation! 🏡💬
David, I think you are spot on. I've built somewhere north of a thousand homes in my twenty-year construction career, along with installing all the services down to the paving of the streets. Nowhere in the system has there ever been a problem satisfying the market, at least for those who could afford a house. CMHC has been around since the 1970s and has served the market well. They helped the market survive 20% interest rates, and 3% rates...moderating prices that fluctuated wildly with mortgage rates. CMHC smooths out the bumps with changes in policy, and they can do it again if politicians stop interfering with utopian promises. Everyone can't afford a house...some can't afford a tent...that's a fact, and it will always be so. If 'affordable housing' means housing tailored to fit every income, that is a social issue with a public cost and should be treated as such. Don't mess with something that works as well as housing—everywhere outside our large cities. Their housing prices are a symptom of social issues that have little to do with housing and a lot to do with city planning and helping people who can't help themselves.
More needs to be done to encourage competition in the housing sector AND discourage developers from holding back and slow rolling developments. That's ok for De Beers and the diamond market but not shelter.