No quick fix to a broken housing system
The recent controversy about the federal and British Columbian governments offering to buy unsold condominiums sheds light on two seemingly conflicting perspectives on the affordable housing crisis:
- Affordable housing as a critical need and right for those who are most marginalized; and
- Housing as a struggling economic engine generating 13 per cent of GDP, 1.5 million jobs, and 25 per cent of wealth.
Both those perspectives are legitimate, but conflicts about “the problem”’ will doom any attempt to solve the housing crisis unless a clear direction is set by the federal government in its fall 2026 budget.
Two laws help define the housing problem. The National Housing Act says federal financing for housing must “protect the availability of adequate funding for housing at low cost and generally contribute to the well-being of the housing sector in the national economy.”
The National Housing Strategy Act adds that a responsible minister must “develop and maintain a national housing strategy … taking into account key principles of a human rights-based approach to housing.” This strategy must “set out a long-term vision for housing in Canada” that “establish[es] national goals relating to housing and homelessness and identify related priorities, initiatives, timelines, and desired outcomes” and “focus[es] on improving housing outcomes for persons in greatest need.”
To develop this strategy, the minister must “provide for participatory processes to ensure the ongoing engagement and inclusion of civil society, stakeholders, vulnerable groups and persons with lived experience of housing need, as well as those with lived experience of homelessness.”
“Outcomes for persons in greatest need” can also be easily identified:
- No one without a home. The federal government needs to provide a long-term capital plan to end homelessness through financing low-cost housing with supports if needed. As every market developer says, there is absolutely no way this can be a profitable enterprise. Public and non-profit housing that works towards social good must be scaled. Ongoing rent supplements or adequate income must help pay the ongoing costs of homes for low-income households. The federal government must ensure that provinces and territories increase social assistance and provide long-term health support to low-income people with disabilities and seniors.
- No one pays so much for their home that they can’t afford other basics like food or transportation. This requires federally guaranteed financial support to build and retain homes affordable to most Canadians.
Rents across Canada are at least twice as expensive as what a household reliant on minimum wage or starting salary can afford, and ownership housing is at least twice as expensive as what a middle-income household can afford. It is three times as expensive in southern Ontario’s Golden Horseshoe, and four times as expensive in British Columbia’s Lower Mainland.
This brings us to a dilemma, which cannot be addressed through a short-term “fix.” If housing is at least twice as expensive as it should be, there are only two short-term solutions. Low incomes need to double—or triple or quadruple—in a short period of time (say, a decade) while home costs remain constant, which has never occurred but might happen with a huge wealth tax transfer. Or home costs need to be cut in half—or a third or a quarter—of their present value over a decade while incomes remain constant, which has again never occurred and might leave most Canadian households who are homeowners very unhappy.
And that is where the aggregate supply solution—market developers building at more than twice their rate to bring costs down—falls apart. If condominium construction has collapsed after a 13 per cent downturn over three years in Toronto, what happens as prices continue to decline?
The federal government must create a long-term plan to address this basic problem: costs of homes must decline gradually (over, say, three decades) while household incomes, especially low incomes, increase. There is no quick fix to a broken system, but there are solutions that can begin now. Rent supplements, especially those attached to non-market homes, must increase immediately. Low-cost supply, especially the proportion of non-market homes, must also increase over time.
A crane in the sky represents collective wealth, whether it is building an affordable non-market family home or unaffordable—and now unsellable—tiny market condo. A home retained or made energy efficient or accessible creates jobs. Both the social crisis and economic threat can be fixed, but we need to begin with an honest assessment of the problem.
Carolyn Whitzman is a senior housing researcher and adjunct professor at University of Toronto’s School of Cities. She is the author of Home Truths: Fixing Canada’s Housing Crisis, and two new reports for the Office of the Federal Housing Advocate on improving the next National Housing Strategy.
The Hill Times