Canada is trying to tackle its housing affordability problem. Will it work?

By: Jessica Mach on November 27, 2017

Canada’s governments have unveiled a slew of initiatives this year to address the country’s housing affordability problem, but experts have expressed concerns about whether all the new policies are conflicting with each other.

Last week, the federal government unveiled the details of its anticipated $40 billion National Housing Strategy, which is set to follow a “human rights-based” approach to establishing housing security for the nation’s most vulnerable.

At first glance, the strategy and its goal seem reasonable. After all, we all need somewhere to live, and given where home prices have been heading in the past few years, it’s clear the government needs to step in.

But a report released by the Macdonald-Laurier Institute in November, shortly before the federal government’s National Housing Strategy announcement, cited incompatibilities between past housing policies, such as the OSFI’s introduction of tighter mortgage rules in October, which clash with Ottawa’s recent expansion of incentives for first-time home buyers.

The report also warned against the implementation of new rules without allowing enough time to properly assess the impact of previously-introduced regulations.

That could complicate the success of the federal government’s 10-year plan.

The goals of that plan are already ambitious. They include reducing chronic homelessness and housing need, the creation of accessible, sustainable, mixed-income, and mixed-use units, and repairing existing household units.

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The federal government also aims to work with provinces and territories to identify and respond to local housing needs and priorities by launching the Canada Housing Benefit in 2020, which will provide an estimated average of $2,500 per year to each household recipient for housing costs.

Seniors, indigenous peoples, survivors of family violence, people with disabilities, refugees, veterans, and homeless individuals will be prioritized.

Others expressed concern that the policies were simply not enough.

On Friday, the research arm of RBC released a response to the National Housing Policy, stating that the initiative’s impact on housing affordability for those buying their homes across the country would neither be immediate nor substantial.

The federal plans follow a spate of initiatives that were implemented over the past year to combat house price crises in Vancouver and the Greater Toronto Area, Canada’s most expensive cities. These include crackdowns on short-term rental networks like Airbnb, which have been approved in Vancouver and proposed in Toronto; foreign buyer’s and empty homes taxes in Vancouver; and tougher mortgage rules across the country.

In Vancouver, which has led the way in embracing regulatory solutions to its housing challenges, another policy was announced last Thursday. The Housing Vancouver strategy is set to rezone expensive low-density and single-family neighbourhoods, in order to allow 10,000 ground-level units such as townhouses, rowhouses, and infills (converting empty land like a lot to a building) to be built over the next ten years.

The new policy would open up previously inaccessible parts of the city’s land to housing, says a City of Vancouver statement.

Together, policies across the country suggest a willingness on the part of government officials to take initiative in addressing local housing needs. But skepticism remains given past failures.

A report in the CBC cited the inadequacies of the federal government’s indigenous housing strategy, which was implemented between 2015 and 2016, to question how effective the well-intentioned National Housing Policy (and others like Vancouver’s own) could be.

The report additionally suggested that the policy, which does not explicitly address mental health or addiction, would require a more holistic approach to garner long-term results.

It’s clear that policies from different levels of government need to be in-line with each other to work. We’re all rooting for greater housing affordability for Canadians — but it won’t happen unless all governments at all levels are on the same page.