According to Canada’s Federal Housing Big Brother — the Canada Mortgage and Housing Corporation (CMHC) — the country needs millions more new homes1.
Think Canada is in serious housing trouble? With 10 times the population, think how many new homes this might require to house our vastly more populous neighbour to the south!
Keeping our eye on the Canadian issue, however, who will put the shovels in the ground, assemble the needed materials and build the homes?
The private construction industry, of course! It will seize the initiative, happily engaging in a mammoth program that will deliver ultimately affordable. . . wait a second! what is that blimp in the shape of a red herring that has drifted into view overhead?
Seems it is owned by the housing development industry, and elevated entirely with hot air. This persistent distraction manifests itself as a promise that the private construction industry can and will solve ALL the nation’s housing problems. There is, however, a large ‘but’ attached.
Restrictive government red tape, as well as zoning regulations, throttle the development industry from getting on with things. These impediments must be removed. (This is a convenient world-wide free-market industry complaint, not just a Canadian one.)
Only then can the patriotic development industry step up to the plate and engineer a torrent of housing to lift Canada out of its ever-worsening housing affordability crisis.
Alas, this red herring is truly a balloon of hot air.
Consider the following words: “Government programs trying to increase the production of housing units by fast-tracking approvals and ignoring municipal planning processes aren’t likely to make a huge difference. The main limits on the production side are development companies that have little incentive to release units at a pace that would reduce their returns on their investment.”
Why would the development industry build like crazy in order to flood the market, reducing housing prices and at the same time their per-unit profits?
The words expressed above are from someone prepared to tell it like it is: Jill Grant, a professor emeritus in Dalhousie University’s School of Planning. Her thoughts are unlikely to ever to be echoed by either the eager-to-appear-helpful development industry, nor their frequent bed-partner, the CMHC.
For an analysis on the growing housing affordability crisis, as well as the necessity of more social housing, read more from Jill Grant. Her focus is the Canadian maritimes, but much of her analysis can be applied to other regions of Canada, the country itself, and indeed well beyond its borders. Read more at Dal News: Ask an expert: What’s next for Canada’s housing market as frenzy gives way to rapid cooling?
