More than half – one million – of 1.9 million new Canadian households by 2030 will not be able to buy a home if affordability remains close to where it is today, according to research from Royal Bank of Canada. Moreover, over 40% of new households that can’t buy a home will also not earn enough to afford rent at the market price.
In response to the ongoing Canadian housing crisis, RBC Economics and Thought Leadership has released The Great Rebuild: Seven ways to fix Canada’s housing shortage. The report looks at the factors that led to Canada’s housing crisis and advances policy ideas to address it.
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“The current affordability crisis has been driven by a massive undersupply of housing in the face of booming demand,” said Robert Hogue, assistant chief economist, RBC Economics.
“Canada needs to significantly grow its housing stock, especially rental and affordable housing. And it needs to do so quickly. Addressing this challenge will require greater collaboration between governments, industry and other stakeholders.”
Potential solutions to bring meaningful home price and rent relief
Aggressively expand the construction sector’s labour pool. Examples include prioritising immigrant skills, recognising credentials from other jurisdictions and setting ambitious targets for trade enrolments.
Develop and adopt innovative designs, building techniques and technology. This will boost productivity through prefabricated housing and pre-approved building designs.
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By GlobalDataSpeed up housing project approvals. For example, reduce regulatory requirements, harmonise building codes and prioritise projects with faster turnaround times.
Ease zoning restrictions. This would allow more density in cities and diversify the types of houses built to make more productive use of land.
Lower the cost of building new housing by using more cost-efficient materials and modulating government charges.
Change the housing supply mix with incentives to build purpose-built apartments by waiving development charges and using publicly owned land.
And expand the housing stock from within. Reclaiming units from short-term rental businesses would make it easier to build secondary suites and convert non-residential buildings.
“We’re working with Canadians across the country — homeowners, builders, policymakers — to help ensure home ownership remains part of the Canadian dream. Efforts will have to go beyond what’s been done so far. We hope these pragmatic ideas help rebalance supply and demand and do so in ways that continue to drive Canadian prosperity,” said John Stackhouse, SVP, Office of the CEO, RBC.
The full report is available via this link.
