Canada Stumbles Towards Housing Affordability Targets
Table of Contents
- 1. Canada Stumbles Towards Housing Affordability Targets
- 2. Condominium Slump a Key Factor
- 3. Ontario and British Columbia Bear the Brunt
- 4. Price Growth Slows in Pricier Provinces
- 5. Industry Concerns and Government Stance
- 6. Municipal Fees a Roadblock to construction
- 7. Looking Ahead
- 8. Do you think the government is doing enough to address the housing affordability crisis?
- 9. Canada Stumbles Towards Housing Affordability Targets
- 10. An Interview with Richard Lyall, President of the Residential Construction council of Ontario
- 11. Falling Short: A Cause for Concern?
- 12. A Shift in Demand: Constructions Catalysts
- 13. The Ontario and British Columbia Dilemma: Affordability Challenges Persist
- 14. Beyond Construction: is the Solution Systemic?
- 15. A Call to Action: Looking Towards a more affordable Future
New data from teh Canada Mortgage and Housing Corporation (CMHC) paints a stark picture: Canada is falling significantly short of its ambitious housing affordability goals. While the government aims to construct 650,000 new housing units annually to keep pace with demand, urban housing starts fell to 227,697 last year.
Condominium Slump a Key Factor
A major contributing factor to this shortfall is a decline in condominium construction. “With low investor interest and more young families looking for family-friendly homes, developers will find it harder to sell enough units to fund new projects,” CMHC stated in its 2025 housing Market Outlook. “The increase in unsold units will likely reduce new project launches.”
Ontario and British Columbia Bear the Brunt
The affordability crisis continues to grip Ontario and British Columbia, where housing markets remain especially unaffordable. According to the CMHC report, “Sales in thes markets are expected to remain below their 10-year averages due to ongoing affordability challenges and the more notable impact of new immigration targets.”
Price Growth Slows in Pricier Provinces
CMHC anticipates slower price growth in these provinces, especially in the near term. Meanwhile, more affordable markets in Alberta and Quebec are experiencing a rebound. “Sales in these provinces are expected to reach historically high levels with prices growing faster than national averages,” CMHC wrote.
Industry Concerns and Government Stance
The construction industry has long expressed concerns about the government’s housing targets, calling them unrealistic. “What we are saying is that when cranes are coming down they are not going back up,” Richard Lyall,president of the Residential Construction Council of Ontario,warned at a parliamentary committee hearing last May. When questioned about the government’s pledge to build 3.87 million homes by 2031, Lyall was blunt, stating, “Not a chance.”
Municipal Fees a Roadblock to construction
Lyall pointed to municipal development charges as a significant obstacle to new housing construction. “How much are the taxes, fees and levies on new housing now?” he questioned. ”It varies across Canada of course but in the Greater Toronto Area it is 31% of the cost of new housing. In British Columbia they did their own study, it was 30%. That is by far the highest in North America and it’s not sustainable. It particularly hits the first-time buyer the most. We effectively tax housing like alcohol and tobacco. It’s like a sin tax. It doesn’t make sense.”
Looking Ahead
Despite calls for policy adjustments and a growing urgency to address the housing crisis, Canada faces a significant challenge in bridging the gap between its ambitious housing goals and the realities of current market conditions. Swift and decisive action is needed to ensure that Canadians have access to affordable and sustainable housing.
Do you think the government is doing enough to address the housing affordability crisis?
Canada Stumbles Towards Housing Affordability Targets
An Interview with Richard Lyall, President of the Residential Construction council of Ontario
Canada’s aspiring housing affordability goals seem increasingly out of reach, according to new data from the Canada Mortgage and Housing corporation (CMHC). Archyde caught up with Richard Lyall, president of the Residential Construction Council of ontario, to discuss the challenges facing the industry and potential solutions to this growing crisis.
Falling Short: A Cause for Concern?
Archyde: Richard, CMHC’s latest report highlights a notable shortfall in housing starts, notably in condo construction. What are your thoughts on these findings?
lyall: It’s disheartening, to be honest. Our industry has been sounding the alarm for some time now, warning that the government’s targets were simply unrealistic.While we understand the need for more housing, building 650,000 units annually requires a significant shift in policy and market conditions.We’re simply not seeing the necessary investment or construction activity to meet these aggressive goals.
A Shift in Demand: Constructions Catalysts
Archyde: The report attributes the decline in condo construction partly to a shift in demand from investors and young families. How does this evolving market dynamic impact developers and overall housing supply?
Lyall: This change in demand is creating a real dilemma for developers. Condos have traditionally been attractive to investors, driving construction. However, with investor interest waning and families prioritizing larger homes, building profitable condo projects is becoming increasingly difficult. this can led to delays in new projects and, ultimately, less housing overall.
The Ontario and British Columbia Dilemma: Affordability Challenges Persist
Archyde: Ontario and British Columbia continue to grapple with housing affordability challenges. How can policymakers address this issue in these key provinces?
Lyall: It’s a complex issue with no easy solutions. Policymakers need to consider a multifaceted approach, addressing factors such as excessive advancement charges, zoning restrictions, and the need for more diverse housing options. Simply relying on market forces to address affordability is unlikely to be effective without proactive intervention.
Beyond Construction: is the Solution Systemic?
Archyde: You’ve highlighted the impact of municipal fees on new housing construction. How significant is this factor in hindering affordability?
Lyall: It’s a major roadblock. Development charges and other levies can add 30% or more to the cost of a new home, pushing it further out of reach for first-time buyers. We need a system that encourages, rather than discourages, building new homes. Treating housing like a sin tax is simply unsustainable.
A Call to Action: Looking Towards a more affordable Future
Archyde: What actions do you believe are most crucial to bridge the gap between Canada’s ambitious housing goals and current realities?
Lyall: We need a fundamental shift in thinking.Policymakers, developers, and communities must work together to find innovative solutions to this pressing issue. That means simplifying the approval process, reducing development charges, exploring alternatives to single-family zoning, and investing in infrastructure to support housing growth.The time for action is now;
Do you think the government is doing enough to address the housing affordability crisis?
