Expert blames mismatch between supply and demand for soaring housing costs
Canada’s housing affordability crisis requires immediate action to address the mismatch between housing supply and demand, a housing expert said.
Cherise Burda, former executive director of the City Building Institute at Toronto Metropolitan University, outlined several key issues and potential solutions to tackle the problem.
One key issue, according to Burda, is the focus on investor-driven development, which has led to a proliferation of small, high-rise condo units. These units often cater to investors rather than end-users, who are typically families needing larger, more affordable homes.
“Our reliance on an investor-driven housing market has pushed up prices and limited the types of housing available,” Burda noted in an article.
The problem of unsold condos
While rental vacancy rates have hit a record low since 1988, there’s an oversupply of unsold condo units in major urban areas like the Greater Toronto Area (GTA).
Urbanation data showed that since 2022, around 21,500 units in 60 projects have failed to launch, even as the rental vacancy rate has hit a historic low. Meanwhile, sales of new single-family homes have slowed dramatically, with a 62% drop in May compared to the previous year.
At the same time, rents have soared across the country. The average asking rent is now over $2,200 per month, far above what many households can afford.
Read more: Toronto condo market enters recessionary territory
A study from the University of British Columbia found that 20% of households cannot pay more than $1,050 a month, while another 20% are capped at $1,600. This disparity highlights the critical lack of affordable rental options.
Potential solutions
Burda argued that preserving existing affordable housing is essential. Research by Steve Pomeroy indicates that Canada has been losing affordable units faster than it can build new ones. To counter this trend, there’s a call to protect current affordable housing from financialization and demolition.
Additionally, shifting focus to not-for-profit developers and community housing organizations could be crucial. These groups can build more affordable housing without the profit margins that drive up costs in the private sector. The government could support these efforts with incentives such as federal financing and access to public land.
Burda also highlighted the potential of the “missing middle” housing—types like duplexes, townhomes, and small apartment buildings—that are currently underrepresented in many urban areas. Expanding these options can provide more affordable, family-friendly housing without sprawling into rural areas. This approach also involves removing barriers like zoning restrictions and providing municipal support.
Another solution involves making it easier for older Canadians to downsize.
Many seniors live in large single-family homes that could be better used by younger families. Developing attractive housing options for seniors, such as co-living arrangements or smaller, accessible units, could free up these homes and address the housing shortage.
“Housing is more than a unit count. What, where, and for whom we build is as important as how much. We need to target the right housing supply while creating liveable communities. We have this moment to get started,” Burda said.
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