There is no "silver bullet" for Canada's housing woes, according to a new Desjardins analysis
While there is no “silver bullet” that can immediately solve Canada’s housing crisis, strong policies at every level of government will need to operate in concert to ensure a robust pace of home building moving forward, according to a new report from Desjardins.
Federal-level policies that could help with this goal include programs like the Housing Accelerator Fund to incentivize more residential construction.
At the same time, “it’s insufficient to move the needle and has been woefully lacking in its execution,” Desjardins said. “The federal government should listen to other levels of government to improve the targeting of transfers and minimize the frictions that are preventing more homes from being built. It should consider other tax incentives as well, such as foregoing the GST/HST on purpose‑built rental construction.”
The federal government is also ideally placed to ensure that population growth settles at a sustainable place that does not further erode housing affordability.
“Prioritizing immigrants with skilled trades training would help offset the aging workforce in construction,” Desjardins said.
Canadian Home Builders' Association warns of slower home starts due to rising construction costs from recent rate hikes. Chief Executive Kevin Lee calls for government action to offset the impact.https://t.co/UhRksMGfRd#mortgagenews #mortgageindustry #ratehike #interestrates
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 24, 2023
Provincial-level measures could include providing municipalities with greater latitude to implement policies that will support accelerated residential investment in their jurisdictions.
“Reducing development charges on some types of housing may have a positive impact, but municipalities shouldn’t be left holding the bag for lost revenues,” Desjardins said. “The boom in short‑term rentals must also be addressed, with the Government of Quebec’s recent introduction of provincial licensing possibly providing a template for the rest of the country.”
Across the board, reducing existing barriers to home building will be the most impactful policy steps that governments can take.
“Ending exclusionary zoning and moving toward by‑right approvals should be a priority to support increased density,” Desjardins said. “Encouraging retail‑to‑residential redevelopment of existing greyfield sites such as underused shopping malls could add a lot more units in relatively short order.”
