Hammering Away at Housing Affordability: Recommendations from the Senate

Senator Loffreda writes about Canada’s housing affordability crisis and shares some of the recommendations from a report that the Senate Committee on Banking, Commerce and the Economy recently published on the matter. 

“People who live without a house are not homeless because of their ancestry or because of mental health or addictions or because they live in poverty.  They are homeless because there is not enough affordable housing in their community.” 

This is what the Minister of Housing told our Committee on Banking, Commerce and the Economy when he appeared before us as part of our study on affordable housing.  As he said, “people do not choose homelessness.”

Indeed, there are numerous factors – some economic, others societal – that explain why individuals find themselves without a home.  Chief among them may be the fact that there is a serious housing shortage in Canada.  Recognizing the urgency of this crisis, our Committee undertook a study on housing affordability, heard from various experts, and published interim findings earlier this month.

If there’s one number that should worry us the most, it is: 3,500,000.

That’s the number of additional homes, according to the Canada Mortgage and Housing Corporation (CMHC), that must be built by 2030 to reach its affordability target.  We are already on pace to build 1.7 million new homes from now until then, so in total, we actually need to increase the stock of houses by 5.2 million in the next seven years.  This is nearly impossible in the current environment with high interest rates, long approval delays, zoning issues, cost of material and inflation, and skilled labour shortages.

Of course, there is no panacea, but there are remedies that could be implemented to address some of these challenges.

Based on the testimony we gathered, our Committee put forward ten recommendations that we hope the federal government will consider as it prepares its 2024 Budget.  Our report is structured around four themes: alignment, innovation, people, and capital.

Our Committee’s very first recommendation is to encourage the Federal Government to consider attaching conditions to municipal funding for public transit that would require housing densification in urban centres near those projects.

One interesting takeaway from our meetings was the suggestion that a shift in perspectives in terms of what constitutes a home is needed among Canadians.  Bob Dugan, Chief Economist at the Canada Mortgage and Housing Corporation, explained how there is nothing wrong with renting.  Society has, in some ways, labelled home ownership as an important goal to aspire to in life, but as he said, “we have to also stop treating rental as a second-best option… it’s a perfectly legitimate way to house yourself.”  This is particularly the case in major urban centres which further supports the idea of densification. 

Randall Bartlett, from the Desjardins Group, explained that in some of our larger cities we seem to penalize density and promoted the notion of converting existing office spaces into congregate living spaces with centralized resources that could be shared among several individuals like student accommodations or seniors’ homes.  This approach may not always be the most cost-effective, but it is one of many solutions.

Likewise, the federal government should continue to streamline the application process for CMHC’s housing programs and support the construction of more social housing.  By way of comparison, social housing in Canada represents only 3.5% of total stock, which is among the lowest in the Organisation for Economic Cooperation and Development.

Finally, there is a severe shortage of skilled workers in the construction sector.  As we suggested, the Federal Government must attract immigrants that are trained in the skilled trades and should consider housing supply when developing immigration policies.  Notwithstanding my strong personal support for ambitious immigration targets, I do recognize, as did some of our witnesses, that Canada’s immigration levels may be negatively impacting housing affordability.  The Government must manage population growth so that it advances at a pace which is sustainable and does not further erode housing affordability.

Despite the Government’s housing strategy and the billions of dollars it has already invested to address affordability, we need to do more and, hopefully, the Government will review our findings as it considers next steps.

As the Holiday Season fast approaches, I can’t help but think of all those Christmas mornings at my childhood home and current residence with my parents, children, and family.  Looking back, I realize how lucky we were to have a place to call home.  As Perry Como reminds us in his 1954 holiday classic:

“There’s no place like home for the Holidays, ‘cause no matter how far away you roam, if you want to be happy in a million ways, for the Holidays, you can’t beat home sweet home.”

Not everyone will have that luxury this Holiday Season.  For those of us who will gather with friends and families in our homes, I hope we will all have a special thought for those who may not be as fortunate.

The Honourable Tony Loffreda Independent Canadian Senator (Québec)