Canada Reviews Its National Strategy on Housing Affordability

As Canada grapples with a rapidly evolving housing landscape, the recent review of the National Housing Strategy (NHS) comes at a crucial time. Households are feeling the financial crunch, with discussions about rent, mortgage rates, and housing availability becoming daily realities at kitchen tables across the country. In urban centers, a slight increase in mortgage rates can negate annual wage gains. Meanwhile, smaller communities face their unique challenges, such as aging homes and limited construction capacity. This review is emblematic of the intersection of policy, real estate, and market regulation, prompting government action to transition from ambitious promises to tangible results.

Canada Reviews the National Housing Strategy: What Changed and Why It Matters for Affordability

Launched in 2017, the NHS was initially a ten-year plan to rectify longstanding gaps in housing. However, as the housing crisis deepened, the strategy’s focus shifted from mere crisis management in "hot markets" to addressing broader affordability concerns affecting middle-income families, newcomers, and seniors alike.

A significant evolution of the NHS has been the increase in funding. Initially set at around $72 billion, the commitment has now grown to approximately $115 billion, responding to deepening challenges while recognizing that earlier strategies focused on stimulating purchasing power could inadvertently elevate home prices if supply remained stagnant.

Targets that Define the Strategy (and Why the Review Focuses on Delivery)

To ensure accountability, the NHS established concrete targets: building hundreds of thousands of homes, repairing existing units, and cutting chronic homelessness in half by 2028. These targets are instrumental as they translate political goals into measurable objectives.

By mid-2024, the NHS committed just over $54 billion, leading to nearly 149,650 new homes built and the repair of around 288,183 units. Notably, repairs to existing housing have become a bright spot, as renovating current structures is often quicker than new construction, particularly when local zoning and community consultation processes create delays.

A Case-Driven Lens: “Nadia” the Renter and “Raj” the Builder

To illustrate the impact of the review, consider two personas: Nadia, a renter in Vancouver, is faced with a steep rent increase upon lease renewal. Her options vanish as vacancy rates tighten and new rental units fail to meet demand.

Conversely, Raj, a small developer outside Toronto, encounters hurdles of his own. While the funding for his project is secured, he faces significant delays due to lengthy site approvals and utility connections. These personal narratives underscore a key insight: housing affordability represents more than just price points; it is a complex interplay of supply limitations, financing conditions, and varying regional capabilities to deliver homes.

Supply-Side Policy in Focus: How the Housing Accelerator Fund Reshapes Urban Planning and Market Regulation

The urgency of the NHS review reflects a strategic pivot towards tools that transform local governance rather than solely household finances. At the forefront is the Housing Accelerator Fund (HAF), launched in 2023 with about $4.4 billion allocated. This fund incentivizes municipalities to expedite approvals and enable higher density housing, aligning federal investment with local reforms.

By mid-2024, approximately $3.9 billion had been committed through the HAF, facilitating the fast-tracking of over 105,000 housing units. This fund is not merely about constructing homes; it is about reforming urban planning systems that traditionally generate scarcity.

What “Accelerating Housing” Looks Like in Practice

Speedier approval processes and zoning reforms characterize practical applications of HAF. These reforms may include allowing modest density in previously single-unit neighborhoods or digitalizing the permitting process. Larger cities like Toronto can pursue comprehensive zoning reforms, while smaller municipalities might focus on resolving infrastructural bottlenecks.

Why This Is Market Regulation, Not Just Spending

Critically, housing regulation extends beyond traditional finance regulations—such as mortgage rules—encompassing land-use regulations that dictate housing availability and pricing. By promoting a supply-first approach, the NHS is essentially a strategy for economic regulation that targets housing scarcity.

A Practical Checklist Municipalities Are Being Nudged Toward

To streamline housing delivery and address local bureaucratic slowdowns, municipalities are encouraged to adopt several strategies:

• Shorten approval timelines via standardized zoning and service standards.
• Increase density near transit hubs to align housing with infrastructural investments.
• Promote student housing and mid-rise forms to ease family rental pressure.
• Reduce exclusionary zoning laws by legalizing multiplexes.
• Ensure infrastructure readiness to avoid bottlenecks in approvals.

Measuring Progress: Budgets, Units, Repairs, and the Reality Behind the Numbers

A comprehensive review of Canada’s housing strategy necessitates distinguishing among various metrics: how much funding is announced, committed, and ultimately converted into completed housing. While the NHS has outperformed many public programs, the most complex challenge remains ensuring the completion of new builds.

Repair initiatives play a crucial role, having successfully preserved nearly 300,000 units of existing housing. Preventing the loss of affordable, older units stabilizes housing markets, particularly in regions where new construction cannot keep pace.

Why Construction Lags: Approvals, Labour, and Cost Inflation

Repeatedly, the strategy review highlights friction points. Lengthy planning and permitting can render financing precarious, especially in a climate of rising interest rates. Labour shortages can complicate the timeline of construction, while fluctuating material costs make it challenging to convert funding into completed homes.

Federal-Provincial Dynamics: Constitutional Responsibility, Regional Gaps, and Better Coordination

Housing policy in Canada operates within a complex framework of federal and provincial responsibilities. Although the federal government plays a pivotal role in funding and incentivizing housing, the provinces dictate many aspects of housing policy, including building codes and tenant laws.

Through a partnership model of around $15.4 billion in joint funding, the NHS allows provinces to tailor programs to their unique needs while upholding national goals. Nevertheless, geographical disparities result in differing performance across regions, as provinces like Ontario and British Columbia face intense demand and affordability pressures.

Data and Reporting Problems That Affect Planning

Inconsistent reporting frameworks can create discrepancies in counting units against specific initiatives. This lack of clarity hampers local governments’ ability to allocate resources effectively. Thus, improving reporting systems can expedite decision-making and enhance outcomes.

Strengthening Partnerships Without Weakening Social Housing Priorities

Provinces advocate for flexibility in addressing diverse housing needs, such as mixed-income housing and Indigenous priorities. A collaborative task force, comprising federal, provincial, territorial, and municipal representatives, could streamline approvals without sacrificing essential social housing priorities.

Real Estate, Vulnerable Households, and the Next Phase of Policy Tools

Understanding affordability requires a nuanced perspective. For individuals like Nadia, affordability might depend on the percentage of income spent on housing. The national strategy review suggests that housing policy must encompass various financial tools, from rental financing to tenant protections.

Ethics and Professionalism in the Real Estate Ecosystem

Ethical standards within the real estate sector have become integral to the affordability conversation. Transparent practices by builders, property managers, and brokers can either alleviate or exacerbate housing issues. Training and education for real estate professionals can contribute to creating a more equitable housing market.

Examples of Next-Phase Tools Being Debated

Several innovative tools emerge within policy circles that could enhance the NHS, including:

• Streamlined approval processes for mid-rise buildings.
• Enhanced preservation policies for older rental units.
• More integrated supportive housing options.
• Coordinated infrastructure funding with housing projects.
• Clearer regulatory frameworks for speculative property use.

Conclusion

As Canada confronts its persistent housing challenges, the review of the National Housing Strategy signifies a crucial moment in addressing affordability. By focusing not only on funding but also on facilitating effective delivery mechanisms, this review aims to create measurable improvements in housing outcomes across the nation. The journey towards equitable housing is complex, but the path forward is becoming clearer through collaborative efforts and effective policy implementation.