Editorial

Governments must build housing because the private sector won’t

According to a study the Canadian Centre for Policy Alternatives released on October 4, the government can’t depend on the private sector to build housing. The government has to do it themselves.

It says that private developers are investing less because of high interest rates; so the government should focus on direct spending on housing. The government should build “non-market housing” or provide zero percent mortgages to housing co-ops and other non-profit organizations to build housing units. Even so, building new non-market rental housing is a medium and long-term solution.

The report does have some proposals which would have impacts in the short-term. It follows the lead of the Canadian Housing and Renewal Association (CHRA), the national voice for the affordable housing sector, has pushed.

The CHRA has pointed out that while there are federal funds to assist in construction of new, affordable community-housing buildings, there are no such funds to help the community and not-for-profit sector purchase existing rental properties as they go on the market. 

The Association argues that an annual federal investment of $1.5 billion could enable the sector to acquire several thousand existing rental buildings per year.

That would help keep much-needed rental units out of the speculative marketplace – and convert for-profit properties, where rents can skyrocket overnight, into non-market and affordable housing. 

The CHRA estimates such a federal investment could make an additional 6,000 affordable rental apartments, townhomes and flats available each year.

The Canadian Centre for Policy Alternatives also says governments “could outlaw Airbnbs and other short term rental platforms from big cities for five years to provide some breathing room for new builds.”

While at the same time the CCPA suggests “we can save the greenbelt by opening up the single-family home belt.” They propose municipalities and provinces eliminate the widespread practice of restrictive zoning, which limits construction in many urban areas throughout the country to single-family houses.

Existing zoning rules favour either neighbourhoods of single homes, each on their own lot, or of high-rise apartment buildings. What we need, CCPA and many others argue, are more duplexes, triplexes, and row houses – human-scale but still relatively dense housing for families.

The Centre also suggests “all levels of government should work to strengthen and enforce rent controls.”

The report wants governments to implement large transfer taxes on investment properties and heavy restrictions on mortgages for investors.

The CCPA report concludes:

“Governments at all levels have been shouting about the housing crisis, and the need to build new housing supply, but their solutions are stuck in an era when the private sector was actually building homes. With private sector investments collapsing in housing construction, governments need to fill that gap.”