New homes are built in Ottawa, on Aug. 14, 2023.Sean Kilpatrick/The Canadian Press
Jennifer Keesmaat is the chief executive of Collecdev-Markee, a member of the National Taskforce on Housing and Climate, and the former chief planner of the City of Toronto.
By any measure, Canada needs to build more housing in the next decade – more than we’ve ever built in the past. Adding more supply will relieve the pressures being felt on all ends of the housing continuum, with middle-class homeowners feeling insecure about the stability of their housing, young people losing sight of a path to home ownership altogether, and newcomers struggling even to pay rent, as homelessness continues to surge. Today, the average price of the average home in Vancouver, for example, is 12 times the average Canadian salary.
And yet our housing starts are actually slowing. While we have been building almost continuously, it’s still not nearly enough, especially when you compare today’s per-capita numbers with those in the 1970s. We have an aging population and a slowing birth rate, which means immigration is fundamental to ensuring that a new generation of workers, leaders and taxpayers can keep the machinery of our economy viable – but our home-building has not kept up with this outsized growth.
The irony of finding ourselves in this situation as a country is that we are good at building homes. We have a robust and capable home-building industry – one of the most effective in the world – with remarkable skilled tradespeople powering it.
So where did we go wrong? And how can we get ourselves out of this mismatch of infrastructure and population growth?
All new housing begins with access to land, but for too long, the norm has been greenfield development: building exclusively on undeveloped land. But this model is old and broken. It underutilizes that land and infrastructure, and demands high but hidden public subsidies. Surging borrowing costs and the rising price of labour, construction materials and government permitting are also slowing down the industry, at a time when we need to be rapidly building across the country, at scale.
We should instead be aiming to build homes where roads, water, electricity, schools, parks, transit and amenities such as grocery stores and health services already exist. This kind of infill development isn’t just fiscally prudent – it also creates the density that’s needed to make high-quality transit viable, ensuring we can add more people to our cities without adding more cars, which is crucial if we plan to meet our carbon-reduction goals as a country. The possibility of living with more transportation choices, including walking, cycling and public transit, also reduces overall household costs.
The good news is that we have an abundance of underutilized land in low-density neighbourhoods and communities across the country that are ripe for redevelopment and infill. Municipalities and provinces own a significant amount of this land, which includes surface parking lots; in many cities across the country, that land is already adjacent to transit.
Excellent precedents also exist where schools, libraries and even fire stations have been integrated into multiresidential buildings. These municipal lands present an opportunity to move quickly to create new homes, precisely because the land is in public ownership.
Various levels of government can incentivize building partners to continue building, by partnering on these viable new housing development sites that are held in public ownership and offsetting costs by providing land through land-lease arrangements. The federal government can assist by providing low-cost construction financing through the Canada Mortgage and Housing Corporation, thereby mitigating the current high cost of borrowing during the construction period. No new organization would be required to advance this strategy; by partnering with the private and not-for-profit sector to build on public lands that will stay public in perpetuity, we can meet multiple objectives all at once.
Home builders, of course, will keep building, even as traditional projects are held in abeyance because of onerous costs. Municipal and provincial governments, as well as the federal government (through the Canada Lands Company), can drive down the cost of new housing by contributing existing and available land for infill development through this land-lease strategy. In doing so, they can require housing for middle-income earners, in exchange for the lower land cost. We have partnered with the City of Toronto to deliver exactly this model: We are rebuilding city space in the podium of a new multiresidential building, and delivering 30 per cent affordable housing. Given that many of these sites are near transit, municipalities can further mitigate onerous costs by forgoing parking requirements – further shaving tens of millions from the development costs.
For his part, Housing Minister Sean Fraser said that Ottawa is looking to better leverage public land for housing. “There are enormous opportunities to remove the cost of land, which is one of the biggest costs and biggest increases in the cost of building in recent years,” Mr. Fraser told me in an interview last week. “If we can help mitigate that cost increase and extract important commitments from people who will want to build to actually offer a certain level of affordability, it’s a no-brainer.” And to that end, the B.C. government has stepped up: On Tuesday, it announced the BC Builds program, which is aimed at speeding up approvals and offering low-cost land and financing for rental-housing developments on more than 20 provincially owned but underused sites. The federal government has promised to contribute $2-billion.
Similar partnerships across the country to unlock land owned by municipalities and provinces, backed by low-cost federal construction loans, would reignite our home-building industry. What’s more, they represent an immediately implementable opportunity that the federal government can scale quickly across Canada through a Public Land Housing Incentive Program, and invite municipal and provincial partners to implement it.
B.C. is showing how to get it done. What is the rest of the country waiting for?