Shauna MacKinnon, the chair of Urban and Inner-City Studies at the University of Winnipeg published an article last February calling Canada’s 30-plus year experiment of trusting the private sector to provide housing “a failure.”
Despite a repeated push from advocates to create more non-market housing options, the province of Ontario still relies on the private sector to reach its housing targets. Unfortunately, Ontario has also repeatedly failed to reach its own housing targets.
Ricardo Tranjan, an economist with the Canadian Centre for Policy Alternatives with a focus on housing, said for-profit development follows a market logic, and these delayed housing projects shouldn’t come as a surprise given Ontario’s reliance on for-profit developers to build housing.
“It’s cyclical, we only build when we can make a lot of money out of it — or good money out of it,” Tranjan told PressProgress.
Tranjan said that housing prices are currently falling in Ontario, which means housing starts will slow down, which will limit supply and drive up prices. Once prices go up again, supply will begin to increase.
Canada’s non-market housing programs were gutted in the 90s by the Mulroney and Chrétien governments.
Since then, responsibility for housing has been downloaded to provinces — and certain responsibilities have since been passed down to municipalities. Meanwhile, housing affordability has continued to decrease.
Which part has no basis in reality?
I’m not sure that’s the case. Boomers are a shrinking demographic. The proportion of the population who thinks they’ll never own a home is growing. In that environment, I can see a growing appetite for legislation that would lower housing cost.
Incidentally, a great way to do that is with tax reform, which could instantly remove some of the heat from the market. It doesn’t always have to be big spending.