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Newly minted housing minister Sean Fraser, who recently said he will be increasing housing affordability without bringing down real estate prices. The sentences are mutually exclusive. Photo by Justin Tang\/The Canadian Press<\/p>\n\n\n\nTOP STORY<\/h3>\n\n\n\n
Read the conversation Have your say Leave a comment and share your thoughts with our community. Read All 370 Comments<\/a><\/p>\n\n\n\n This may be the month that the Trudeau government officially dropped all pretence of caring about fixing the housing crisis.<\/p>\n\n\n\n The Liberals strode into office in 2015 with promises of unlocking home ownership for the middle class. Instead, housing prices under their tenure have nearly doubled<\/a>, and even in Canada\u2019s mid-sized cities, home ownership is increasingly out of reach for anyone on a median salary.<\/p>\n\n\n\n And just this week, newly minted housing minister Sean Fraser effectively told Canadians to accept these numbers as the new normal. Whatever tack Ottawa is going to take on housing, they will be ensuring that prices stay high. \u201cOur goal is not to decrease the value of their home,\u201d Fraser told Bloomberg News<\/a>.<\/p>\n\n\n\n But there was a time when Ottawa could look upon a country critically short of homes, and respond not with finger-pointing, but with an all-out construction boom the likes of which Canada had never seen. Affordability surged, rents dropped and analysts soon began to boast that Canadians were \u201cnow among the best housed people in the world.\u201d<\/p>\n\n\n\n The prime minister during this long-lost golden age in affordable housing also happened to be named Trudeau. Tragically for the two-thirds<\/a> of young Canadians who have now officially given up on owning a home like their parents, there\u2019s no real reason Trudeau\u2019s son couldn\u2019t have done much the same thing.<\/p>\n\n\n\n In 1974 \u2014 the same year that Pierre Trudeau won a shattering re-election victory \u2014 the number of new homes built across Canada reached a level that they\u2019ve never since exceeded. In that year, builders put the finishing touches on 257,243 new Canadian homes.<\/p>\n\n\n\n By comparison, over the last 10 years Canada has averaged just 197,000<\/a> annual housing completions \u2014 76 per cent of the 1974 peak.<\/p>\n\n\n\n The contrast is all the more remarkable given that there were only 22.8 million people living in Canada in the mid-1970s. In 1974, one in every 100 Canadians could have purchased a brand-new home, and there still would been several thousand to spare.<\/p>\n\n\n\n And this rate of feverish home-building kept up for quite some time. For the entire 1970s, an average of 229,113 homes<\/a> were built every single year. In the 43 years since, the 200,000 mark has been cracked only a handful of times.<\/p>\n\n\n\n What\u2019s more, the 1970s were also relatively low-immigration years for Canada. There wasn\u2019t a single year of Pierre Trudeau\u2019s 15-year premiership in which the number of new immigrants was higher than the number of new homes. In 1978, Canada completed 246,533 homes and welcomed just 86,300 new immigrants<\/a>.<\/p>\n\n\n\n None of the 1970s property boom was by accident. The sheer volume of new homes hitting the market was the end result of a federal government that openly vowed to put its middle and working classes into respectable accommodation \u2014 and actually meant it.<\/p>\n\n\n\n \u201cWe must \u2026 not only improve the operation of private markets in order to accelerate the total output of housing but we must also stimulate the provision of modest accommodation for low-income people,\u201d Liberal MP Robert Andras \u2014 a perennial Pierre Trudeau cabinet member \u2014 declared in 1969<\/a>.<\/p>\n\n\n\n Poverty had been on the upswing throughout the 1960s, and the solution pitched by the Liberal government was to throw up whole cities of new homes practically overnight, so that these growing ranks of Canadian poor would at least have a place to live.<\/p>\n\n\n\n In the 1970s, the housing-assistance activities of the Canadian Mortgage and Housing Corporation \u201cexploded,\u201d according to one history of the era<\/a>.<\/p>\n\n\n\n A latticework of loan guarantees, tax credits and direct subsidies emerged to put millions of Canadians within reach of home ownership, and the construction market roared into high gear to meet the new demand.<\/p>\n\n\n\n Meanwhile, the Canada Rental Supply Program extended interest-free loans to developers who built social housing, and a firehose of federal monies was directed at subsidized housing projects.<\/p>\n\n\n\n \u201cIn the heyday of Canadian social housing from 1965 to 1990, 10 percent of total housing production was non-profit, public or co-operative,\u201d wrote housing analyst Greg Suttor<\/a> in a 2017 profile of this period.<\/p>\n\n\n\n That was enough affordable homes to \u201chouse half the lowest-income segment of the roughly 170,000 households added in Canada each year,\u201d noted Suttor.<\/p>\n\n\n\n And rather than city cores increasingly becoming conclaves of the rich, the 1970s saw a flourishing of low-income options opening up \u201cin the same neighbourhoods as middle-class Canadians lived in.\u201d<\/p>\n\n\n\n When the Canadian government spoke of housing policy in the 1980s, it was framed as an unvarnished national triumph that stood as an example to the world.<\/p>\n\n\n\n \u201cWe have tripled our housing stock and rehabilitated the best of our older dwellings. Canadians are now among the best housed people in the world,\u201d read a 1987 report<\/a> issued by then housing minister Stewart McInnes.<\/p>\n\n\n\n It was basically the polar opposite of the situation now. The yearly output of new Canadian homes has now been stagnant for at least 20 years. In 2002, housing completions stood at 185,626. In 2019, the last full year before the COVID-19 pandemic, they stood at a near-identical 187,177.<\/p>\n\n\n\n At the same time, the number of Canadians needing homes is reaching meteoric highs. In 2022 alone, Canada registered one million new immigrants<\/a> against 219,942 new home completions.<\/p>\n\n\n\n It\u2019s now been a full 24 years since Canada has come close to marking a year that, like the 1970s, saw the number of new homes outpace the number of new immigrants.<\/p>\n\n\n\n A recent TD report forecast that if these trends continue, Canada\u2019s housing shortfall will grow by another 500,000 units<\/a> in just two years. \u201cGreater thought and estimation needs to occur on what\u2019s a true absorption rate for population growth,\u201d cautioned the writers.<\/p>\n\n\n\n The cause of the Canadian housing affordability crisis has always been pretty simple: There are too few homes.<\/p>\n\n\n\n There are ways to tweak this by banning foreign investment or raising interest rates. But if immigration is going to stay at historic highs (and the Trudeau government has indicated that it might climb even higher<\/a>); home prices aren\u2019t going to be returning anywhere near normalcy until Canada can start building way more homes, way faster.<\/p>\n\n\n\n Even before recent immigration spikes, Canada already had<\/a> the greatest structural housing deficit in the G7. According to a Scotiabank estimate from 2021<\/a>, it would require an extra 1.8 million homes just to reach an affordability rate on par with the rest of the G7.<\/p>\n\n\n\n At current home building rates, even if the Canadian population stayed put it would take nine years just to make up the gap.<\/p>\n\n\n\n There\u2019s no real reason that Canada couldn\u2019t pull out all the stops to re-enact the 1970s building boom \u2014 although there are a few major barriers in the way.<\/p>\n\n\n\n For one, much of the low-hanging fruit is gone.<\/p>\n\n\n\n Nowadays, any significant expansion of the Canadian housing stock would likely require a fair bit of \u201cintensification\u201d: Turning single-family homes into four-plexes, building apartment buildings in the suburbs and remaking infrastructure to handle denser cityscapes. But in the 1970s, even in Canada\u2019s largest cities, expanding the housing supply was usually just a matter of greenlighting some more subdivisions.<\/p>\n\n\n\n In 1977 Vancouver, single-family homes were so plentiful that it was still possible to buy one for the modern equivalent of only $375,000<\/a>. In Toronto, when the 56-storey TD Bank Tower first opened in the middle of the city\u2019s financial district in 1967, the city\u2019s density was so low that its next-door neighbour was a surface-level parking lot<\/a>.<\/p>\n\n\n\n \u201cWe can\u2019t easily sprawl our way out of this,\u201d said Steve Lafleur, a public policy analyst who writes often on the subject of housing affordability. Fifty years ago, builders could still \u201cplop down a subdivision a 20-minute drive from the heart of the national economy,\u201d said Lafleur.<\/p>\n\n\n\n But if there\u2019s one glaring roadblock preventing Canada from pursuing a second all-out building boom, it\u2019s the fact that today\u2019s municipalities are way more obstinate than their 1970s predecessors. Restrictive zoning laws and other thickets of municipal red tape have largely kneecapped any ability of developers to build with the feverish intensity of the 1970s.<\/p>\n\n\n\n In the 1970s, said Lafleur, \u201cthe feds were serious about expanding affordable rental options and the municipalities didn\u2019t really get in the way.\u201d<\/p>\n\n\n\n Cities didn\u2019t get in the way of any new development, really. \u201cThe image of rapid growth in \u2026 major urban centres was widely accepted in the late 1960s and early 1970s,\u201d read a 1975 report by the Science Council of Canada. Vancouver in the late 1960s and early 1970s was so uncompromisingly pro-development that there exist images of its mayor riding a wrecking ball<\/a>.<\/p>\n\n\n\n The federal government of 2023 is again willing to drop billions on affordable housing, albeit at much lower rates than the Pierre Trudeau government. But even that \u201cwon\u2019t move the needle because municipalities aren\u2019t willing to accommodate enough growth,\u201d said Lafleur.<\/p>\n\n\n\n