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Seven ways to fix Canada’s housing shortage

Justin Schurman, RBC Regional Vice President, Business Financial Services

For most Canadians, the dream of owning a home is getting more elusive.

Affordability has worsened. 

Here in Ottawa, it’s near it’s all time worst (RBC Economics Report – Outlook on Canadian Housing – April 2024).  

The Federal Government announced key measures in the 2024 Budget – including 30-year mortgage amortizations for first time home buyers, enhancements to the Home Buyer’s Plan and a Housing Accelerator Fund – to fast-track construction and meet housing targets.

Recent provincial funding announcements saw millions go towards affordable housing and infrastructure in Ottawa. Just last week, the Ottawa Board of Trade announced a downtown action plan – A Living Capital to attract more people and jobs to the core.

Still, even with easing interest rates that are sure to help, there is much to be done to address the housing affordability crisis.  

RBC Economics and Thought Leadership recently released The Great Rebuild: seven ways to fix Canada’s housing shortage. The study indicates that the number of Canadians who can afford to buy a home has shrunk considerably over the past two decades. 

At its core, the housing crisis is a supply and demand issue. Canada must grow it’s housing stock including more affordable housing.

The report looks at Seven recommendations – for action between now and 2030.

  • Get more people working in construction to aggressively expand the labour pool – that’s 500,000 more construction workers just to build houses to meet demand. With looming retirements we need to attract more people to the trades, upskill newcomers and recognize credentials from elsewhere.
  • We need to boost productivity. More innovation in home designs, new building techniques, leveraging technology because we can’t build houses like we do today. Let’s look at pre-fabricated houses, where conditions, timelines and costs could be more efficient.  
  • Speed up approvals and reduce regulatory requirements, harmonize building codes and streamline processes to help move things along faster. It will make investments in this sector more attractive too.
  • Allow more density and types of housing by easing zoning restrictions, including in residential neighborhoods. Restrictions have long stifled rental housing or multi-unit residential options. Here in Ottawa, the intensification strategy and nodes around Light Rail hubs are opportunities to bring different types of housing to the market.
  • Lower the cost for new housing. Costs have soared with materials and labour account for roughly half the cost of new units. Government charges and land cost make up the rest.  
  • Change the mix and offer incentives to build more rental properties, apartments and multi-unit homes. This will help match demand for rental housing and make it more attractive for builders. 
  • Expand the housing stock from within.  Reclaim what we have and unlock the capacity of our existing residential structures and properties. Make it easier to convert non-residential buildings, including vacant office space, into homes, build secondary suites. 

Solving the housing crisis is a massive undertaking. It requires greater collaboration between all levels of governments, industry and other stakeholders.

The office to residential conversion – an emerging trend which not only addresses the need for more housing but also adds to the revitalization of the downtown core – is encouraging too.

At the same time, we have to keep in mind the emissions generated and impact on our climate.  We need to look at how and what we build. We have to make building and buying energy-efficient homes more attractive too.  

By working together in the private and public sector, we can make home ownership more accessible and affordable for Canadians.

This RBC Study was shared as part of the Ottawa Growth Survey event in Ottawa.

Justin Schurman is regional vice president leading RBC’s Commercial Banking team in Ontario North & East region.

Throughout his 26-year career at RBC, Justin has held a number of leadership and individual contributor roles in Commercial and Retail Banking across Atlantic Canada, Greater Toronto Region and Ottawa.