Insights
perspective matters
November 6th, 2023
Housing Accelerator Plan
Romy Bowers the CEO of CMHC gave testimony to Parliament that stated there was NO PLAN in place to solve the housing crisis. We use our study of the Canadian Housing Stock to provide a path forward to add
2.3 million new homes within 6 years of that plan being implemented and adhered to!
Let's really Accelerate Growing the Housing Stock.
Let's believe we can accelerate that growth by a strategic targeted increase in the annual housing stock growth rate across Canada's Urban Housing Stock.
Canada today has 13.6 million homes located in Urban boundaries.
In order to reach 15.9 million homes within Urban boundaries within 6 years after a plan is enacted requires a
Urban Housing Stock Growth Rate of 2.2% annually.
Pre-Plan Year 300,000
1st yr 300,000
2nd yr 330,000
3rd yr 363,000
4th yr 400,000
5th yr 440,000
6th yr 480,000
Total New Plan Homes 2.3 Million
For Context we turn to Burlington, Ontario to see the building demand that would result.
Burlington's current Housing Stock measures 85,400.
1st yr 1880
2nd yr 1921
3rd yr 1963
4th yr 2006
5th yr 2051
6th yr 2096
Total New Burlington Homes 11,917
Burlington's Housing Stock at the end of the 6th year would be 97,317
Burlington's Housing Stock would increase 14% over those 6 years.
If they were homes with backyards over 20,000 working years of high paying income would be earned by local workers or the equivalent of 500 lifetime jobs.
For a Housing Accelerator Plan to be successful the plan must set a goal that is attainable.
Municipal Governments in Canada in the past have navigated Housing Stock Growth Rates of 2.2% and even beyond, so we can conclude we can do it today.
The People who build the homes must exist so a reasonable 2 to 3% annual growth target in new construction workers coming directly from existing high school graduates is realistic without any added immigration targets required.
Immigration may be used to offset an ageing construction work force if clearly referenced in the plan.
In the past the progression from construction worker to independent small scale builder has grown Canadian Home Builders Association numbers and should be clearly targeted once again at at least the 2.2% growth target. New startup incentives for experienced workers to take the next step to builder must be taken. Even a simple 100% first year depreciation of tools and equipment could allow more home building efficiency to be accessed.
Municipalities can readily identify land requirements to grow their housing stock in harmony with how the existing stock is composed. Adhering to a sound demographic driven end of plan target, that is reflective of the forward looking demands as its citizens age, makes answering what new stock should be added a local determination but with a national standard being set.
We know now that 2030 is a key year in the Ageing of the Nation as nationally the then newly turning 84 year olds begin to see a rapid increase that will continue the next 17 years. Municipalities can quickly target what share of the new housing stock being added should be directed towards how their cities will be composed demographically starting in 2030. We must plan for an increase in lifespan equal to what Canada has experienced in the past 30 years so we should expect the 84 plus cohort to grow even quicker as longevity increases.
Establishing a national HomeOwnership Rate Target should be part of this plan before launched.
We know HomeOwnership builds financial equality in a society so we believe a Targeted HomeOwnership Rate Nationally should be set at 74% with a 72% minimum acceptable outcome.
Lets use 16,000,000 Urban Homes as our target to make this plan easier.
We strategically target for 11,840,000 Urban HomeOwnership Homes
If we strategically limit 6% of the Urban Housing Stock to be held as privately owned rental income properties
and we establish 960,000 Urban Privately Owned Rental Homes
If we strategically determine we will require 6% of the Urban Housing Stock in 2030 to house those seeking retirement home living, so we will need 960,000 such homes.
If we strategically target 6% of the Urban Housing Stock to be Taxpayer Subsidized Affordable Rentals we know we will need another 960,000 target for that stock.
If we strategically target 1% of the Urban Housing Stock as semi-permanent and time limited housing we should ensure 160,000 such units exist.
That leaves 7% of the nation's housing stock to institutional investors to own attainable rentals or
1.12 million Urban rental units.
Again with the City of Burlington used for context and without local demographic tweaks
we would end 2030 with
72,000 HomeOwnership Homes
5,840 Privately Owned Rentals
5,840 Retirement Homes
5,840 Taxpayer Subsidized Affordable Rentals
973 Semi-permanent and time limited housing
6,800 Institutionally owned Attainable Rentals
Builders, Developers and Investors all can read a local Urban target and focus on servicing that need. Municipal leaders can recruit new talent to build the homes it has identified the city needs today and tomorrow. Governments can target excess land to designate it immediately for a specific Target of the Housing Stock.
CMHC can readily create an online Municipal Housing Stock Composition Tool to allow Municipalities to quickly determine their actual housing stock needs as it is being built out. Even a bidding platform for targeted urban housing stock components could be powered by CMHC allowing the financial backing of any growth to be backed by CMHC's before a Municipality gives their approval.
Agreements can be made between all three levels of Government in how to efficiently design population growth strategies from 2030 onwards and allow Voters to speak, with the power of the vote, in what direction all three levels of government will take.
It is our understanding of the Housing Stock and the knowledge of what a great wealth equalizer that HomeOwnership has been, since the first city was built, that we would recommend adding targets to each of the Housing Stock components growth rates that would ensure greater wealth equality results across the citizens. Ensuring social goals are also met should be a planned priority.
When you view the housing stock from a national perspective instead of locally you quickly learn solutions required to grow the Urban Housing Stock in Toronto, Vancouver or Montreal are not the solutions best suited for Burlington or Calgary. A Housing Stock Compositional Tool powered by CMHC can allow each municipality to drive the most beneficial growth for its residents.
The importance of the Plan to provide existing Canadians with a reliable way to determine the future shape of their hometown cannot be understated, if the desire is for rapid plan acceptance and most efficient outcomes. Getting the whole nation on board is most readily delivered by asking everyone do an equal share of the compromise and nothing more. A national Housing Stock Growth Rate is a solution everyone can embrace equally.
No special cut outs (like Heritage Preservation) should be made especially at neighbourhood levels as that only gives an advantage to one set of Canadians over others.
Zoning laws like setbacks that currently make accessing density increases in existing neighbourhoods must be revised on a provincial standard to ensure the most efficient and fair completion of the Plan takes place.
There obviously are a plethora of considerations not discussed in this plan that are required to be taken in consideration at this time in the history of the world.
Do we demand new stock is Net-Zero to reduce our carbon footprint per capita at the same time reducing the lifetime cost of housing by reducing energy useage?
Do we establish immigration targets to ensure the Growth Rate in our plan delivers an affordable and sustainable housing stock on the end date the plan is delivered or do we tweak our 2.2% growth rate target to ensure 10 years after the plan end date happens we are not back in the place we are today?
Do we get an all party resolution that when and existing government ends and the next begins the guiding principles in the plan will not be compromised for political gain?
Why not a 100% Balanced all party non-partisan committee to get things going and allowing the least biased political influence to take place with no party seeking gain for being responsible. There can be no political gain generated for any party for simply doing their duty to house the nation.
Certainly if One Million Urban Bedrooms are being filled by non-Canadian post-secondary students we need to add that component to how we compose our housing stock growth rate plan because One Million bedrooms matter. Yes we can count bedrooms for students and homes for families both.
Finally Old Age and Death!
A study of the housing stock shows how deeply, remaining at home as long as possible, is the goal of every Canadian. This is why so many bedrooms in the Urban Housing Stock are vacant each night while shared beds are becoming increasingly prolific as forced density increases. The time has come to implement policy that leads to a rotation of the housing stock between families over our lifetimes. We must begin to tax the value of land to both keep the cost of it lower but also to ensure the silent tax-free wealth builder, that being home equity, is not multiplied in importance because we limit new land being available and have a total household taxation policy that creates a weapon of wealth, out of urban land ownership itself.
We all come to a time when we no longer want to or can live alone on our own. Allowing a few years of planning and offering a transitional view of what our futures will look like can motivate us all to change our housing situation and allow others to enjoy the homes we have. Waiting until it is too late is why we are in the place we are today which unfortunately for many is not... HOME!
Insights supplied by
Ross Kay HomeOwnership Advisors
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