Overwhelmed by a firehose of political promises to fix the housing crisis? Here’s a breakdown of new proposals — and which ones might actually work

The expected impact

Experts broadly agree more supply could moderate price growth, since it could reduce competition that can drive prices up further. But to make a real dent, they said that new home construction would have to be significant enough to fill current demand, as well as latent demand from those waiting to start their own households, such as a young adult living with their parents. Any impact from increased construction will be gradual — and likely won’t be drastic, several experts said.

Karen Chapple with U of T’s school of cities cautioned that broad efforts to build any type of home often results in projects in the easiest places — such as new greenfield subdivisions — rather than the most needed ones, like homes in urban centres.

Another caution, said U of T housing chair David Hulchanski, is these policies don’t address households facing the most serious kinds of housing need.

TMU’s David Amborski meanwhile raised an eyebrow at funds being used to reward housing starts, arguing “municipalities can’t totally control housing starts, because housing starts are a decision made by builders.” He urged governments to focus on approvals instead of shovels in the ground.

But generally, Amborski and others believe officials are right to focus on broadening market home supply. CP Planning’s Cheryll Case lauded the on-demand surety bond process as a way to allow builders to better leverage their assets to build homes, and Amborski is enthused by strategies like a higher capital cost allowance for tax purposes on new rental projects. “When we increase the supply in housing, it should (increase) the vacancy rate.”

The expected impact

These are the policies with the most potential to help those in dire housing need, experts say — the question is how much of a punch they can deliver. For instance, the not-yet-released funding formula for the federal co-op program will determine the degree to which the new co-ops can offer subsidized rents, noted Hulchanski, and by extension, the number of lower-income households that will benefit.

Across the board, experts say they’d like to see governments invest more in this area. Carleton’s Steve Pomeroy pointed out that simply boosting market supply wouldn’t push prices down far enough to address those in the most acute housing need, because a drastic drop in price would likely prompt developers to put projects on ice, stalling new construction. Here, public policy intervention is critical, Pomeroy and others stressed.

“Those are hugely important programs, because they provide the types of nonmarket security of tenure type of housing that has been sorely missing in our cities,” said Siemiatycki.

Chapple is enthused, too, by the federal government’s focus on preserving lower-cost rental stock, as it has deeper pockets than cities and can augment those established programs with more buying power. “This is the number one issue, that we’re losing affordability much faster than we can build,” she said — a sentiment echoed by Case, who sees the new investment as an endorsement of the role that non-profits hold in solving the housing crisis. It was a model with demonstrated effectiveness, she said, pointing to early adopters such as Toronto’s Parkdale Community Land Trust.

Still, Chapple sees gaps in the current response, with government budgets lacking programs to create rent-geared-to-income housing on any major scale, despite cities like Toronto having wait-lists of more than 85,000 households. The city’s current housing plan aims to create 6,500 new rent-geared-to-income homes by 2030, but that plan requires billions of dollars in yet-uncommitted funding.

The expected impact

Experts suggest the current programs and spending vows won’t meet some of the sweeping goals elected officials have outlined, including the federal goal of eliminating encampments nationwide, given the severity of the problem today.

“It’s hard to criticize well-intended solutions that are throwing a fair amount of money … but in the end, there’s the issue of missing the forest for the trees,” said Chapple, noting homelessness will continue to rise so long as the gap between housing costs and what low-income earners can afford persists.

Several of the experts who spoke to the Star noted the city’s own plans are limited by their dependence on the federal and provincial governments coughing up money, as municipalities don’t have the same revenue tools at their disposal. The issue has been on display lately, as a federal-provincial dispute over housing targets has stalled money for the Canada-Ontario Housing Benefit leveraged by city workers to move people into housing.

Pomeroy sees an overall mismatch between government rhetoric and the way homelessness is approached in policy. Many of the federal funding efforts are spread over many years, he pointed out, rather than spending more upfront and approaching the problem as a crisis. “They’re big on announcements, but slow on actually creating outcomes,” Pomeroy said.

As the issue continues to worsen countrywide, experts see investments into supportive housing and other subsidized housing models as the most promising interventions — offering not only a way out of homelessness, but the kind of housing that can prevent someone from falling into it in the first place.

One program Amborski noted as being effective is the federal Rapid Housing Initiative, which has funded several new supportive housing developments in Toronto since 2020. The effort received more funding through this year’s budget.

Case is also encouraged by some of the language in the latest federal plan — notably, the idea of incentivizing “community-based” action plans. “When human rights (are) centred, it prioritizes the dignity of those who have been left with no other option than to be on the street, and the establishment of processes that protect dignity (by) ensuring all people have dignified permanent housing solutions — so they don’t end on the street,” she said.

The expected impact

“For me, I’m at a wait-and-see on this one,” Siemiatycki said of the growing enthusiasm for modular housing. While newer housing models have promise, experts say, several noted that real costs savings would require the industry scaling up to much higher output levels.

“What we don’t know yet is, can this handle when we’re building hundreds of thousands of housing units?” he asked. Factory built housing was “capital intensive,” he said — and while that worked when business was booming, it could make those companies more vulnerable to significant financial losses during times of economic downturn.

The effort by governments to encourage factory-built supply has been seen from time to time across the decades, said Hulchanski, but has repeatedly struggled to scale up significantly — leaving him skeptical that elected officials have figured out a way around it this time. “For many, many decades they’ve not been able to pull that off,” he said.

The policies aimed at boosting the skilled trades workforce, however, are more roundly expected to pay off. “I think everybody agrees that labour is a huge bottleneck,” said Chapple, as Case called it a “key piece of the puzzle.”

Amborski, who sat on a recent provincial housing affordability task force, said the skilled labour shortage was among the major problems that task force identified in today’s construction market. Along with steering young people toward the trades, Amborski sees a role for immigration — an idea echoed in the federal strategy, with a vow to “streamline” the recognition of foreign credentials for skilled workers such as electricians and ironworkers. “You can’t ramp up production without the labour and skill sets to do that.”

The expected impact

Approval delays are a serious hurdle to building housing, experts agree, but governments have long recognized this problem. The major question now is whether the latest series of proposals will more effectively move projects along. “It’s really one of those machinery of government challenges,” said Siemiatycki. “And it’s been such a vexing challenge. It seems like it should be fairly straightforward.”

It was a problem with real cost implications, experts said. The longer a project takes, the costlier it could become — and the more uncertain. A project moving its way through the process in recent years would have likely seen their costs spike, as the market has faced headwinds like higher interest rates. That risked rendering proposals no longer viable. The faster an approval moves, the less uncertainty it faces, as the risk of the market drastically changing goes down.

The issue has persisted for decades, Hulchanski said, though he sees significant improvement compared to the process 20 or 30 years back.

The fix needed to be a combination of “carrots and sticks,” said Chapple, who suggested governments reward progress made on housing approvals with much-needed infrastructure dollars such as money for new subway systems.

Some experts cautioned against pointing a finger distinctly at municipalities, with Pomeroy observing a recent shift in provincial thinking — as Ontario has proposed its “use it or lose it” rules to spur developers with conditionally approved plans to move ahead. In some cases, the bottleneck wasn’t in approvals, he said. “It was the getting-on-and-doing-it process.”

The expected impact

Policies that help boost young households’ home-buying power are friendly to voters, experts say, but risk worsening the broader problem by stoking already gummed-up demand.

“It runs the risk of pouring fuel on the fire and escalating prices, because essentially you’re putting more capital in, and enabling people to spend more,” said Siemiatycki. It’s a sentiment echoed by several experts, though many acknowledged these kinds of policies can be politically popular with younger households shut out of an increasingly expensive ownership market.

“At the expense of all other renters and homeowners, a small number of people are getting a small boost whether they need it or not — because it’s not means tested,” Hulchanski said, echoing concerns about fuelling demand.

But the criticism was not universal. Chapple sees moves like longer amortizations as promising, citing similar policies adopted in the U.S. decades ago that she said helped boost home ownership rates. She sees it as a fairly simple strategy with the power to help a “large chunk” of the population.

Pomeroy, meanwhile, said such policies could help ease demand in the rental market by helping families move along into ownership. That kind of migration could be effective, he said, and he sees the government as trying to balance the risk of pushing up prices by limiting longer amortizations to newly built supply.

Case sees targeted supports towards first-time buyers as an “essential” way to reverse current trends, where owners of multiple homes are making up a greater proportion of home purchases and ownership. That increased market dominance risked crowding out young people and immigrants, she said.

The expected impact

Moves aimed at building more student housing have earned enthusiasm from experts, who see the proposed Planning Act changes as encouraging educational institutions to take on more of a city-building role — and potentially alleviating pressure on surrounding markets. “I love that. It makes me very excited,” said Chapple.

Siemiatycki echoed her sentiments, raising the example of a scrapped plan to build a highrise Toronto Metropolitan University residence on Jarvis Street in 2022, with the university citing a “drastic” increase in construction costs. If the project was able to move faster, Siemiatycki wonders if the project could have proved viable — and sees the proposed Planning Act change as one way to speed up the process of developing future student housing sites.

Schools may still run into hurdles, Amborski cautioned — such as having the capital to build housing at all. But he sees the move as helpful, and potentially a way to reduce costs such as by not needing to hire consultants to steer a project through municipal planning approvals.

Some of the policies aimed at renters earned less fanfare. While experts agreed funds for tenant advocacy and pushback against unfair evictions were beneficial, Hulchanski and Pomeroy argued the $15-million national fund will have limited reach. Hulchanski also cast doubt on the feds’ hope that disclosing past rents will give tenants more negotiating power, saying low vacancy rates in major cities leave little bargaining room.

While Case sees the new policies aimed at renters as positive steps, she argued more work was needed to protect tenants countrywide — such as better policies to prevent tenants from being kicked out in bad faith.

“Toronto, Ottawa, and Hamilton have been taking meaningful steps to curb unfair evictions,” Case said, pointing to those cities’ efforts to create new anti-renoviction bylaws and urging a wider effort to strengthen the system.

The expected impact

Much like speeding up building approvals, experts see the effort to unlock surplus, government-owned land for housing development as an area with great potential — but one that governments have struggled to harness, even as they’ve recognized the problem for many years.

“This is one of the most important public policy areas when it comes to housing. We have a wealth of publicly owned land, and it is our common wealth — it belongs to the governments and by extension, our communities. But for decades, it’s been underbuilt,” said Siemiatycki, listing examples from underused parking lots to post offices with nothing above them.

Case sees these publicly owned sites as having considerable potential to contribute to affordable housing projects in particular.

But several experts cautioned that retooling this land can be labour-intensive, and projects would still have to make the math work in a difficult market. “My one concern here would be that it’s kind of harder than it sounds. It’s not like oh, here, let’s turn over all this property to you. A lot of the public land, it’s in awkward places and it’s awkward sized parcels,” said Chapple.

In Toronto, a years-long effort to build housing on publicly owned land — through a city development program called Housing Now — has hit repeated barriers, having to upgrade site infrastructure and contend with local pushback.

The process could also become more complicated, Siemiatycki said, as the federal housing strategy includes a goal of leasing rather than selling the land where possible, to maintain more control over affordability. “There’s potential there, but those deals are complicated,” he said.

In the long term, Pomeroy sees leases as a more sensible policy — offering the government more leverage over how the property is used and the cost residents are asked to pay.

When reframing government lands to be used for housing, Hulchanski urged officials to think deeply about who is reaping the rewards. Rezoning a parcel of land could make it “enormously valuable,” he said — and he would hope to see those financial benefits in public hands.

The expected impact

These policies could be beneficial, experts say, but don’t hold your breath for them to be heavy hitters for affordability. Foreign buyers make up a relatively small segment of even red-hot markets like Toronto, with one report finding just 533 of Toronto’s residential transactions in 2022 would qualify as foreign purchases out of nearly 28,000 sales that year.

“I’m not sure the problem is as great as some people make it out to be,” said Amborski, while acknowledging there may be some impact on demand from the federal ban remaining in place. Experts offered similar remarks around vacant home taxes, which in Toronto brought in around $55 million in revenue for 2022, but has seen a disastrous rollout this spring.

It was good that governments like Toronto’s were taking a closer look at issues such as home speculation and any loss of long-term rentals to the short-term market, said Hulchanski — but he sees the city policies as only a start.

When it came to large-scale real estate investors, Siemiatycki said opinions were divided within the homebuilding and academic communities — with some observers arguing large investors have more capital to invest into and maintain housing stock, while others have argued their motivation to earn profits left tenants at risk of rent hikes or improper evictions to drive turnover.

To Case, these kinds of government strategies are also a way to ensure first-time buyers aren’t outmuscled for homes. “In regards to capital, Canadians cannot compete with corporations for the purchase of single family housing.”

Chapple, too, sees it as prudent for officials to be wary of housing financialization — noting it had played a “destructive” role in other countries, as corporations reaped in equity rather than individual families.

It was unclear why the government’s focus was on single-family homes, said Pomeroy, given similar dynamics existed with investment trusts buying up multi-unit buildings. Overall, experts say the specifics of the policy will be make-or-break.

“It really will depend on the details of how this gets rolled out,” Siemiatycki said.

The expected impact

Fourplex legalization is a step in the right direction, but getting real density built is harder, experts say — as cities like Toronto that already legalized fourplexes have seen limited uptake, with just 74 applications received as of early April.

A similar trend has played out with accessory dwelling units like granny flats and laneway suites, with Siemiatycki pointing out the steep upfront costs for homeowners — with such a project easily costing hundreds of thousands of dollars. Then, there’s the question of impact. Even with newly promised loans, secondary suites built as rentals — rather than to house aging parents or cash-strapped adult children — will likely come at a premium due to the cost.

“These are not going to be affordable units for the most part,” Siemiatycki said. Still, he sees these kinds of density efforts as promising — and believes every step forward is important. While the province has endorsed three units on any lot, he believes moving the dial to four units can make a difference in terms of viability — with the revenue potential of that fourth unit making a redevelopment worthwhile to pursue.

Case sees the current public conversation around density as a “landmark” moment, where more attention than ever is being paid to “exclusionary practices of single-family exclusive neighbourhood zoning and policy.”

The rule changes are new and the resulting housing supply just beginning to materialize, she said. If paired with financial incentives and regulations to add a degree of affordability, Case sees added neighbourhood density as “essential” to achieving current housing goals.

Increasing density in cities was harder than building a new greenfield development, said Pomeroy, and certainly slower. “It’s very, very hard to that kind of stuff at scale and quickly,” he said. Still, these efforts could offer more people access to neighbourhoods with transit and amenities within walking distance, he said.

Chapple argued that while it wouldn’t likely help low-income households, new multiplex homes and secondary suites could offer an option to those with mid-level incomes, which could free up lower-cost spaces. These new units can also boost supply in “good locations,” added Amborski, though he also forecasts limited uptake — especially in today’s trickier market conditions.

“Don’t expect it to be overwhelming,” he said.