🏘️ Our Crumbling Foundation: Housing Crisis Solutions

Please see our related substack episode to go deeper

For too long, we've pretended Canada's housing disaster is some force of nature—an unfortunate economic hiccup that happened to us rather than because of us. But let's cut through the noise: this crisis isn't an accident. It's the foreseeable outcome of policy choices, financial interests, and a collective failure to treat housing as a basic human need rather than an investment vehicle.

The numbers alone should stop us cold. Home prices in Canada have tripled while other costs have risen by just 43%. We face a shortfall of 3.5 million homes by 2030—on top of the 2.3 million we already needed. In real human terms, this means young families priced out of stability, renters trapped in a cycle of rising costs and declining quality, and vulnerable populations pushed into precarious living situations or outright homelessness.

Our Crumbling Foundation: How We Solve Canada's Housing Crisis

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Transcript

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Welcome to the Deep Dive. Today, we're tackling something huge. The housing crisis here in Canada. It's definitely top of mind for so many people. For sure. I mean, the costs are just soaring. Home prices have tripled, but other stuff. Only up like 43%. It's way out of sync. And it's not just the price, is it? It's also just... not enough places to live. The estimate is we need, what, 3.5 million more homes by the end of the decade. Yeah, on top of the 2.3 million we thought we'd need anyway. It's a massive shortfall. It really is. And there are a lot of factors feeding into this, things like restrictive single-family zoning in many places, less investment in social housing over the years, low interest rates, making housing feel more like an investment commodity, and yeah, the whole short-term rental thing too. Exactly. So to really get our heads around this, we're digging into Gregor Craigie's book, Our Crumbling Foundation. It's a great resource. It does a really good job of showing the human side people's real frustrations, but also looks globally for policy ideas. And that's what we want to bring you today. If you're looking to get up to speed quickly, understand the different angles, maybe have a few aha moments without getting totally buried in data. Well, this deep dive is for you. Yeah. And it's interesting. The book kicks off by looking back. way back. Vancouver, during the Great Depression. Okay, tell me about that. Hobo Capital. Yeah, that's what they called it. In 1931, something like 12,000 people ended up there, mostly arriving by train, looking for work that just wasn't there. Wow. Wow. 12,000. And they ended up in these informal camps, hobo jungles, they called them, near where Strathcona Park is now. It paints a pretty stark picture, eventually broken up because of a taphoid outbreak leading to relief camps. So what's the link to today? I mean, the causes were different back then, right? The depression. True. The immediate causes were different. But Premier Evie made an observation about today's tent cities that connects back. He talked about how when house prices rise, higher income folks move in and that can push lower income people out. Rent evictions, rising rents. Leading to displacement. Right. Exactly. So the underlying issue, a lack of genuinely affordable shelter for everyone, it persists. It's not a new problem, sadly. It really isn't. OK, so from historical Vancouver, the book jumps across the ocean. To Tokyo, Japan. And this is where things get really interesting, especially on the affordability front. How so? Well, rent in Tokyo has been remarkably stable. Free McWilliams, she moved back there in 2008. She's watched Vancouver costs just explode while her Tokyo rent has basically stayed the same. Seriously. Seriously. Pretty much. Another person, Susan Chen, pays about $800 a month for her one bedroom. She figures that would be like four times as much in Vancouver. Wow. That's incredible. Yeah. And another guy, Chris, family man, two bedroom, and a nice area for under $2,000 a month. They all talk about just less worry, less constant anxiety about rent compared to what they hear from Canada. But Japan's population is shrinking, right? Ours is booming. Mostly immigration. Over 1% growth a year. It has to make a difference. It absolutely does. That's a huge demographic contrast. And it's crucial context. Japan's population is declining. Canada's is growing fast. So comparing housing starts. Is that fair? Well, let's look. In 2021, Japan built about 850,000 new homes. Canada, about $271,000. Okay, per capita, maybe that's not wildly different. On the surface, maybe not. But here's the key thing the book points out. Even with population growth in Tokyo up until around 2018, they kept prices relatively stable. How? Okay, how? By just continuously building new homes. They kept building consistently. So it wasn't just more building, it was steady building. regardless of short-term market swings. Exactly. That seems to be the insight. A long-term, stable approach to adding supply, which is maybe something Canada could learn from, especially with our population growth. Insistent supply. Okay. Now let's flip that. What happens when supply doesn't keep up and then you throw rising interest rates into the mix? The book tells this really tough story about Pornima Molossetti in Toronto. Yeah, Pornima's story is really stark. It shows the impact of those rapid rate hikes, especially for people who bought pre-construction. So she bought in 2021. Pre-construction. Right. For $1.9 million. This is when the average detached in Toronto was already over $1.5 million. Then came 2022. And the Bank of Canada just slammed on the brakes. Rates went from, what, 0.25% up to 4.25% really fast. Super fast. And for Pornima, the consequences were immediate. Her estimated mortgage payments suddenly jumped to $10,000 a month.$10,000. A month. Yeah. Unaffordable. And then the appraisal came in. The bank valued the finished house at $1.6 million, not the $1.9 million she'd agreed to pay. Ouch. So she had a $300,000 gap she suddenly needed to cover. Exactly. A massive funding gap. And the insight here isn't just that rates went up. It's how that pre-construction model combined with those sudden hikes created this specific vulnerability. Maybe it points to a flaw in how those deals are structured or how mortgages get qualified way in advance. And the stress must have been incredible. Oh, absolutely. The book talks about sleepless nights, people literally unable to eat, marriages under strain for others in the same boat, and apparently The Builder, Paradise Developments, offered little flexibility, just pointed at the contracts. Makes you wonder about buyer protection in those situations, doesn't it? It really does when market conditions change that dramatically. And it wasn't just her. The book mentions others too, right? Mortgage renewal's hitting hard. Yeah, Mehdi Amari in Richmond Hill, his payment jumped $1,200 a month on renewal. Cardexoni in London, variable rate, up $600 a month.- And some people were forced to sell.- Sadly, yes. Anita Gupta in Kitchener, Jeff Dakers in Berry, just couldn't afford the new payments when their mortgages came up for renewal. It really highlights the vulnerability of homeowners when rates shift that fast.- Really questions that idea of homeownership as guaranteed security for everyone. Okay, so let's talk zoning and supply. what's the situation in Ontario, according to the book? Well, interestingly, Ontario's own housing affordability task force concluded that the main issue wasn't actually a shortage of land. Oh, so what was it? It was the need to modernize the zoning rules. They pointed specifically to as-of-right zoning as a really useful tool. As-of-right, meaning what exactly? Basically, it means if a proposed development meets the existing rules, height, setbacks, type of use, it can just go ahead. Without needing lengthy, complex case-by-case approvals and rezoning battles. Streamlines things. Okay, that makes sense. Speeds things up. Potentially gets more housing, builds faster. Have we seen changes like that? Yes, actually. Quite recently, Toronto and Victoria both moved to get rid of most single-family zoning. And the B.C. government did something similar for many larger cities there, too. So the focus is shifting, less about just sprawling outwards, more about building differently within existing neighborhoods. Seems like it. Allowing more types of housing duplexes, townhouses, small apartment buildings, and areas previously zoned only for single houses. More density Interesting Okay, let's go international again Paris, France What can we learn there? Paris is fascinating Because it's, you know An old, dense city But they've still managed To boost housing construction The example of La Samaritaine Is really cool A department store Yeah, that iconic building Renovated And now it includes 96 affordable apartments Alongside the fancy shops and hotel Shows creative reuse Of existing spaceships basis. That is clever. So how did they boost overall construction in the region around Paris, Isle de France? It wasn't just market forces. The book highlights specific government policies. One was a renewed push for publicly funded social housing. Okay. Direct government investment. Right. Second, really prioritizing infill development building within the city and inner suburbs, not just on the fringes. And third, and this is key, they set construction quotas for towns. Quotas. You mean targets. Yeah, targets for new homes. And if municipalities didn't meet them, they faced financial penalties, fines. Ah, so there were consequences for inaction, accountability. Exactly. Seems like that combination investment, strategic planning for infill, and accountability made a difference. That sounds pretty comprehensive. Were there other innovations? Financing, maybe? Yes. In Romainville, they have this real solidarity lease. It's interesting, you buy the apartment itself, but you lease the land underneath it, long-term, like 99 years So you don't pay for the land up front Right, and because land is often a huge part of the cost, this lowered the purchase price by about 30% in the example given Made it affordable for people like Daniel Henry, who could get a bigger place than he expected That's a really smart way to tackle the land cost issue But Paris still has challenges, right? It's not perfect. Oh, definitely not. Long waits for public housing still exist, demand is still high, and lots of Parisians are still leaving the city because of the overall cost of living. Plus, the private rental market is super competitive. So, progress, but still tough. Okay. Let's shift back to Canada and talk about renters. They face a different set of pressures, don't they? They really do. Andy Yon from SFU's City Lab points this out clearly. Renters often lack the financial backstops homeowners might have, like building equity, getting a line of credit against that equity. Right. And the capital gains tax exemption on a primary residence. Renters don't get anything like that. Exactly. Jan suggests maybe Canada needs to adapt, become more of a renter-friendly society, perhaps find ways for renters to build credit based on paying rent reliably on time. That's an interesting thought, giving value to that consistency. The book also has a story, Cindy McMurray in Russell, Ontario. shows another vulnerability. Yeah, Cindy's story really highlights the issue with rent control exemptions. She moved to Russell hoping for more affordability. But then a new management company took over her building and boom, a big rent height. Why? Because in Ontario, buildings constructed after a certain date, often newer ones are exempt from provincial rent control rules between tenants. Ah, so when a unit turns over, the landlord can raise the rent pretty much as much as they want for the new tenant. Exactly. So even if you move somewhere seeking affordability, if you're in one of those exempt buildings, you might not have the protection you thought. It makes things precarious. And the stats back this up. Ottawa example. Yeah. The book mentions in Ottawa 2022, the average rent for a two bedroom jumped 17% for new tenants compared to what the previous ones paid. That's a huge leap. Wow. And vacancy rates are super low nationally too, right? Lowest since 2001, apparently. Around 1.9% in 2022. And that's despite more rental units being built. So why are they so low then? Well, a few things. High homeownership costs are pushing people to rent for longer. Higher immigration numbers mean more demand And students returning to campuses after the pandemic disruptions, too It all adds up More demand than supply, basically Giving renters very little power Precisely It's a tough market out there And this crisis hits some groups harder than others The book talks about the Canadian Armed Forces Yeah, particularly junior members Apparently, many try to avoid postings in the National Capital Region Simply because they can't afford to live there Even with allowances The post-living differential was frozen for years, apparently And while there's a newer housing differential, it struggles to keep up with those really high costs. Plus, there's often not enough housing available right on the basis. That's tough. And there's another story, Elsie Kalu, an eviction situation. Yeah, a really difficult situation. She was basically penalized for helping her daughter secure housing, ended up facing eviction from her rental while waiting to move into a place she'd bought it. And huge delays at the landlord and tenant board just made everything worse. Just compounding the stress. The book also mentions some really grim situations. Rooming houses in Ottawa. Yeah, places like Osgood Chambers. Really squalid conditions, tragically leading to deaths. And even when renovations happen, rents often double, pushing people out anyway. It really brings home the human cost when housing is inadequate and unaffordable, especially for the most vulnerable. It's truly devastating. It really highlights the human cost, doesn't it? Okay, so moving on to potential alternatives. Berlin, Germany, and co-op housing. Right. The Möcker Keys co-op sounds pretty appealing. Reasonable rent, community feel, self-generated energy. What's really striking about Berlin is how established co-ops are. They made up about 12% of the rental stock there. Some date back to the 1800s. Wow, 12%. That's significant. And a key thing is resident involvement. People living there have a real say in how things are run. Carlo Warman's experience, stable, reasonable rent, 790 euro, including heat for 10 years. Community focus, it shows the benefits. It's a very different model from our mostly private market. Definitely a different philosophy. But Berlin isn't immune to housing pressures either, is it? No, not at all. Like many big cities, demand is rising, partly due to migration. So house prices and rents are increasing in Germany, often faster than England. And there was that referendum about expropriating big landlords. Yeah, over 57% voted yes. It wasn't binding, but it definitely showed the level of public frustration there, even with a strong co-op sector. Interesting. So the search for solutions is global. Okay, back to BC Duncan. Homelessness and people living in RVs. Yeah, Reverend Keith Simmons in Duncan talks about visible homelessness increasing and people resorting to living in RVs because there's nowhere else. He feels the government kind of walked away from providing housing. And he's calling for a national strategy. Right. And Carolina from Pacifica Housing adds another layer. She talks about the lack of stable, long-term funding for nonprofits doing housing work. Okay. And she makes a crucial point. More people are becoming homeless now for purely economic reasons, losing a job, rent hike, and then that can trigger or worsen mental health issues. It's not always the other way around. That link between economic hardship and homelessness is key. And she stresses the need for deeply affordable housing. Right. Government funded. Absolutely. Consistent government funding at all levels. Now, there's a really positive story from Helsinki, Finland. The housing first approach. Finland's approach is really remarkable. Their national policy is basically get people housed first unconditionally. You don't have to solve your addiction or other problems before you get a home. Provide the stable base first. Exactly. And the results... a huge reduction in homelessness single homelessness dropped from around twenty thousand in the mid eighties to under four thousand by twenty twenty one pausse heitnen's story in the book homeless due to addiction got an apartment through housing First, it shows how that stability can be the foundation for recovery. And they've actually converted shelters into apartments with support staff. Yeah, transforming the system. And cost-benefit studies suggest it might even save money overall. Less spending on emergency shelters, ER visits, police time. So it's potentially more humane and more economical. That's the argument. Now, there are still challenges, of course. Some individuals are very difficult to house. You need various support levels and maybe some complacency sets in when homelessness is less visible. But overall, it's a really compelling model. Definitely something Canada could look at more closely. Yeah. OK, another big factor, short term rentals. Airbnb and the like. Yeah, the book uses Jean-Francois Raymond's story in Montreal. He got evicted from his long-term apartment because the building qualified for short-term rentals. Suddenly, he couldn't find anything affordable in his own neighborhood. That's rough. And Montreal used to be seen as a renter's paradise, right? It had that reputation. High percentage of renters. But the book suggests that's changing. More big corporate landlords' REITs coming in, less social housing being built. Leading to things like rent evictions. Exactly. Landlords evicting tenants, doing renovations, then jacking up their rent. It's easier for them to do when vacancy rates are so low, tenants are vulnerable. Has Montreal tried to fight back? They've done some things, like giving the city the right of first refusal to buy rental buildings when they go up for sale, trying to keep them affordable. But enforcing rules against short-term rentals is notoriously tricky. Yeah, the Santa Monica example. Right. Even with rules, monitoring and enforcement are hard. Scott Chatford's case there showed how much money could be made, even with potential fines. It's a constant battle for cities trying to balance tourism and housing needs. It's a tough balance to strike. The book also tackles discrimination in housing, which is obviously a huge issue. A deeply concerning one. Caring Clidier's experience in Montreal being refused apartments. Just because she had kids, that's illegal under Quebec's charter, but... Hard to prove, hard to enforce. Seems like it. And the book connects this to the disturbing reality of families with young children experiencing homelessness in Quebec. And it goes beyond families with kids. Racial discrimination, too. Absolutely. Absolutely. The book talks about the history, things like explicit racial zoning in Portland back in the day, unethical realtor practices, racist covenants written right into property B's, redlining, all things that systematically prevented racialized groups from buying homes in certain areas and building wealth. And that happened here in Canada too. Yes. Examples cited in West Vancouver, Grand Bend, Ontario. It's part of our history, too. And it has lasting impacts on inequality today, a really sobering reality check. Absolutely. A crucial part of the picture. Okay, what about newcomers? Refugees arriving in Canada. How does the housing crisis affect them? Calgary's experience is highlighted. When many Ukrainian evacuees arrived quickly, it put a real strain on rental housing and on people offering rooms in their homes. Questions came up about whether the federal financial support was enough. Right. And Afghan refugees in Calgary faced similar issues, high rents, even with assistance. Plus, difficulty finding jobs matching their skills, which makes affording housing even harder. Even with qualifications. Yeah. And interestingly, Calgary also saw record numbers of people moving from other provinces in 2022, drawn by relatively lower rents compared to, say... Toronto or Vancouver shows how interconnected it all is. Internal migration chasing affordability. And students are getting squeezed too. Quebec University. Definitely. Sherbrooke, Quebec City. Not enough dorm space, off-campus rents climbing. Makes it harder for students to just focus on their studies when they're struggling to find or afford a place to live. It affects everyone really. So amidst all these challenges, are there innovative solutions emerging? What does the book highlight? Quite a few interesting things globally. Singapore's system is unique, very government led, high homeownership, but mostly through long 99 year leases on public housing flats. HDB flats. Right, exactly. They have a compulsory savings plan people use for housing plus subsidies, and they build whole mixed income new towns with everything included. Very different approach. What about elsewhere? Key workers. London has examples. Subsidized flats for essential workers like teachers or nurses. Affordable rentals near major employment hubs like Canary Wharf. Government equity loan programs to help people buy. Trying to keep essential workers in the city. Makes sense. And new building tech. modular 3D printing. Yeah, modular housing built in factories, assembled on site is being used, like in Ireland for Ukrainian refugees, faster construction, there was even a modular high rise in Brooklyn, and 3D printed homes. That sounds futuristic. Maybe, but it's happening. Mexico, Kenya, partnerships building homes quickly and potentially much cheaper shows promise for speed and affordability. And closer to home, there's an indigenous-led project in Vancouver that's huge, isn't it? Yeah, the Squamish Nation's development. It's massive. About 6,000 homes plan on their ancestral land right near downtown Vancouver. Prime location. Absolutely. And they're planning density that goes way beyond the city's usual zoning rules. Plus, it operates under First Nation property tax jurisdiction. It's a really powerful project addressing past wrongs while building for the future and adding significant housing supply. That's truly inspiring. Okay, so wrapping up. Are policies starting to shift here in Canada? What's happening now or next? There are moves being made. B.C. brought in restrictions on short-term rentals starting 2024. The federal government is hinting at national rules, too, maybe denying tax deductions for rentals that don't comply with local rules. Okay, trying to level the playing field for long-term rentals. Seems like it. Ontario updated its definition of affordable housing for getting development incentives. Calgary's exploring converting empty office towers to apartments. Repurposing buildings. Right. And cities like Edmonton and Toronto are eliminating mandatory minimum parking requirements for new developments. Why does that matter? Building parking, especially underground, is super expensive. Removing that requirement can lower construction costs and free up space for more housing, encouraging density. I see. So lots of different pieces moving. Rethinking zoning, infill, aligning housing investment with immigration. Exactly. There's a growing call for federal housing investments to match our immigration targets, making sure we can actually house the newcomers we welcome. Affordable housing is crucial for successful integration. It really is. So it's clear from this deep dive, this housing crisis is incredibly complex. So many factors tangled together. And as we've heard, there's no single magic bullet. Definitely not. We've looked at history, international examples from Tokyo to Paris to Helsinki, different building methods, policy levers, community efforts. For you listening in, hoping to get that quick but thorough understanding, those aha moments, hopefully comparing all these different approaches help deliver that. Yeah. Understanding the pieces, zoning, finance, supply, social housing, discrimination. It's the first step, even if the solutions are complicated. Absolutely. And getting that deeper understanding of all these moving parts is vital if we want to push for effective change. Which leads us to a final thought, really a question for you to ponder.

We've discussed this huge range of strategies: 22:36

building more, building differently, financing innovatively, policy interventions like Housing First or zoning reform. If you had to pick just one change, one single thing that, if implemented broadly across Canada, you think would make the biggest positive difference to housing affordability, what would it be? And why that particular change? Hmm. That's a tough one. Lots to think about there. Definitely something to keep exploring.