CityTalk Canada
CityTalk Canada
The Housing In Canada FAQ - part 2
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More smart, helpful answers to a wide variety of FAQs about the present and future of Canada's housing ecosystem...provided by many of the leading stakeholders attending CUI's Housing Future Summit in June 2026.
If you're planning to change your address this year, you'll want to hear what the experts are saying about your best options.
Join host and FAQ quizmaster Mary Rowe for another round.
The more we have this conversation, the more we find that we can be the nexus for organizations that are really good at investment, at business development, at housing development.
SPEAKER_02That's Pedro Barada, president and CEO of Habitat for Humanity Canada, addressing his colleagues, exhorting them, you could say, to keep talking about the solutions we need to solve the many challenges of Canada's housing crisis. I'm Mary Rowe of the Canadian Urban Institute, or CUI, and Pedro was one of the leading voices of the housing ecosystem that gathered at CUI's Housing Future Summit this past June. Around him were many of the country's largest real estate developers, financial institutions, government officials, and organizations like Pedro's focusing on affordable, supportive, non-market housing. Aside from encouraging the conversation about Canada's housing challenge, this event offered a unique opportunity to ask these experts and decision makers the kinds of questions that can help us all make smarter decisions, not only about our own housing needs, but those of our communities, coast to coast to coast. So, welcome to the second episode of City Talks Housing in Canada FAQ, with answers to the questions that affect all of us right here where we live. There's a note of impatience to that question, and that's fair. Because as we were reminded in that first FAQ episode that you will have just listened to, it's no secret that many other countries do much better than Canada on this challenge. We happen to have someone at the summit whose job it is, you could say, to answer that question. Matthew LeBerz is the chief economist and senior vice president of the Canadian Mortgage and Housing Corporation, or CMHC, which is one of the longtime linchpins of our housing continuum.
SPEAKER_01One of the great benefits and uh privilege of my job is actually to get a chance to tour Canada and speak to industry advocates, Canadians, people on the ground about housing. And every time people are more than happy to volunteer solutions, obviously, more housing, more affordable housing, more data, um reduce cost, less regulation, name it, right? If you look at it, there's one underlying general cause to all of those wants, and it's productivity. Believe it or not, our estimates are to the effect that we could actually build 300 to 400,000 home per year. And that's not rocket science. It's based on the resources we have right now and the productivity we have either in the best areas right now or the best productivity we had in the past 20 years or so. And yet we're still stuck around 250,000, 260,000 housing starts a year. You know, levels we've seen for the past 50 years. We need to change the way we build, but we're struggling to achieve it.
SPEAKER_12If we need to build homes more quickly in this country, what needs to change?
SPEAKER_01There's one very striking study that was done. McKinsey did a ranking of digitalization by industry. And construction came second last. Second last to what other industry that came actually last? Any guess? Hunting. Hunting and agriculture. Come on, I'm pretty sure we can do better, right? And so that begs the question: why don't we innovate more in housing? And that's the crux of the productivity problem, I think. The reality is the industry is extremely, extremely, extremely fragmented. So just yet a number, how many businesses are there of more than 500 employees? More than 500 employees residential construction in Canada. How many businesses? There's six across the whole country. The flip side is 70% are less than five. And just to put a picture in your mind, less than five is a dad, his kids, two or three of them show up in their pickup truck with their tools, right? There's no way these guys can innovate. There's no way these guys can accumulate the capital they need to do BIM or to do modern uh methods of construction or to do mass timber. There's no way. It's not possible. And now, no, the folks from not-for-profits are go, oh cool, we're being we're being safe for now. Uh it's all about the industry. Hold on a second. A big not-for-profit in Canada is about what, a thousand dollars. Like, I don't have actual data, it's more a hunch. In the Netherlands, the average not-for-profit housing associations is $10,000. And the big guys over there is $80,000. That scale.
SPEAKER_02Getting to that scale of not-for-profit housing in Canada is a huge challenge. But as you'll soon hear, there are organizations and projects readying for that level of growth. And though he works at the federal level, Matthew offered part of the answer to this FAQ.
SPEAKER_09What can municipal and city governments do to help encourage affordable housing in our communities?
SPEAKER_01The other big impediment to productivity, other than scale and incapacity to invest and incapacity to adopt innovation and housing that I see and I hear a lot on the ground is about taxation and regulation. We've done some work on development charges. If we were to eliminate development charges in Toronto and Vancouver, it would make overnight 10% more viable projects. In Toronto, that would mean eliminating half of the supply gap estimate we have to recover affordability from pre-pandemic. So this is significant. This is a significant burden. And obviously that leads to unaffordability because costs are passed on, because lack of scale and lack of productivity mean that we're less effective in building, that we're not as fast, that we can't adopt the more modern ways of building. And so the risk is we have now pent-up demand being built in the system. Since 2001, the number of independent households formation has been decreasing and decreasing and decreasing in every census. I expect it to be accelerating, the decrease to be accelerating in the 2026 census that's being that's being run right now. At the same time, the number of doubled-up households and youth staying at home has consistently increased as well. So for those who look at the market right now and say it's pretty much subdued, there is demand coming on the line. And to those who look at this like me and say, oh, we need to have the right supply when that happens. My point here is if we don't start now, what we need to do in order to respond to that increased demand two, three years down the road because it takes so long to deliver large housing projects, we'll lose the progress we did on affordable tea since 2023. So what do we do about it? Um start consolidation of the industry. We need to start it now so that we are not stuck in that circle of always trying to fix the crisis of the day and we can fix the housing crisis for good. Um, lower taxation and regulation, and actually it doesn't mean having no regulation or no taxation, but being conscious about having the right tax mix. And finally, be mindful of interventions. When putting something forward meaning good, asking what unforeseen consequences can we create down the road that we'll have we may have to live with going forward.
SPEAKER_02I'm with Matthew on that roadmap, though fixing the housing challenge once and for all is a tall order for this ecosystem. However, making smarter, future-proof decisions in both business and government relies heavily on a resource that's much easier to come by now. Fresh data and lots of it. Sean Cathcart is the senior economist and director of housing data and market analysis for the Canadian Real Estate Association. And this question is right up his driveway.
SPEAKER_04What kind of data do we have on the housing market and what's it telling us?
SPEAKER_00One of the data sources I really like to look at uh when I'm trying to get a gauge on the existing home market is like a micro subset of the existing housing stock, the evolution of our housing stock over the last 25 years. You know, the missing middle has been the missing middle forever. Semis, townhomes, 10% of completions 25 years ago, 10% now. But 25 years ago, like this the detached house, the single detached house, still dominated. Over 60% of completions, World War II, right up until about the turn of you know this century. And then what happens from there is it starts to trail down. We obviously can't build the way we did in 1965. Uh, fair enough. And we were supposed to transition into other family-friendly types of housing that would be on a third or a quarter of as much land. That's what medium density is. Instead, we transitioned right through to high density to the point that uh apartment units, whether rental or condo, have gone from 10% of the market 25 years ago to over 70 today. And in the pipeline, under construction units, 85% are apartment units. So what we've effectively done is um transitioned from family-friendly housing to housing that's not so family-friendly. And the impact in the uh the resale market, we've watched this for the last 15 years, outwards from Toronto, bidding wars, and prices go through the roof, year after year after year, going from where houses in many markets in Canada were you could be bought for a hundred and something thousand dollars, that are all now over 400. There's three left that haven't quite done that full transition yet. It's uh Thunder Bay, Sudbury, and St. John's Newfoundland. And they're all in the process of doing that right now. And after that, there's nothing left that's going to be affordable in Canada for something that's family friendly. Because all of those detached houses, it's not that the houses doubled in price, it's that the land that they sit on quadrupled in price. And so if you're buying that package deal, it might look like a starter home from the road, right? But you know, that's only 20% of the value that you have to pay to acquire that property. So it's no surprise that people, young household formation that want to start families will go somewhere else. But at this point, there's nowhere left to go except south, where there's a lot of affordable housing. Uh people with graduate degrees, STEM, entrepreneurs are already leaving for the United States in record numbers with Donald Trump still in the White House. So that's a major challenge coming as well.
SPEAKER_02Building a bigger, healthier housing ecosystem is the top priority of this conversation. But that ecosystem also needs to play well and play smart with other systems like public transit. Andrea Nepton is the CEO of the Canadian Alliance for Transit Connected Housing, or CATCH. And she and her organization are at work, notably in Hamilton, Ontario, to answer this FAQ.
SPEAKER_13Why is it so hard to find affordable housing along public transit roads? We've been working, as you mentioned, on a solution in Hamilton around transit-oriented affordable housing. Because I think the the Main Street's report just came out that there's a potential 4.4 million homes near transit if we actually create the alignment. So these are actually connected houses that are where the people can be part of a community and they can reach, we know that they can have increased access to employment, to services, and to green spaces in terms of transit-oriented connected communities. But when we invest in transit, the housing prices go up. Property values increase in general. Not always, but if we we do actually are able to sort of bring the prosperity of these communities that are generally filled with higher proportions of people in core housing need. In Hamilton, it was one-third of the population in core housing need lived along the transit line, live along the transit line. And those folks were going to be actually pushed out because the amount of naturally occurring affordable housing decreases when we build transit along those lines. And that's because there's nobody who's actually in charge of it. It's just a misalignment. It's a systems glitch. So we started a collaborative approach with the city and the community foundation, the housing providers, and other actors. It was supported by the CMHC. Thank you very much. And we've now created a blended capital fund that is able to provide the needed capital for non-market housing providers to be able to maintain, acquire, and develop housing along transit lines. This is a pilot in Hamilton, but it actually has a capacity to grow so that when we are intentionally developing transit, we can make sure that those communities that are inclusive, prosperous, and connected.
SPEAKER_02Difficult to avoid the primary engine that powers this conversation, capital, in all its financial and investment models. For example, Jude Tersigny, the senior VP of Planning and Development at Manke's Developments, has more to add to the topic Mathieu Laberg addressed earlier.
SPEAKER_09What can municipal and city governments do to help encourage affordable housing in our communities?
SPEAKER_06In the city of Toronto, even before we have an opportunity to even bring the Tonka trucks out there to start actually building something, we're out $180,000 for a development charge. And I don't know if the regular folk that are not in our industry really have an appreciation for that amount of capital that's required on the onset. And in addition to that, before that, there's a there's there's a significant amount of soft costs that go into the approval of a project that um that bear on the project's viability in the long term. And I think that's really important to understand the scale in which we were working on in and the significance of the dollar values that were being considered. The reality is the economics for the traditional condo model are broken. They don't work. And a lot of our colleagues are pivoting to rental, and as are we, but there's also a much larger, I guess, equity uh requirement to make those projects work. And that's where the equity gap is. And we're seeing the effectiveness of several programs uh out there, but the reality is each individual program is not hitting the mark. The programs are working when we're stacking programs on top of one another. So we have CMHC programs, we have the City of Toronto's uh purpose-built housing grant program, we have a number of programs that we're stacking on top of each other to actually make uh the economics work.
SPEAKER_02One key aspect of those economics is also, depending on who you ask, the elephant in the room. The Canadian Human Rights Commission declares that financialization treats housing like a financial asset and a tool for investor profits instead of a fundamental human right for everyone. So we asked Andrea Nempton to answer this very direct question.
SPEAKER_08If most everyone investing in the housing system needs a big return on their investment, how can costs realistically go down?
SPEAKER_13Well, I think it depends on which problem you're trying to solve. Right? If you're trying to solve the fact that builders can't make a living, or that investors can't make enough profit, or that we don't have enough more beyond 70% condos or increase the production of condos, those all have different levers. You know, for me, I was did look very closely into financialization of housing, and we've done a full report on it. And so my focus is really around increasing the capital flow to non-market housing providers so that they can scale. And they need to do it with for-profit developers and builders, but they actually need to own those properties and the federal government at the federal level to think about decentralization in terms of decision making and to start to seed larger investment funds that can actually invest in non-market housing outside of the federal system and alongside the federal system. So whether it's new market or habitat for humanity or catch or tapestry or the many financial instruments that are working, or Aboriginal housing, they need seed capital so that they can grow to the billions of dollars so they can attract other capital. This has happened in the States with their bonds, it happens in Australia, Denmark, all over there are blended capital funds that are very large-scale demonstrations in that. So at the federal government, that would be the one piece. Decentralized, don't you can't have one office in Ottawa making all the decisions for 400 million units. And affordable housing has to happen. The smaller it is, the more impactful it is. Scaled affordable housing creates ghettos. We need to really question this. And then the cities we've been working with: Hamilton, Saskatoon, Edmonton, Calgary, Montreal. We're finding that the cities are very uh open to wanting to work in different ways, but you do have to find the heroes.
SPEAKER_02I'm Mary Rowe, and you're in the middle of Housing in Canada FAQ Episode 2, brought to you by CUI, the Canadian Urban Institute, as part of our City Talk program. FYI or BTW, there'll be another episode of this series coming soon featuring top-door answers from Canada's Federal Minister of Housing and Infrastructure, Gregor Robertson. Prior to becoming federal minister, Gregor uh served as the mayor of Vancouver, British Columbia, home to some of the most innovative solutions in not-for-profit and other non-market housing, which is what the rest of this episode QA will explore. You've heard many references already to the impressive scale and progress made by other countries in this area. CUI's Housing Future Summit invited Petra Kurosek, an economist with the United Nations Human Settlements Program here in Canada, UN Habitat, to respond to questions just like this one.
SPEAKER_11What allows other countries to be successful in developing affordable housing?
SPEAKER_07One of the key concepts that we're using for in our approach is adequate housing, which of which affordable housing is part of. There is a seven con seven sides to the concept that we're trying to kind of broaden the approach to housing. Other concepts are uh security of the tenure, location that is very important where it is, not just whether it's affordable, of course, culture adequacy and and so on and so forth, but adequate housing is more the term that we we like to use because we find it that it's capturing uh a bit more dimension than just the affordability that we know it's it's kind of a challenge. Use housing as much as we can to allow people to meaningfully participate in the society on the long term and and help with sort of an inclusive development of the whole society from that angle.
SPEAKER_02One of Canada's longtime components of non-market housing is the one most people are aware of.
SPEAKER_12I'm interested in the co-op housing model, but waiting lists are long. Will there be more co-ops available anytime soon?
SPEAKER_02You'll find one or more co-ops in urban and rural communities across the country, and they've been actively focused on growth, according to Dallas Alderson, Director of Public Affairs and Policy for the Cooperative Housing Federation of Canada.
SPEAKER_10To help answer the question, I'll just uh step back just a couple years. In 2024, the cooperative housing development program was launched as part of the National Housing Strategy. So this was the first dedicated federal program to support co-op development in over 30 years. And, you know, it was catalytic for co-ops, right? It really enabled co-ops that wanted to grow, groups that wanted to develop co-op housing. And everyone was very excited about this, right? There was so much pent-up demand. There hadn't been, as I said, a co-op uh program for a very long time. And so what's happened now is that uh demand greatly exceeds uh the program funding envelope. So my organization, the Cooperative Housing Federation of Canada, uh, has been supporting proponents, and now we have this very robust cross-Canada pipeline of projects at scale that are ready to go, but um, you know, but the program dollars don't match the pipeline. So, you know, we need long-term and predictable financing and funding so that pipeline doesn't start to drop off, right? These are projects that have put pre-development uh money into uh what they what they needed to be part of the pipeline. They've they've secured, as I said, other sources of funds uh uh conditional and moving forward, but it doesn't last forever. So it it really is, you know, what what piece uh can offer predictability so that this pipeline can move forward. And from the sector side, you know, we're really committed to to both scale and aggregation in a way that enables future capital formation over time, too, right? Like this is a long-term piece. Um, and there's lots of interesting ways from the co-op perspective to do that while still retaining uh core elements of the co-op identity, right? Whether that's governance, the community piece, uh certainly security and affordability. So we can do all those things, but the predictability and the long term of funding and financing, you know, along with workable uh guarantees and security requirements, you know, that's what's needed to move the pipeline along.
SPEAKER_02One of the best known players in the not-for-profit housing sector in Canada is Habitat for Humanity, which has chapters across the country. The national one is run by Pedro Barada, who led off this FAQ episode. His organization is on a parallel track, as Dallas's call-ups are, in addressing this increasingly popular question.
SPEAKER_11Are there more affordable homes coming and when will they be ready?
SPEAKER_04I think that what we need to do is to find that within the not-for-profit sector, to go from one project at a time to building strong institutions, strong organizations that can aggregate a bunch of projects and can reach the scale that's required for us, of course, with seat funding and support and de-risking and guarantees from the federal government, for us to go and match up with some of that patient, mission-aligned capital that's been waiting, that's asking for product and instruments, and that now we have an opportunity to capitalize on. We are going through the change management that's required on the not-for-profit sector to position ourselves to have that value proposition. Now that Build Canada Homes has flicked a switch on the Crown Corporation, there's a huge opportunity for us to think differently, act differently, and start to think about moving beyond the two to three percent that not-for-profits currently occupy in terms of the whole housing scale. We need to double that, and we have an opportunity to do it.
SPEAKER_02But if the not-for-profit sector is going to scale up substantially in the near future, it'll need to address another of the impediments to productivity that Mathieu identified earlier: innovation in construction.
SPEAKER_12Given all the public/slash private partnerships in housing development, are there more sustainable green building projects in the works?
SPEAKER_02For his part, Jeremy Reeds, the CEO of Windmill Developments, can speak to his non-market projects and how they align with those of his colleagues.
SPEAKER_03Coming back to that aspect of scale and I think the financial certainty side of it of if you have a pipeline and you have 2,000 plus units that you're ready to go on, having the certainty of that you're going to have the different financial components ready to go for it is going to be the aspect for that long-term scaling and for costs to continue to come down. So for us, we've been working very closely in the modern method of construction space. And for us, have a strong belief in off-site mass timber CLT construction. And for that to happen, you need a manufacturing industry. It needs a commitment of a pipeline. And we truly believe that like that compounding efficiency of having a certainty that your projects are going to go allows a manufacturing capacity to scale. And as that manufacturing capacity scales and gets to efficiency, that's when you truly start to see costs come down. And you can work through uh your repeatability of it, you can work through your front-end costs quicker and get to project completion faster with more certainty. And the more you push for that, the more de-risk and the less uh additional costs you're starting to occur in those scenarios.
SPEAKER_02Final FAQ in this episode is actually one of mine. And I got to ask it of another special attendee at CUI's Housing Future Summit. Colleen Volk is the president and CEO of CMHC, and as such, one of the folks playing an outsized role in the present and future of housing development in our ecosystem. I asked her, if you had a magic wand, what would you do with it?
SPEAKER_05Oh, that's a good question. I was gonna give you some things that I that I would like to see the industry do. That's fine. You can tell other people to go ahead. You can tell other people. Um nonprofits of scale. If there was a way to bring nonprofits up to scale, because that that seems to be a real key ingredient in some of the really interesting international models that we look at is they have nonprofits that operate at scale. Yeah. Um that would be one. Um what would I like to see MHT to do if I had a magic wand? I would um no, I think we have very enabling legislation. We have the only thing I would wish is that we'd just have more money to do it with, right? Like it's it is, as I say, the the resources that we get from government are limited. Our job is to make them go the farthest. And you know, with the best projects, the best outcomes, we do that. Um and to do more, we would need more money.
SPEAKER_02Plenty more money-related questions coming in the third and final episode of the Housing in Canada FAQ series here on Citytalk, including some for Colleen's boss, the Minister of Housing, Gregor Robertson. This podcast was produced for CUI by Andre Lariviere at Purple Pro Solutions. I'm Mary Rowe. Thanks for listening.
