Housing Affordability
UPDATED May 15, 2023 @ 1:50pm
Table of Contents
Introduction
This election, Generation Squeeze is rigorously assessing Alberta provincial party platforms and commitments on five key issues: investing fairly in all generations, investing in wellbeing (not just medical care), housing affordability, family affordability, and climate justice.
Our mission: to help voters better understand how far each party's platform goes towards actually solving big problems facing Albertans, and how these problems help prop up a broken generational system.
Gen Squeeze does not tell you who to vote for, and we don’t aim to portray any party in a favourable or unfavorable light. Our goal is to help voters be as informed as possible about the positions of all of the parties on big issues for generational fairness in Alberta. Learn more about our methodology and commitments to non-partisan and evidence-based analysis
One key symptom of generational unfairness is the growing gap between home prices and earnings. Our analysis of housing commitments in party platforms assesses the degree to which the UCP and Alberta NDP are acting on the 14 actions to restore and protect housing affordability forever, identified in our comprehensive policy solutions framework. This framework was created by Generation Squeeze and a coalition of academic and community experts.
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Punchlines
The study investigates two questions: First, is any party promising enough to end the housing affordability crisis? Second, which platform aligns more with the evidence about what is required to restore affordability? Our analysis digs into the strengths and weaknesses of the United Conservative and New Democrat party platforms to answer both questions.
Affordability is top of mind — but housing is largely absent
Half way through the Alberta election, both the UCP and NDP are surprisingly weak on housing — at a time when this major cost of living is increasing affordability pressures for many Albertans.
Generation Squeeze and a coalition of academic and community experts produced a comprehensive policy framework to fix the housing system. This framework points to 14 evidence-based actions needed to restore and protect housing affordability.
Both the UCP and the NDP fall well short of addressing all 14 actions. Our analysis of party platforms to date awards the UCP a score of just 0.5/14 — the party is effectively stuck at the starting line on housing. The NDP are better, but still promise to implement just one-third (4.5/14) of the policy changes needed.
No party is working to protect Alberta’s housing advantage
It now requires 10 years of full-time work for a typical young Albertan to save a 20% down payment. This represents a significant deterioration by comparison with when Baby Boomers started out as young adults in Alberta, when it took only 6 years of work to save an equivalent down payment.
While recent deterioration is cause for concern, Alberta is still a leader in Canada on housing affordability, given the far more rapid escalation of home prices in other jurisdictions. Young adults in Ontario and BC must now work 22 years to save a down payment — a dozen more years than in Alberta.
The fact that hard work still pays off more in Alberta is a major economic advantage that will attract workers and investment. Yet in this election, neither party is proposing to nurture and protect this advantage by designing deliberate policies to fend off factors that have drastically eroded affordability in Ontario and BC.
Diversifying Alberta’s economy is important — but shouldn’t rely on real estate
Both the UCP and the NDP emphasize economic diversification, to shift Alberta’s economy from its reliance on fossil fuels. So far, neither party singles out real estate as a sector that should drive more economic growth. Let’s hope this continues.
The rest of Canada knows from experience that relying on real estate to grow GDP means growing the major cost of living — housing — resulting in crushing unaffordability for many younger people, newcomers, and renters of any age. At the same time, real estate doesn’t tend to generate jobs at a rate that helps ensure local earnings keep pace with rising prices, especially in urban centres. Despite contributing 13% to Canada’s GDP, fewer than 2% of Canadians (and Albertans) make their living in the real estate sector. Nationally, no other industrial sector has such a big gap between its share of GDP and its share of employment.
Although their housing specific-policy is weak, kudos to both the UCP and Alberta NDP for proposing economic strategies that rely on industries other than real estate to drive prosperity. This overarching policy orientation is necessary to fend off the addiction to high and rising home prices that has taken stronger root in BC and Ontario.
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Summary score table
The table below summarizes scores for the United Conservative and New Democrat parties on each of the 14 housing affordability criteria. We welcome feedback from parties, including concerns that we may have misinterpreted elements of their platforms when assigning our scores. We commit to revising our scores in light of party evidence that their platforms or other election documents include commitments that align with the evaluation criteria.
Housing Affordability Criteria
Party Scores
Detailed commentary
CLEAR GOALS AND PRINCIPLES
Criterion 1: Do the platforms embrace the goal that all Albertans should be able to afford a good home by 2030?
In the National Housing Strategy, the arms-length Canada Mortgage and Housing Corporation commits to the goal that “By 2030, everyone in Canada has a home that they can afford and that meets their needs." Gen Squeeze has put this goal at the centre of our Housing Policy Solutions Framework. We believe parties should adopt this, or a similarly clear and ambitious goal.
UCP: The UCP platform includes no mention of this goal in the 2023 Alberta Budget, or in any election platform materials — even though Statistics Canada data show that 10% of Albertans (or approximately 46,000) are in core housing need. It is noteworthy that the UCP election website does not mention housing as an issue area among the 27 themes that it identifies for its platform. See https://www.unitedconservative.ca/ucp-platform-2023/ For this reason we subtract a point. We would return the lost point, and award a full point if/when the UCP platform includes language adopting the 2030 goal.
NDP: The NDP promises to “act so all Albertans can have a safe place to call home and have the support they need to live a healthy and dignified life” (https://www.albertandp.ca/affordable-housing). This language aligns with the goal for the National Housing Strategy, but omits the 2030 timeline.
In this announcement, the NDP platform also promises to “house another 40,000 Albertans within the next five years.” If accomplished, this goal would put the province well on track to eliminate core housing need by 2030.
We therefore award the NDP half a point for this criterion. We would award a full point if/when the NDP platform includes language specifically adopting the 2030 goal.
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Criterion 2: Do the platforms commit to the principle that home prices stall so earnings catch up?
The widening gap between home prices and local earnings necessitates that home prices at least stall — or maybe fall — since restoring affordability means that a good home (whether in rental, co-op or ownership) needs to be in reach of what hard work can earn.
Neither the UCP or NDP platforms reference this principle, despite the growing gap between home prices and earnings in Alberta. While Alberta has, so far, retained greater housing affordability than BC and Ontario, this has been by chance — when it should be by design.
No points are awarded.
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Criterion 3: Do the platforms commit to the principle that housing is a human right?
One of the basic human rights is the right to adequate housing and shelter, recognized in the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, and in Canada’s own legislated National Housing Strategy.
UCP: There is no mention of housing as a human right in the 2023 Budget, or UCP election materials.
The UCP’s 2023 budget mentions the phrase “human rights” once in reference to the budget allocation for “Alberta Human Rights.” By contrast, “mineral rights” are referred to 7 times. We award no point for this criterion.
NDP: The NDP affordable housing plan, Every Albertan Deserves A Home, states: “The Alberta NDP recognizes access to housing is a human right and is committed to making important investments into affordable housing.” We award the NDP a full point on this criterion.
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Criterion 4: Do the platforms commit to the principle that we should prioritize housing for Homes First, Investments Second?
Homes First, Investments Second means treating housing and residential land as a place to call home, not a way to get rich. The bottom line is that we cannot make housing more affordable while at the same time encouraging home values to increase (faster than local earnings) — which is what people want when they make an ‘investment’. Policymakers need to prioritize housing for homes first, investments second.
Neither the UCP or NDP platforms reference this principle. No points are awarded.
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Criterion 5: Do the platforms commit to the principle that our housing system should make room for everyone?
This criterion reflects the principle that housing policy should be created with the intent of welcoming a diversity of people, incomes, quality housing forms, and tenures into all of our neighbourhoods and communities. This principle discourages NIMBY’ism (Not In MY Back Yard).
Neither the UCP nor NDP platforms reference this principle. No points are awarded.
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SCALE UP NON-MARKET HOUSING
Criterion 6: Do the platforms protect and upgrade existing non-market homes?
This criterion includes investments in necessary repairs to existing below-market housing, as well as accessibility and climate upgrades.
UCP: The UCP platform and 2023 budget do not mention the objective of protecting non-market housing. Housing accounts for less than 2% of the capital investment in the 2023 Budget. No points are awarded.
NDP: On April 12, 2023, the Alberta NDP released Every Albertan Deserves A Home, outlining a range of actions “to tackle the immense housing challenges facing Alberta communities today.” Although this plan commits to adding new affordable housing units (see criterion 7 below), it is silent on protecting and/or upgrading the stock of existing non-market homes. No points are awarded.
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Criterion 7: Do the platforms create new non-market homes?
This criterion includes the entire spectrum of non-market housing — shelters, transitional and social housing — plus a range of rental, co-op and ownership options for low- and middle-income earners. Actions to expand non-market housing can include purpose-built construction, donated lands, providing loans and capital, adopting inclusionary zoning, and incentives or programs to convert existing market housing to non-market tenure.
UCP: The UCP platform and 2023 budget do not mention the objective of protecting non-market housing. Housing accounts for less than 2% of the capital investment in the 2023 Budget. No points are awarded.
NDP: On April 12, 2023, the Alberta NDP released Every Albertan Deserves A Home, outlining a range of actions “to tackle the immense housing challenges facing Alberta communities today.” The plan commits to “housing another 40,000 Albertans within the next five years.” It also proposes to build more than 8,500 affordable housing units for “Albertans in need” with an investment that is “the largest in Alberta’s history.” These units are expected to require $1.5 billion in provincial investment — with the expectation of leveraging another $2.6 billion in funding from other levels of government and housing providers.
If successful, these affordable housing measures would be a significant step up for non-market housing in Alberta. Housing an additional 40,000 Albertans would be nearly enough to lift most people out of core housing need. We award a half point for this criterion, waiting for additional detail to understand how the 8,500 new units (together with rental assistance announcements we consider below) represent enough social housing to achieve the Alberta NDP goal of housing an additional 40,000.
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Criterion 8: Do the platforms create new strategies to serve the most vulnerable?
Specific housing options may be required to adequately meet the needs of some groups who are socially and/or economically marginalized. This criterion includes housing for people who are homeless or at-risk of homelessness, shelter options for women and families escaping violence, and supportive housing for those with mental health or addictions issues. Also included in this criterion is housing for Indigenous people.
UCP: The UCP’s 2023 Alberta Budget (p. 86) allocates $105 million over three years to reduce homelessness. The capital plan (p. 116) includes $54 million over three years for Indigenous housing. However, there is no mention of specific targets — in terms of supporting people, building new housing or shelter units, etc. Half a point is awarded.
NDP: NDP platform commitments will house another 40,000 in the next five years, promising to focus on those most vulnerable:
“An NDP Government will focus on housing the people with the deepest need, including Albertans with disabilities, families fleeing domestic violence, and those experiencing homelessness. We will also expand mental health support and provide stable, predictable funding to shelters and agencies.
We will collaborate with Indigenous peoples and invest in more housing under a new Indigenous Housing Strategy.
We will also begin the hard work of reforming income support and rental supplement programs to ensure Albertans never have to choose between paying the rent and buying groceries.”
The plan also speaks to the need for action to address homelessness, including “increasing capital support building 2,000 more units for Albertans with the deepest housing need” with an investment of $470 million over five years. As well, it references the need to provide housing for Albertans with specific needs and historical experiences, including people with disabilities, seniors, women fleeing violence, Indigenous people and newcomers to the province.
We award 1 point for this criterion, while still welcoming more detailed plans on how the party will meet this commitment.
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FIX THE REGULAR MARKET
Criterion 9: Do the platforms commit to dialing down harmful demand?
This criterion includes harmful demand from what Gen Squeeze often refers to as the ‘easy villains’ in the housing market — money launderers, speculators, foreign buyers, tax cheats, house flippers, shady real estate agents, and short-term rental operators.
Both the UCP platform (and budget) and the NDP platform are silent about foreign buying, empty homes, money laundering, short-term rentals, speculative investment in real estate and other examples of harmful demand. In keeping with the wisdom that “an ounce of prevention is worth a pound of cure,” these ideas merit serious attention in Alberta to help fend off examples of harmful demand that risk propelling provincial housing prices higher than they already are. No points are awarded.
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Criterion 10: Do the platforms commit to dialing up the right kind of supply?
This criterion includes efforts to increase housing supply in ways that combat sprawl, and encourage density and mixed-use in urban land already reserved for residences (protecting land required for industry, farming and green-space). It also includes an emphasis on protecting and stabilizing the existing supply of affordable homes by adding so-called ‘missing middle’ housing, family-sized units, and purpose-built rental; and efforts to incorporate low/zero-emission goals into supply-side housing policy.
Both the UCP platform (and budget) and the NDP platform are silent about the need to support all communities to produce rigorous housing needs assessments that position them to plan effectively to open up low-density and discriminatory zoning for a diversity of people, families, forms and tenures (including lots of rental). There also is no mention of encouraging new builds to integrate energy efficiency objectives so that our efforts to reduce housing unaffordability and extreme weather work hand in hand. No points are awarded.
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Criterion 11: Do the platforms dial up protections for renters?
This criterion includes protecting existing affordable rental units as more rental units are built, mandating rental building replacement upon redevelopment, and tenant protection and assistance policies — balanced with landlord and developer needs. Protecting rental options is growing in importance, as rising home prices push home ownership out of reach for many younger people, newcomers of any age, and the 20% of seniors who are renters.
The UCP budget and platform is silent about protections for renters and rental housing.
The NDP promises to review rental legislation in Alberta, committing to explore the value of rental protections being implemented in other jurisdictions across Canada. While this review is underway, the party will expand rental assistance for another 11,000 low-income households, and establish a rent bank to help low and moderate-income households pay rent after a sudden disruption to income due to job loss, marriage breakdown, etc. We award half a point.
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BREAK THE ADDICTION TO HIGH HOME VALUES
Criterion 12: Do the platforms propose to rely less on real estate to drive economic growth?
Real estate, rental and leasing represents the largest contributor to Canada’s Gross Domestic Product (GDP) at 13%. This industrial sector is bigger than manufacturing; bigger than mining, oil and gas; bigger than construction; bigger than health care; bigger than financial services; bigger than professional, scientific and technical services; and so on. Real estate has also grown as a share of GDP in all provinces over the last two decades, and often has been the fastest growing part of provincial economies.
Anchoring our economic growth on real estate would be a fine economic strategy — if Canada was also generating a large portion of its employment in this same industrial sector. But we don’t. Canadians find less than 2% of employment in the real estate sector. No other industrial sector has such a big gap between its share of GDP and its share of employment.
This is a problem. It signals that Canadians have been growing our economy by increasing the major cost of living, and without generating jobs in that industrial sector in numbers sufficient to ensure that local earnings keep pace, especially in urban centres. The 2% who find employment in real estate generally attract high incomes. Existing property owners, gain housing wealth, which will propel our spending and consumption, and drive up GDP. It’s one way to grow an economy — but it’s not a good way if we prioritize hard work paying off for younger people and newcomers to Canada. Paying off in terms of generating earnings that can cover their primary cost of living — housing.
Real estate, rental and leasing represent 11% of the Alberta economy’s GDP. This is a strength, because it is below the national average of 13%, and well below the 19% of GDP represented by real estate in BC. By contrast, oil, mining and gas represent 27% of Alberta GDP, well above the 8% average in Canada overall.
Given Alberta’s heavy reliance on oil, mining and gas, the UCP’s 2023 budget articulates a strong commitment to diversify the provincial economy, with an emphasis on “investments in emerging industries such as tech and aviation” (p. 37). Since the budget emphasizes this diversification, without relying on growth in real estate, we award a full point for this criterion.
“Economic diversification” is also a priority for the NDP with “targeted grants for small business to set up shop downtown, reinstating the Alberta Investor Tax Credit and the Interactive Digital Media Tax Credit.” As we do with the UCP, we award a full point for this criterion to the NDP.
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Criterion 13: Do the platforms support increasing taxes on housing wealth, and lowering taxes on income?
One key reason Canada is addicted to high home values is our relatively low taxation of residential property wealth. In the context of runaway prices, the home ownership tax shelter inflates demand and average costs, contributes to inequalities and unaffordability, and makes homeowners increasingly dependent on high and rising values. Canadians need a #TaxShift. This means that our political parties should commit to raising taxes on housing wealth, which will allow us to depend less on income taxes –especially income taxes on lower and middle-earners, and renters.
Neither the UCP or NDP platforms mention a tax shift in the platform materials. No points are awarded.
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Criterion 14: Do the platforms propose to reduce the collateral damage from the cheap credit system?
Statistics Canada underestimates the contribution of rising home prices to inflation. The Bank of Canada uses this (inaccurate) inflation signal to guide decisions on interest rates — keeping them at historic low levels because inflation is reported to be modest. Low interest rates decrease the cost of taking on a larger mortgage. Buyers who are able to borrow more bid up home prices. Rising prices aren’t adequately captured by Statistics Canada in inflation data… and there’s your feedback loop, sustaining the cheap credit system and growing the gap between home prices and earnings.
Neither the UCP nor the NDP call on Statistics Canada to improve its measurement of housing inflation in order to improve the monetary policy signals given to the Bank of Canada. No points are awarded.
