Why we wrote this report
A federal election is looming in Canada and affordability is top-of-mind for a majority of Canadians, including younger ones. The path to restoring housing affordability is complex and will involve many policy levers, including measures tailored to specific specific places and conditions. But experts in the academy and the community know enough now to recommend some key principles to guide federal parties as they craft housing policy to include in their election platforms. These recommendations are the basis of the following report, A Housing Policy Framework and Policy Options for the 2019 Federal Election.
This is a critical time for leadership from the future Government of Canada. Important steps have been taken to address housing affordability and they're having an impact. Research released by Gen Squeeze in June 2019, however, shows the gap between what it costs to buy a home in Canada and the ability of younger Canadians to afford it is still massive. [Read Straddling the Gap: A troubling portrait of home prices, earnings and affordability for younger Canadians]
In the lead-up to the fall federal election, all parties need to commit to bold action that builds on some of the progress that's emerged in the past couple of years. Now is not the time to slow down efforts to modernize Canada’s housing market by simply hoping the massive gap between home prices and local earnings will resolve itself.
The good news is that Gen Squeeze and others have clear recommendations for how to tackle housing affordability in Canada.
Generation Squeeze is calling on all federal parties to adopt these principles in advance of a fall federal election, to demonstrate each party’s commitment to taking meaningful action on housing affordability. Here are the four foundational commitments:
1. National Housing Strategy — Phase II
The current National Housing Strategy (“NHS”) is largely a social housing strategy aimed at serving 530,000 of the most vulnerable Canadians. It's laudable and should be strengthened. But it leaves many Canadians out, including an additional ~1.2 million people estimated to be in core housing need, many of whom earn decent incomes but find themselves priced out of their own community. A second phase of the NHS must be launched to ensure ALL Canadians can afford a good home — whether renting or owning — by addressing failures in the broader housing market.
2. CMHC's 2030 Goal
Strong policy flows from clear goals. The Canada Mortgage and Housing Corporation (CMHC) has adopted a goal that “By 2030, everyone in Canada has a home that they can afford and that meets their needs.” This is the right goal. It balances ambition with specificity, and has the credibility of being associated with Canada's national housing agency.
3. Guiding Principle of Homes First
To achieve that 2030 goal, we must fundamentally shift how we treat housing and residential land. We need to share it more equally, making room for a diversity of people and housing. We need to protect it for locals, and against egregious uses by money launderers, cheats, speculators, and those parking money in empty homes. Going forward, federal policy shouldn’t encourage owners to expect more wealth from the sale of their home than they put in through principal payments and home renovations, plus inflation. We shouldn’t encourage landlords to expect more income than is warranted by the total cost and ongoing labour of providing a rental home. All federal housing policy should flow from a principle of Homes First: treating housing as a place to call home, for all Canadians.
4. Comprehensive — Not Partial — Action
Affordability can be attained through higher earnings and/or lower costs. But, because it's not realistic to expect Canadians' earnings to shoot up, we need a comprehensive set of policies to carefully rein in costs. Partial solutions — like only focusing on supply — can actually make things worse. To be credible, parties' housing plans must address supply, demand, and underlying wealth inequalities in the broader housing market, while simultaneously scaling up the stock of social and community housing. Platforms should also seek to collect better data and to de-risk the market against a decline in prices.
Putting the principles into action
More important than any one policy is a strong framework that holds them together. Here's a framework parties can adapt as they create their own housing plans.
How you can use this report
Gen Squeeze has created a handy 2-pager that outlines these four recommendations and some other ideas for parties to include in their housing plans. What can you do with it?
- Read it! And then tell hopeful decision makers that these are the commitments you want them to make to address housing affordability for younger Canadians.
- Share it! With friends, family, colleagues, but most importantly, your local candidates. We all understand there's a problem; now we need to amplify the solutions.
- Sign it! Our petition calls on all parties to adopt a guiding principle of Homes First: because housing should be a place to call home, not a way to get rich.