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November 17, 2021

The Pandemic Amplified the Existing Housing Crisis. All Levels of Government Need to Act.

Stock Image showing housing and question marks

By Neil Lovitt, Vice President, Planning and Economic Intelligence, Turner Drake & Partners

Evergreen is asking experts from the housing sector across Canada to share their experiences and highlight some key barriers to new housing supply.

The Housing Supply Challenge, delivered by Canada Mortgage and Housing Corporation, invites applicants to propose solutions that will reduce or remove barriers to new housing supply. Evergreen supports applicants of the Housing Supply Challenge by providing guidance, mentorship, and resources needed to develop and improve their submission.

Neil Lovitt, Vice President of Planning and Economic Intelligence at Turner Drake & Partners, studies infrastructure and non-market housing feasibility. He outlines the need for all levels of government to plan long-term but act immediately.

The Existing Crisis

The housing crisis in Canada isn’t specific to any one municipality. We’re seeing similar problems play out across the country, albeit with their own regional flavours. Simply put, in many cities, the number of new households (referring to the group of people that occupies a single dwelling unit) is quickly outpacing the number of new houses (referring to the actual physical structure).

Take Nova Scotia for example, where Turner Drake & Partners is based. The maritime province is impacted by things such as the decline in activity in the oil sector out west. Historically, there has been a trend of population migration from the Maritimes to Alberta, but between 2014 and 2021, migration from Nova Scotia to Alberta declined by 29%. Meanwhile, more people are moving to Nova Scotia from other provinces and countries, leading to a net population increase, without the new housing stock to keep up.

The Existing Barriers

How do we solve this problem? Fundamentally, it’s a question of increasing supply. Figuring out how to do that is a challenging question. It’s not that it’s impossible: obviously, new housing is built all the time. The challenge is the timeframe over which we need to do it and the pace in which we need to ramp it up. There are a number of issues that constrain our ability to really increase the rate at which we’re building new housing. In normal times, some of these constraints include trying to answer, What is the ease on the regulatory side? What are the barriers when applying for approval to build new projects? What are the areas in which new projects are permitted? What is the political attitude to new development?

Halifax, for example, is a pretty large municipality, amalgamated from a number of smaller ones in the late 90s. Part of the complication is that all these formerly separate municipalities have different policies that aren’t harmonized.

Until recently, most of Halifax’s development regulations originated as far back as the 1950s. It reflected a different set of social priorities. It was common for applications for new projects, especially urban redevelopment projects, to be fought in the court of public opinion, and ultimately decided on by councilors at a political level. This introduced a level of risk, because neither developers nor community members have a good idea of what can be built anywhere, because everything is decided on a case-by-case basis.

The result is lengthy and often contentious approval processes, where projects need to be revisited and redesigned. It was a huge barrier that slowed down any attempts to add density to existing communities. Within the last decade, we’ve seen Halifax slowly start to rehaul and re-imagine this regulatory regime, replacing it with a lot more clarity upfront about where things could be built, how tall buildings could be, what the design requirements would be, and just getting rid of a lot of regulations that maybe didn’t serve a purpose anymore. It’s been a long process and it’s still ongoing, but we have been starting to see some of the fruits of that.

Enter Covid

The Covid-19 pandemic has introduced all kinds of other challenges: How many firms and construction companies out there are able to deliver new projects? What is their staff capacity? How do Covid-induced supply chain issues stymie new construction?

We’ve seen labour disruptions due to lockdowns and other public health measures. Actual physical building materials, including locally produced wood, concrete, and steel, can still be subject to price pressures as a result of the broader supply chain. It’s become harder to secure the various components that go into a new housing project, and to secure them at prices that we were used to even a year ago. And so, solutions to the housing crisis must happen in tandem with the pandemic response.

Act Now, Act at Every Level

Governments, whether local, provincial, or federal, are starting to recognize that there’s a really big problem when it comes to new housing supply. I think it’s understandable that the first reaction to that problem would be to say, “We’ve got to get our heads wrapped around this issue so that we can start to solve it effectively.” But I think there’s a real danger in sticking exclusively to an approach of analysis, because we’ve dug ourselves into a pretty deep hole.

Solving the housing crisis will require long-term planning, but we need to see some immediate action happening in tandem. Let’s work on coming up with a 10-year plan, but let’s also get started on the easy things that we know are needed. Don’t let analysis stop you from taking critical first steps. Don’t let perfect be the enemy of good.

My overall perspective on this situation that we’re in as a country is that we need to have a much bigger reintroduction of non-market housing, such as social housing, government funded housing, and rent-geared-to-income housing. More market-rate housing certainly helps, but there are large segments of the population that are outside the limits of what the market can serve, and the level of need is most acute here. There’s no doubt in my mind that we could start building tons of non-market housing in any major community without worrying about overbuilding in the short-term, but none of that is going to happen without significant federal involvement.

We’ve witnessed how unforeseen crises like the pandemic can worsen existing problems. That’s why we have to act now. Many housing issues are not technically difficult or mysterious. It’s a political challenge. It’s a matter of being willing to spend the money that it takes to solve it. It’s an expensive problem to fix. But at this point, we have to.

As told to Evergreen

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