Housing Crisis Digest #5
The erosion of public trust and affordability
1. Housing unaffordability still rising despite billions in government measures: PBO
Toronto Star, December 12, 2024
The report says 2.4 million Canadian households are now in “core housing need” — 662,000 more than when Canada launched its national housing strategy in 2017.
The national housing strategy aims to pull 580,000 households out of core housing need, or reduce their need, by 2028. But the PBO’s latest projections say the government is nowhere near reaching that goal.
2. Comment: Why doesn’t the public trust government?
Times Colonist, December 11, 2024
A case in point: housing. Starting in the 1990s, the federal government got out of the business of funding social housing, leaving it to the market to provide.
The result? The market supplied lots of condos for investors, including offshore investors looking for a “bank account in the sky.”
[…]
The City of Victoria is spending $1 million on the development of a new Official Community Plan, for which there was limited public engagement. […] And affordable housing? This council has reduced the requirement for affordable units in new strata developments and has reduced cash-in-lieu contributions to the Housing Reserve Fund. Was there consultation on this? Maybe with developers.
No wonder the majority of Canadians don’t trust governments to act in their best interests and believe it’s impossible to have any influence on decisions that affect them.
3. B.C. corruption fears plague real estate and construction, says poll
Business Intelligence, November 27, 2024
Tuesday’s survey from the Angus Reid Institute reveals 65 per cent of British Columbians believe the real estate industry is vulnerable to corruption, while 43 per cent see the construction sector as vulnerable to corruption.
[…]
“Examples in the construction industry centre around collusion and bribery, wherein municipal bids can be manipulated for certain firms, or seemingly competitive processes can be corrupted,” said the report from the Angus Reid Institute, done in partnership with Mindset Social Innovation Foundation and the World Refugee and Migration Council.
“In real estate, tens of billions of dollars are thought to be laundered every year. Both of these aforementioned industries are seen as susceptible to corruption by at least half in Canada.”
Most Canadians perceive corruption is widespread in their country, with half the public believing it’s a significant cause of higher prices for shelter, groceries and other necessities.
4. Quick glance - Government actions taken to address Cullen Commission Recommendations
Province of BC, last updated September 19, 2024 [as of this post]
The Cullen Commission Final Report (PDF warning, 16MB - 1831 pages) outlined recommendations for the Province to address money laundering in B.C.
See [link above for] a summary of the actions the Province of B.C. has taken to implement these recommendations.
5. Opinion | Vaughan has slashed development charges in a bid to spark building. Why other GTA cities need to follow suit
Toronto Star, December 7, 2024
Unfortunately, market conditions in this region have created a situation where providing the housing required at a cost people can afford is challenging.
The industry recognizes we have a role to play in seeing how and where costs can be stripped out of the system to help provide the residents of the GTA the housing they need.
[…]
[Vaughan mayor and council] did not stand by the dated municipal dogma “growth paying for growth.” Instead they recognized the importance of development to continuing to ensure that Vaughan would remain what it is, a welcoming, thriving, and diverse city for present and future generations. After all, all residents benefit from new infrastructure and services, not simply new home buyers.
6. Will latest Bank of Canada rate cut boost the housing market? Analysts weigh in
Financial Post, December 11, 2024
The Bank of Canada announced today that it will lower its key overnight rate by 50 basis points to 3.25 per cent, marking its fifth consecutive interest rate cut and the second “jumbo” cut in a row. The move is expected to provide significant relief to the housing market, easing borrowing costs and stimulating demand in a time of slowing GDP growth and persistent global uncertainties.
[…]
“Homebuyers in the GTA (Greater Toronto Area) face a dilemma of strong sales and rising prices alongside economic uncertainty and affordability concerns,” she said. Zlatkin warned that today’s rate cut might intensify competition, potentially pricing out those waiting for a market cooldown.
[…]
Phil Soper, chief executive of Royal LePage, noted that the Bank of Canada’s rate cuts are driving increased demand.
“Buyers have woken up to the reality that property prices are rising again, and more will feel an urgency to act before affordability erodes,”