Over the next three years, the federal government plans to welcome around 500,000 new immigrants per year to Canada. A record number will settle in southern Ontario. Immigration is key to Canada’s economic development and population growth, but will newcomers be able to find affordable places to live?
To talk about how governments can fix the housing supply problem for a growing population, Dr. Frank Clayton of the Centre for Urban Research and Development at Toronto Metropolitan University joined TRREB Chief Market Analyst Jason Mercer for a recent episode of Ready to Real Estate.
The Housing Challenge
Many newcomers to the GTA become renters after they first arrive. In the past, rental units became available as renters moved into the homeownership market. Now, in a tight market that shows little sign of loosening, people aren’t moving as frequently. Affordable rental housing isn’t available, especially at the rate that’s needed over the next few years.
Quick Fix: Secondary Suites
One fast and effective way to get rental housing built, according to Frank, is for federal and provincial governments to give grants and interest free loans to homeowners for the creation of “secondary suites” in their houses. These affordable units could be created more quickly and cheaply than building new rental housing which has a high cost to build per unit.
Solution Through Compromise
Another way to shelter the growing population is to accelerate the building of new houses. Bringing more houses to market would allow middle-income renters to upgrade, thereby vacating their rental units.
Frank suggests a compromise between the high-density housing promoted by environmentalists and governments, and the low-density housing many buyers want, saying that we need to build “up and out.”
To build out, governments must make more land available and allow for market-friendly processes to speed development. This kind of development doesn’t have to result in large lots and low-density communities – it might include a mix of small lot singles, townhouses, stacked townhouses and multi-plexes.
Check out Jason and Frank’s full conversation about solutions to housing affordability on this episode of Ready to Real Estate.