Municipal opposition to housing development has contributed to Canada’s current housing crisis, according to Scotiabank Canada chief economist Jean-Francois Perrault.
The federal government regulates who comes into the country, but municipalities — and, to a lesser extent, provinces — hold a lot of power over where people end up living, Perrault told the House finance committee. of the communes on Monday.
“In my opinion, the source of the problem is this nimbyism, whether you like it or not,” he said.
“This is an important factor that limits housing development. We end up with less housing, and we all pay more, whether tenants or landlords. »
NIMBY is an acronym for Not In My Back Yard, so Nimbyism generally refers to the phenomenon of residents opposing things like social housing, homeless shelters and safe injection sites that are growing in their neighborhood.
Offering municipalities more money or other incentives could help, Perrault said, adding that nimbyism is a political problem, not an economic one.
“If there are financial constraints or considerations that delay (housing development) or make it more difficult for municipalities or provinces, that can be resolved,” he said. “But at the heart of it (are) the political challenges, and how municipalities want to deal with them. The fact that populations are increasing… imposes quite difficult choices (on) local politicians.
The finance committee is currently studying the rate of inflation in Canada, which hit a 30-year high of 4.8% in December. Affordable housing was a hot topic in the committee after home prices jumped a record 26.6% in December from a year earlier, according to the Canadian Real Estate Association.
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Many witnesses who testified before the committee said that the supply does not meet the demand.
The pandemic has made Canada’s housing crisis more complicated, as Canadians leave large urban centers, such as Montreal, to live in smaller communities, Philip Cross, senior researcher at the Macdonald-Laurier Institute, told the committee.
“We are facing a huge … deficit,” he said. “At the current rate of construction, (it will take) a decade just to solve this problem.”
Supply, however, is only part of the problem. Canada still needs affordable housing, said Sahar Raza, project manager for the National Housing Rights Network.
According to the Canada Mortgage and Housing Corporation, housing is considered “affordable” if it costs less than 30% of a person’s pre-tax income.
Raza says very few homes meet that definition, and what does exist is quickly disappearing.
“We need to revamp ineffective housing programs and policies to better (use) our current housing supply,” she said. “We need to close tax loopholes and increase investment in off-market housing.”
This story has been corrected after publication.