Canada is 3.5 million homes short of what’s needed for affordability.
Canada Mortgage and Housing Corporation, in a report released this week, calculated how many new homes need to be built for housing to be as affordable in 2030 as it was in 2003-4.
The report notes that in 2003 and 2004, a household with the average income could buy an average priced house in Ontario by spending 40 per cent of their disposable income.
In 2021, that household would have to spend close to 60 per cent of their disposable income to buy an average home.
CMHC estimates that, at current rates of construction, Canada will add 2.3 million housing units between 2021 and 2030. That would not do much to change affordability. To make housing as affordable as it was in 2003-4, Canada would need to add an additional 3.5 million housing units.
That would mean adding 5.8 million new units in 10 years or 580,000 a year. Canada completed 223,023 units in 2021 and our peak year was 1974 at 257,243.
The report says the challenge is huge. To meet it requires overcoming shortages of materials and labour, getting developers to make more productive use of their land and speeding processing of development applications, among other challenges.
Note that this report does not look at rental housing, subsidized housing or housing affordability for different income groups. That will come in a future report. The goal of this report is to gain a broad sense of the size of the challenge. Accounting for rental housing, subsidized housing and broader affordability will show that the challenge is even bigger than the big challenge laid out here.