The 2024 numbers are in, and it was another underwhelming year for housing starts. Canada Mortgage and Housing Corp. reports that last year there were 228,000 housing starts in Canada. This compares to 249,000 homes in 1972.
Despite every kind of tax imaginable—speculation, empty homes, foreign buyers–and billions spent on new housing programs by government, Canada has been unable to build more homes and thereby reduce, or limit the increases, in the cost of homes.
The problems are in plain sight. While there is much talk about a “crisis” in housing by all levels of government, there is an appalling lack of collaboration between them. Red tape and over regulation have slowed the building of new homes to the point where supply cannot keep pace with demand. Compounding the challenge of building more homes faster, the endless taxes, fees, levies and charges layered on new housing by local governments have pushed prices to depressing levels for first time home buyers.
Practical, common-sense solutions to this never-ending crisis are in short supply.
However, Delta’s mayor and council deserve credit for exploring a policy change that could provide some relief to homebuilders. Delta is considering a shift to collecting development cost charges (DCCs) on project completion rather than upfront. This is more important than it may seem at first blush.
The costs to start construction are too high, and many approved projects are paralyzed because of them. Surrey, for example, reported last month that more than 44,300 housing units have been approved but have yet to start construction. Across the region, that number tops 73,000. The sheer volume of stalled projects is staggering and underscores the reality that it is not possible to build homes working families can afford. Anything that removes an upfront hurdle to starting construction on new homes is welcome.
Some cities across Canada, are adopting bold initiatives: Ontario cities Vaughan and Mississauga are reducing their development charges by up to 50 per cent.
That’s not happening here. Instead, municipalities are hiking fees to unsustainable levels. Metro Vancouver itself voted to increase the DCCs it charges on new homes, apartments and condos by an eye-popping 300 per cent over the next two years. This from an organization that has proven itself incapable of managing its finances and new infrastructure projects.
The cost to build Metro Vancouver’s wastewater treatment plant has exploded from an original budget of $700 million to nearly $4 billion and will likely go higher still—and will be delivered a decade late. To pay for their ineptitude, Metro Vancouver has passed a levy that local taxpayers will have to pay for decades to come.
While this saga of incompetence plays out, there is silence from Victoria. It’s high time that the provincial government acts decisively and takes the construction of major municipal infrastructure away from Metro Vancouver, limits its scope to providing sewer and water services, and imposes oversight and accountability for long-suffering taxpayers.
As for the municipalities themselves, they have been left holding the bag for far too long for irresponsible federal immigration policy. In recent years, the Trudeau government ratcheted up immigration to record levels. This explosive growth was so fast that C.D. Howe Institute reported last month that Ottawa can no longer accurately count the number of people living in Canada.
Local governments are left to deal with the influx of overwhelming numbers of new people. The result, higher costs for new homes. As HAVAN reported last fall, the Township of Langley raised their DCCs by an eyewatering 81.19 per cent for single-family homes, 79.15 per cent for townhouses and 46.11 per cent for condos from June 2023 to October 2024. Local officials—and beleaguered homebuilders—rightly ask, “Is there another option?”
The answer is “yes” and rests with Victoria. The provincial government should start helping fund municipal infrastructure in a meaningful way. By reducing the financial pressure on cities, they will be less inclined to ratchet up DCCs every year.
This is not to let cities off the hook for the role they play in the affordability crisis—painfully slow project approval and permitting processes are the source of deep frustration in the building community.
In addition to following Delta’s lead in delaying the timing of the collection of DCCs, cities should move to take much of the decision-making on new housing out of city hall. It serves no purpose for builders to retain teams of architects, engineers and expert consultants to develop plans and proposals and submit them to city hall, only to have staff in planning and engineering departments micro-managing every part of the application.
Once builders submit a completed package, the review should be swift and more reliance, responsibility and liability placed on third-party consulting teams. The role of city hall should be more limited to inspecting, reviewing and monitoring for compliance. And the provincial government should work with professional associations to enhance this framework.
Our housing affordability crisis is a policy failure decades in the making, it will take a fundamental re-thinking of everything we do and bold action if we hope to build more homes for families than we did two generations ago.
Chris Gardner is president and CEO of the Independent Contractors and Businesses Association.
