Addressing Housing Affordability: Shifting the Focus from Demand to Supply

Currently, our system focuses on addressing the issue of demand, but our main challenge lies in the supply for housing. We are not addressing the correct problem; our efforts aim at resolving the wrong thing.

Rather than trying to make homes more affordable by reducing demand, we should focus on increasing the supply of housing. Increasing the housing supply will result in greater affordability.

One of the main issues is that if home prices decrease while the costs of materials (such as lumber, drywall, plumbing, glue, and nails) do not decrease in the same way, it puts a financial strain on builders and reduces their inventory value, discouraging further construction. As a result, we are delaying our construction goals. Failing to achieve these targets would have repercussions on immigration, leading to other economic, social, healthcare, and CPP-related problems.

While it's true that we require more affordable housing, solely relying on strategies like adjusting interest rates or implementing bans on foreign buyers is not the sole solution. Our primary focus should be on increasing the housing supply. By doing so, the forces of supply and demand will become stabilized. It's important to have a diverse range of housing options available, encompassing both affordable and expensive properties. This approach ensures a well-rounded outcome, rather than solely fixating on price, which could compromise quality, quantity, and motivation.

Ensuring access to housing is vital, and it requires a strategy that emphasizes a combination of rental and ownership objectives with support from all levels of government. It is crucial to foster a culture that promotes the construction and intensification of housing units.