Beyond Supply Rethinking Canada Housing Crisis and the Role of Homeownership

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Canadian politicians often propose increasing housing supply and reforming immigration as solutions to the housing crisis. However, Paul Kershaw, a public policy professor and founder of Generation Squeeze, argues that this focus on expanding supply masks a deeper issue: society's fixation on rising home prices. He contends that the real problem is how homes are increasingly viewed as financial assets, leading to profits being prioritized over affordable housing access. Kershaw calls for a shift in perspective, emphasizing the need to curb rising prices and reassess what we truly want from our housing system.

Home prices in Canada have surged dramatically over the past two decades. The average home price more than tripled from $241,000 in January 2005 to $719,400 by February 2024. This increase is partly due to investor activity, which has risen significantly and contributed to bidding wars and higher prices. The Bank of Canada notes that a growing proportion of homebuyers are investors rather than first-time buyers, exacerbating the affordability crisis as these investors often buy multiple properties or hold onto homes rather than selling them.

The obsession with homeownership in Canada also complicates the issue. Many Canadians see owning a home as essential for financial security and status, which drives up demand and prices. Despite recent measures to address the housing shortage, such as increased funding for rental housing, the demand continues to outpace supply. Experts like Naama Blonder suggest that societal attitudes toward homeownership need to change, acknowledging that renting may be a viable option and that more radical solutions are required to tackle the affordability crisis effectively.

Read the full article on: CBC