American economist Thomas Sowell once said that “there are no solutions, only trade-offs.” That is, dealing with a problem entails making a choice, and doing so entails forgoing the alternatives.
For example, damming a river to protect a town from seasonal flooding means accepting that a reservoir will form on other side of the dam. The reservoir – and all it may entail for its natural surroundings – is deemed preferable to the potential damage that yearly flooding would do to the town.
The good news is there are policy options that can be brought to bear on a painful housing crisis that is leaving Canadians exasperated, and rightly so. The bad news: we haven’t decided which options we’re willing to accept. At its heart, the crisis stems from a growing gap between housing demand and supply; many homes are needed, but too few are built. The Canadian Mortgage and Housing Corporation has estimated that we need to build 5.8 million homes nationwide by 2030 to restore some semblance of affordability; we are on track to build less than half of that. Closing this gap will require significant increases in investment, labour, materials or productivity – but more importantly, it will require political will.
We have three broad choices, each with their own trade-offs.
First, we can build our cities outward, accelerating the creation of new neighbourhoods at the edges of our communities. This has been Canada’s way for most of its history, but especially after the Second World War and the mass adoption of personal automobiles. Canada has also traditionally used its enormous land mass to build entirely new cities, including railroad and resource boom towns from Calgary to Dawson City. The trade-off: More land for homes means less land for everything else. Canadians who currently oppose the redesignation of farmland or other rural areas surrounding cities would need to accept more home building in these areas. In more remote regions targeted for development, the thorny issue of divvying up Crown land – which comprises the majority of Canada’s land mass – would inevitably emerge.
Second, we can grow upward and become denser by shoehorning additional homes into existing neighbourhoods. To an extent, we’re already doing this: more than half of home building between 2016 and 2021 occurred within existing urban areas, and recent government reforms (e.g. allowing the conversion of single-family homes to triplexes) signal an appetite for more, though Canada’s cities would need to at least triple the current densification rates to close the gap through this option alone.The trade-off: most neighbourhoods would change – perhaps drastically. Canadians in urban areas, for instance, would need to mentally divorce themselves from the notion of owning single-family detached homes with garages and yards, and accept that neighbourhoods can’t stay frozen in time. As famed urbanist and former Torontonian Jane Jacobs put it, “a city cannot be a work of art.”
Third, we can grow our population more slowly. Faced with an enormous gap between the number of homes Canada needs and the number built, we could simply shrink the need. Governments (thankfully) don’t control how many children Canadians have, but they do determine immigration policy and the number of permanent and non-permanent residents. Anyone broadly opposed to historic increases in home building at the urban fringes or within existing neighbourhoods, but who still wishes for affordability, also wants to reduce population growth, whether they know it or not. The trade-offs here are more complex. If the federal government reduces immigration levels, Canadians must accept new demographic realities and policy solutions aimed at significantly improving productivity to offset a slower-growing or perhaps even shrinking work force, which may change how and when Canadians retire, among other considerations. In short, this would require additional trade-offs in other avenues.