"Wait Until 2060": Canada's Housing Plan for Young People

[00:00:00]When someone is critically injured, doctors should see them first in the ER before seeing the guy who just came in with a broken arm, right? Well, can the same be said about housing?

[00:00:10]>> Demographics, hosted by Mike Moffatt and Cara Stern.

[00:00:15]>> There's some tension between housing advocates who see the crisis as a situation that requires triage, and others who think we can attack all sides at once: homelessness, social housing, and middle-class market-rate housing.

[00:00:27]>> Specifically, when governments are spending billions of tax dollars to work on solving the housing crisis, where is that money best spent? That's what we were thinking about reading a recent report from the Office of the Federal Housing Advocate.

[00:00:40]>> Here's what they recommended. One, end homelessness by 2040, and they describe that as functional zero homelessness.

[00:00:47]Two, end housing need among very low and low-income renters by 2050. And three, ensure that all Canadians have access to an adequate home they can afford by 2060.

[00:00:58]Mike, I know you're itching to talk about those targets, but let's start with this. What is the Federal Housing Advocate, and what are the goals?

[00:01:06]>> Yeah, so the role of the Federal Housing Advocate is set out in the Federal Government's National Housing Strategy Act, and this was a landmark housing policy that was set out in Justin Trudeau's first term of Prime Minister.

[00:01:19]And you read through the act, and section 13 of that act lays out all of the responsibilities of the advocate. It basically creates the position.

[00:01:28]And they have this pretty broad mandate to provide advice, conduct research, you know, that kind of thing. The advocate is housed at the Office of the Federal Housing Advocate, and is paid for by the Federal Government. The position, or the person who holds the position, is chosen by the Housing Minister. They say uh serve a three-year term, which can be renewed once. And since I'm sure we'll get comments on this, and feel free to leave some in the comments section, I've never applied to be the Federal Housing advocate. I have no interest in being the federal housing advocate and you know, I think the housing advocate is doing a good job giving her mandate. So anything I say here is not sour grapes or me auditioning for a position. I think she's doing a fine job.

[00:02:13]>> But we know you do the job well. We're just happy you're staying here.

[00:02:16]Do governments tend to follow their advice?

[00:02:18]>> Yeah, I would say they have in the design of federal housing programs and I think there's a fair bit of value in the research that's produced or commissioned by the office. So I think the advocate's getting results, but if they're not then you know, I say we abolish the position.

[00:02:32]Like literally the advocate has one job, which is to provide advice to advocate and the position comes with a federal government salary in the range of a hundred fifty to a hundred eighty thousand dollars. So it is really important that they provide value for money.

[00:02:47]>> So 2060 is a target for solving the housing crisis for people who end up with market rate housing and that of course is the majority of people. So I get this is a big goal. The report suggests basically doubling our supply of homes to reach affordability and I understand that will take time because like even if you like air dropped homes into unused land or under used lands, like it's still going to take time to put in the infrastructure needed to support those homes plus the time it takes to train the laborers we need, get all the materials we need to double our housing supply. So even though I hear 2060 and my I go what? No, that's horrible, but at the same time I'm like I do understand where they got this number from.

[00:03:24]>> Well, they don't really explain the 2060 number, but I you know, we can certainly say that yes, it will take a while. And I would say in fairness to the report that doubling of housing start goal doesn't come from the report itself, but it actually comes from the liberal party platform during the last election via the CMHC or their interpretation of the CMHC report. But you know, with recent reductions to immigration and non-permanent resident programs doubling housing starts by 2035 might not even be necessary anymore, but you know, we do have to make sure that we build not just enough housing, but the right type of housing, and that's going to be a challenge. And governments can always reduce demand further by pairing back immigration or non-permanent resident programs if they need to. So, there's no reason why we have to stick to this trajectory, this this doubling of housing starts in order to, you know, meet middle-class housing need. So, I would question some of the underlying assumptions that went into this 2060 estimate. Again, with the caveat that those assumptions aren't coming from the Federal Housing Advocate's Office themselves.

[00:04:32]>> I I totally get it. If you are trying to double housing supply in this country, I can't imagine what a big project that would be. But obviously, there's a big problem if you're telling people they have to wait 3 and 1/2 decades to get affordable housing. Like that's basically an entire person's career. I was thinking about that number and I'm like, that's past the point that people in high school will even be able to have kids. So, if they're waiting for a home before starting a family, like just give up now unless you can't access capital from family because it's so far away. I do understand though that this report prioritized market-rate homeowners last.

[00:05:03]Like they were trying to solve the problems progressively. So, it followed this idea of the triage system for housing where you solve the homelessness problem first, then you help low-income families, and finally everyone else who really should be able to afford market-rate homes that maybe need less government intervention or less government dollars going towards that.

[00:05:20]>> Yeah, and I I could certainly understand the logic. So, though I think the idea of telling somebody in grade nine that they won't be able to afford a home until they're 50, which is what the math is here, is really problematic and and really troubling. But that aside, I also find the length that some folks will take this triage argument to to be as absolutely absurd. You know, in my mind, it's like asking, "Okay, what's more important, health care or education?"

[00:05:48]And saying, let's say we pick health care and say, "Okay, until the health care system's fixed, we're going to abolish higher education.

[00:05:55]We're going to get rid of the schools.

[00:05:57]We're going to take all the money that we put in the education system, put it into health care, and then once we all agree that health care is fixed, maybe we can start to open the the schools again."

[00:06:07]And then even if we do that, let's say we pick health care. We go, "Okay, well, what's the most important health care issue?" And you know, we could look at mortality rates or whatever and go, "Okay, cancer. Okay, then let's put 100% of our research and health care dollars into cancer. Let's drop everything else.

[00:06:23]Only train doctors to be cancer specialists. Only do research on cancer." So, you know, celiac disease, diabetes, whatever else, you're not getting a dollar until we cure cancer. And then we ask ourselves, "Okay, but which cancer?"

[00:06:37]Well, given that lung cancer kills more Canadians than any others, let's put all of our research dollars into that. So, pancreatic cancer, breast cancer, testicular cancer, you know, nothing for you. Let's shut it all down.

[00:06:49]And let's definitely shut down any health research funding for something that isn't fatal. You know, it's just a ridiculous position. Now, I absolutely agree that we absolutely need to make sure that we get value for money. But what matters is where marginal dollars go and how effective those dollars are, not this absurd development of hyper-prioritization where we put all our eggs in one basket cuz we deem that basket to be the most important one.

[00:07:16]>> Well, to be fair, all of those cancers can kill you. Whereas, there's [clears throat] obviously a huge difference in how dire the situation is between someone who's homeless and living on the streets and someone who's stuck in a rental when they prefer home ownership.

[00:07:28]>> Yeah, well, I would say again, there's a couple things to keep in mind. The The first, if more ownership housing gets built, that frees up rental units. That creates vacancy chains. That makes housing more affordable, which reduces homelessness. So, they're not unrelated problems. They They don't come at the expense of each other.

[00:07:47]That solving middle-class housing crisis helps with the homelessness issue.

[00:07:52]But, you know, let's go back to the triage idea. There's also a big difference between someone who is homeless and someone who is struggling to pay their tuition. Do we cancel all supports for higher education until we solve homelessness? You know, I hear this from, you know, the same politicians say, "Okay, we've got we've got to put our our our money into homelessness." And then, you know, they're spending our money on on soccer tournaments and, you know, renaming Dundas Square and what have you. If you're going to use that argument, you know, be consistent about it. But, but nobody ever is. Because there's this implicit assumption that they're making here that the opportunity cost is between one housing program and another housing program. So, if you put money into, say, reducing development charges, that has to come at the expense of anti-homelessness programs.

[00:08:40]That's not how government spending works. Governments do shift the proportion they spend in one area relative to another all the time. So, if we cancel a housing program and say, "Okay, you know what? We We don't want to reduce development charges. We're not going to put more dollars into that."

[00:08:55]That money doesn't suddenly magically go into anti-homelessness programs. My bet is they would be far more likely to go into something like old age security than social housing.

[00:09:06]>> These housing crises are intertwined though. So, it's not like if you're trying to solve low-income housing problems, that would obviously have an impact on market-rate housing because there's so much overlap in the the way that you would attack these problems.

[00:09:18]And of course, the problem is when you're trying to solve one and you can that comes at the expense of another like when city councils implement so-called inclusionary zoning, where do they push the cost of social housing on buyers of market-rate homes, then you kind of get zero-sum there. But, ideally, a lot of the solutions overlap.

[00:09:33]Like there's zoning issues, building code issues, and you if you fix that early, it'll help across the board.

[00:09:39]>> Yeah, absolutely. And that's I I think the frustrating thing about this kind of triage argument is that like 90% of the solutions are the same, right? There's no social housing building code. There's no social housing zoning. There's no social housing sewers and social housing electricians and I and so on. That if you kind of fix one part of the housing system, it it applies everywhere. And you know, ultimately, we need to build more homes that, you know, in any system with scarcity, money is always going to win. Always. So, if there aren't enough homes to go around, families with money are always going to outbid families without money. And you're going to have homelessness regardless of how many social programs you have cuz money always outbids not having money.

[00:10:23]>> That's fair. And I do think a big part of the expanded problems with homelessness that we've seen, they kind of grew in tandem with home prices as they've gotten out of reach. But for low-income and social housing units, couldn't the government just earmark them for people with the lowest income so that we it doesn't have people with more money outbidding them?

[00:10:41]>> Well, you still have mass homelessness because you're still going to have somebody at the wrong side of that the cutoff for deeply affordable housing.

[00:10:48]You know, if you have a hundred families who need these types of homes and only five spots, you can allocate those five spots however you want. You could give them to the poorest or the tallest or you could hold a draft lottery like the NHL. At the end of the day, you're still going to have five families who win and and 95 who lose. And you know, the the mechanism doesn't change that. So, overall, we need to build enough homes, otherwise money is always going to bid out money. And you're right that maybe they're not outbidding the exceptionally poor, they're just outbidding the very poor instead. The outcome is still largely the same.

[00:11:25]>> Honestly though, though even though I get upset when I think about 2026 being the government's goal if if did take that on as their goal, there's part of me that thinks like maybe that's realistic. And Canadians who don't have access to generational wealth should accept that and plan their lives accordingly instead of like holding up a hope that the government will fix it for them soon enough that it makes sense for them to dedicate their lives to living in Canada.

[00:11:46]>> I don't think 2060 is more realistic at all. That in fact, I think if we don't solve it anytime soon, we just we just won't. We will never get around to it.

[00:11:53]But I would absolutely agree with I think that your premise that I would you know, advise young people to consider their options.

[00:12:00]You know, I would not tell somebody in grade nine, go oh no, they're going to they're going to they're going to fix this and they'll do it soon. So you don't need to worry about that. You know, I think that's that's unrealistic.

[00:12:10]And I do have a lot of time for the idea that we need to be realistic in our targets. I definitely support having targets. And I agree like we've already blown through so many of our housing targets, climate targets, what have you.

[00:12:21]So I'm with the housing advocate, you know, on the need to have targets and that those targets should be realistic.

[00:12:27]You know, full agreement there. But you know, then it becomes a question of okay, what is realistic? And I think it we can absolutely solve this but before 2060. And we've already seen the federal government massively reduce the demand for housing through changes to immigration programs and non-permanent resident programs such as international students.

[00:12:48]But we still need to increase home building. You know, there's so much pent-up demand in the system. There's so many folks in their 20s, early 30s, you know, still living in in mom dad's basement, living on the couch. We need more housing and particularly we need more family-size homes. And that is going to require governments make a series of tough decisions. How we fund infrastructure, you know, our land use decisions and so on. We need to make it much cheaper and easier to build the kinds of homes that the families want and need. So, you know, I don't want to discount how challenging this will be, but I do think it's absolutely doable to fix this in in roughly a decade or so.

[00:13:25]>> I love your optimism for a decade. Like that seems like a very lofty goal and I hope you're right, but honestly I've heard governments announce program after program promising to solve housing and I think well the big one that comes to mind for me is 5 years ago when Doug Ford was promising 1.5 million homes by 2031. So we're now halfway there from when they set that goal and we're nowhere near that target and I think we're actually worse off than we were at the time. And I remember when it home building started slow and the housing minister at the time said something like "Don't worry, we're we're building up our capacity and eventually it'll pick up. You know, the second half of the decade we're going to be building like wild and it we're going to make that target." And that never happened and now it seems like the Ontario government is just ignoring that target instead of admitting failure.

[00:14:07]So I don't have a lot of hope. I get a little bit frustrated when I think about these these goals that have just like I've never seen them hit any of their goals on housing since I started [laughter] covering this. It doesn't seem like any of them have have made it.

[00:14:19]But even if it is possible to build enough homes to solve the middle-class housing crisis before 2060, is it possible to do it without tanking home prices, which was something that I think we've seen the government is not super keen to have happen?

[00:14:32]>> Yeah, or or or even talk about. Now I actually think that's probably where where the challenge is here. There is a political challenge more than an economic one. And to be clear, like governments should not be in the business of trying to impact the price of resale homes. Particularly they shouldn't be in the business of trying to prevent them from from falling. You know, we talk a lot about well well housing is an investment. Okay, well if housing is an investment, you know, investments fall. Investments go down.

[00:14:59]You know, if anybody thinks otherwise you're welcome to buy my shares of Colleague and Atari off of me. You know, this happens all the time. We got to allow asset prices to to go down.

[00:15:10]But what governments should be doing is focusing on reducing the cost of building new homes that meet the needs of families. And those new homes may look different than homes did 30 or 50 years ago. You know, you may have more multiplexes, fewer single detached, that kind of thing. So, you know, I don't think it's as simple as just saying, "Okay, you know, let's just do build homes that look exactly like they did in the 1980s, and let's just, you know, build three, four x times them." Like I I think this looks different. And if we do build more homes, that's absolutely going to impact the value of existing homes, but it's going to do so in complex ways. It's not as simple as say, "Okay, all home prices are going to go down 10 or 20 or 30%." So, for example, let's say the city of Toronto made it really easy to build family-friendly infill multiplexes. That would would put a lot of downward pressure on high-rise rents and condo prices. As you can imagine, a young family, young couple who lives in one of those would sell those and, you know, they'll move into a multiplexes.

[00:16:12]It would also probably reduce the number of families who move to a place like Brantford or Woodstock. You would reduce that kind of drive until you qualify traffic.

[00:16:20]That's going to reduce the the price of homes there. But on the other hand, it could actually increase the value of single detached homes in Toronto, particularly in more urban areas, because the land under them would become really valuable because you would be able to tear down a smaller home or renovate a smaller home and turn it into a fourplex, a sixplex, or eightplexes.

[00:16:42]So, this this new versus resale relationship is complex, and it's not the case that, you know, if you start building more homes, the price of all other homes falls, but many of them would, and, you know, that is a political challenge, to be sure.

[00:16:58]>> And we we should be okay with it. I love what you're saying about you this housing should be more of an investment in that way. I'm like, "Well, is it sound When you first say it, I'm like, 'Oh, no. We don't want it to be more of an investment. Isn't the whole thing is we want people to treat it as a place to live?'" But no, I get what you're saying that like prices need to to able to come down. They need to be able to move around with the market.

[00:17:18]Like that is that is what it means to be an investment. And this applies like it's so important because if someone is in the middle class and they're priced out of owning a home, they're going to be forced to rent even if they don't want to if it doesn't make sense for their family and that means they're taking up a rental unit from someone who may need it more and given the lack of family size rentals especially, I keep thinking like then people who who are lower income and really need that won't won't have access to it. They're being taken up by people who really should be able to afford market rate homes and buy if they want to. That creates less turnover in the rental market. It makes the whole situation worse for everyone else.

[00:17:53]>> It really is an issue and we absolutely need to be concerned about those experiencing homelessness or at risk of experiencing homelessness. But that said, I'm quite shocked by how cavalier some advocates are with the needs of young middle class Canadians. If Canada is seen as increasingly hostile to their needs, those folks are going to leave or perhaps those young middle class Canadians are going to stay but they're going to want to burn the system down.

[00:18:19]So this idea as a country we can somehow simply tell young people, "Yeah, we've priced you out of ever having a middle class life but we'll fix things for your grandkids and that will all be okay."

[00:18:30]It's simply baffling to me. I just don't get where they're coming from.

[00:18:34]>> Yeah, it's really scary to think that we're going to lose like everyone who has any other option of living anywhere else and they will go where where they're able to start their careers, where they're able to have the life they want. So yeah, I don't think we want to make that our goal and I don't think we want to to signal to people that that's our goal because I I don't know that governments would want to follow that. Like if they think about the long-term consequences of that, that is a big problem. But I get why politicians don't want to see change cuz it could mean hurting the asset value of some of the most reliable voters. But it is creating big problems in our country. So I hope we get some actual targets from governments that they actually intend to follow through on so people can at least make informed decisions about where to put down their roots.

[00:19:15]Thank you so much for watching and listening. Our producer is Meredith Martin and our editor is Sean Foreman.

[00:19:21]>> If you have any thoughts or questions about defunct 1980s tech companies, please send us an email to [email protected].

[00:19:29]>> And we'll see you next time.