Rishi Maharaj: Our housing problem isn't money. It's cities not wanting more houses.

Municipalities largely do not want new homes, at least not in the form that would be necessary to build them at significantly lower prices than our current stock of housing.

By: Rishi Maharaj

The federal election campaign is in its early days, and so far most Canadians could be forgiven for not paying much attention. Nobody seems to be quite sure why we’re having this election — including the guy who called it.

In terms of issues, the first 10 days of the campaign have featured the greatest hits — abortion, guns and health care — but also an issue that doesn’t always get as much attention in federal politics: housing.

Housing prices have been a smouldering debate for much of the last decade, especially for younger Canadians and particularly in the Vancouver and Toronto metro areas that combine to house 8.5 million Canadians. But it’s only in the last two years, as the effects of the COVID-19 pandemic have contributed to real estate prices soaring around the country, that it has been elevated to a first-tier national issue. 

I’ll recap briefly. Since 2019 we’ve seen the price of homes rise spectacularly not just in Vancouver, Toronto and surrounding areas but in North Bay, Castlegar, Campbell River and Moncton. Those who spent the last decade dismissing the meteoric rise of housing prices in major metros as young people being too choosy with their choice of home were left speechless as prices surged in places far beyond commuting distance from cities and where well-paying jobs are few and far between. 

The list of communities where the ratio of sale price to annual income sits at more than double the 5:1 that financial planners generally consider the outer range of affordability now includes defunct sawmill towns, hamlets that do not have professional fire departments, and towns where the nearest hospital is several hours away. 

With the release of the Liberal platform, we now know what all three major parties plan to do about this situation. I’m sorry to say that none of it seems up to the task.

The Conservatives and the NDP have promises that are roughly what you’d expect, given their ideological priors. The CPC manifesto focuses on the need to create new housing supply. The NDP platform acknowledges the struggles of the third of Canadians who rent, and who are largely absent from the Conservative agenda.

Both platforms have worthwhile measures in them, and my purpose here isn’t to dissect the differences between them. The Conservatives are right that housing supply hasn’t kept pace with population growth. The NDP are right that a significant fraction of Canadians will never be able to afford market-rate housing and that the availability of non-market housing to meet their needs is scant. 

The Liberal proposals are a bit of a mess, borrowing heavily from both NDP and Conservative platforms with conflicting measures (increase supply, but also sprinkle cash on first-time buyers to amp up demand), but at least they recognize there’s a problem.


Each party has its own version of how it thinks it will increase the supply of housing, but they all boil down to the same thing as most federal policy: Ottawa will provide incentives, either through the tax system or directly to developers and municipalities, to construct new homes. A certain degree of hand-waving is employed to suggest that if the money is there, the homes will soon follow.

To my eye, the Conservatives are closest to articulating a realistic narrative of how we’ve come to be in the situation that we’re in — more dollars chasing an inadequate supply of homes — but they don’t quite get to why. And why is the worst part.

A surge of federal funding for housing might work if developers and municipalities really wanted to build new homes but couldn’t quite afford it. If a city wanted a subway, a wastewater treatment plant or an expressway, Ottawa ponying up some cash would be a perfectly reasonable way to bring that project to fruition. 

The trouble here is that municipalities largely do not want new homes, at least not in the form that would be necessary to build them at significantly lower prices than our current stock of housing. Homes are very expensive in large part because municipalities have erected a litany of barriers to where they can go, how much of a lot they can occupy, how tall they can be, where they can cast shadows, how many doors can face the street, etc. — all while demanding that new residents pay up front for public infrastructure to service them. The million-dollar homes we’re building today are the cheapest homes we can build under current planning rules.

Federal money doesn’t change municipal politics, which is often dominated by the loudest, most reactionary home-owning voices in the room. As John Michael McGrath wrote in an excellent piece for TVO, “our cities are as exclusionary as they are because municipal voters value that exclusion and vote with that in mind.” This isn’t just a small roadblock, this is the crux of our housing crisis — and no party has articulated a way to address it.

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If you need a real-life example of this dynamic, I point you to the debacle that is the Scarborough subway. Toronto politicians up-ended a light-rail transit line that was fully funded by the province in favour of a subway that they would have to pay hundreds of millions extra for. Instead of standing their ground on the objectively better and cheaper LRT, the Ontario Liberal government of the day folded like a $2 chair, tore up the LRT and went along with Toronto’s crayons-on-napkin scheme. Ottawa, no doubt sensing an opportunity in swing suburban ridings, re-upped its financial commitment to the project on Toronto’s terms. 

Ottawa may have fiscal capacity in spades, but it doesn’t have the wherewithal to go toe-to-toe with municipal politicians on their own turf and tell them that no, you can’t reserve 75% of your city for single-family detached homes. This does not change whether it is $1 billion, $10 billion or $100 billion on offer. 

Legally, municipalities are creatures of their respective provincial governments and can be overruled on a whim. Practically, they represent the deep-held views of the 63% of Canadians who own their homes and do not want its value to decrease for any reason. Until and unless we can grapple with the reality of why even our densest cities are so hostile to new residents, we don’t have a chance in hell of solving our housing crisis. 

There are a lot of things you can do with big cheques from Ottawa, but reforming local government isn’t one of them. That change will need to start much closer to home.

Rishi Maharaj is an electrical engineer. He lives in Powell River, B.C.

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