The Conservative Housing Plan: Building homes isn’t enough for affordability

The Conservative Party of Canada recently released its housing plan, the centerpiece of which is the proposed Building Homes Not Bureaucracy Act. While the private members bill introduced by Conservative leader Pierre Poilievre is unlikely to pass, he is successfully tapping into anxiety about the rising living costs — and especially the grief felt by younger Canadians and newcomers who can no longer afford a place to call home.

In his narrative on affordability, Mr. Poilievre is tapping into several longstanding Gen Squeeze housing messages:

• He talks about the growing number of years of work required to save a down payment — a staple the Gen Squeeze housing analysis in our Straddling the Gap.

• He draws attention to the fact that hard work is no longer enough to secure an affordable home — mimicking Gen Squeeze’s longstanding argument that hard work no longer pays off for younger people the way it did for previous generations, thanks to stagnant wages and rising costs.

• He suggests that Canadians are having to give up on things that many in previous generations could take for granted, like an affordable home — reproducing Gen Squeeze’s commentary about the profound adaptations younger people are already making in the face of declining affordability, shifting where and how they live, and whether or when they will start a family, among other things.

I suppose one could welcome these parallels as evidence of Gen Squeeze’s influence on federal politics.

But it’s hard to feel good about how our data and framing are being used as soon as you look at Mr. Poilievre’s housing policy prescriptions. Despite his seeming acknowledgement of intergenerational tensions at the heart of Canada’s hosing system, the Conservative plan won’t do enough to resolve them.

The main reason for this is that Mr. Poilievre falls victim to ‘silver bullet’ thinking on housing. His plan suggests that a singular focus on building more homes will solve all of our problems. All we need to do is provide the right combination of sticks and carrots to make municipalities and housing bureaucrats fall into line to get more homes built faster, and prices will magically stabilize, restoring affordability.

It’s a nice picture, and it sounds simple enough. The villains are clear — the fault lies with municipal ‘gatekeepers’ who unfairly stand in the way of development, or bureaucrats who line their own pockets while failing to do their jobs well. The rest of us are off the hook. How comforting.

Sadly, the answer just isn’t this easy.

Like it or not, we can’t build our way to a housing system fix.

Yes, increasing the supply or market and non-market homes is a part of the solution. And it is important that Mr. Poilievre is encouraging Ottawa to use its spending power to incentivize cities to add badly needed density in municipal lands already zoned for residences. But this singular focus will not be enough on its own to reconnect home prices with local earnings.

What we need is a comprehensive and multi-pronged approach, as Gen Squeeze makes clear in our housing policy solutions framework. This includes reorienting Canada’s economy away from viewing housing as an investment asset class (which drives up prices of existing homes), and towards investing innew businesses. At the same time, we need to see a tax shift to reduce taxes on income by raising taxes on high housing wealth.

It’s too bad that Mr. Poilievre and the Conservatives stopped at lifting Gen Squeeze’s description of our housing problems, and who is being harmed by them. If only he also embraced our full range of solutions, the Conservative Plan would have real potential to tackle Canada’s housing affordability crisis, and the generational tensions it creates.

Original Article