Canada’s housing affordability problem has long been blamed on interest rates, immigration and construction costs. A new Canada Mortgage and Housing Corporation (CMHC) study put harder numbers to those concerns, linking stricter municipal land‑use rules to both slower supply growth and higher prices across the country.
Drawing on responses from more than 400 municipalities, CMHC built a Municipal Land Use and Regulation Index as a proxy for how supportive and efficient local approval regimes are, including fees, timelines and planning requirements.
“When a city’s housing regulations become 10% more restrictive, house prices go up by about 14%, even after accounting for population, density, growth and other factors. The finding is statistically significant,” the report said.
To illustrate that gap, “cities in Ontario are, on average, 15% more restrictive than those in Alberta.”
Price pressures showed up clearly across regions. Among large markets, “Toronto, Vancouver and Victoria have higher average regulation scores. These markets also tend to have the most unaffordable housing in Canada.”
In the study’s table, Vancouver’s overall regulation score of 106 sat alongside a house‑price‑to‑income ratio of 14.18; Toronto’s score of 100 was paired with a ratio of 9.67, while Victoria’s score of 110 was linked to 10.04. By contrast, Québec City posted a regulation score of 75 and a ratio of 3.97.
Approval dynamics also mattered. “Canada’s most unaffordable markets see the strongest demand for rezoning, but tend to approve these at the lowest rates,” CMHC said.
Vancouver and Toronto both recorded rezoning approval rates of just 47%, despite their steepest price‑to‑income ratios. Provinces with higher approval rates, such as New Brunswick at 91% and Saskatchewan at 90%, showed materially lower ratios.
Longer planning timelines remained a recurring drag. “Approval times were found to rise with the size of a city, with other forms of regulation, and with more community opposition,” the report said.
CMHC warned that “a one log point rise in the regulation score is linked to a 1.6 percentage point drop in the annual growth of the housing stock,” a hit that compounds over time.
The data offered a baseline rather than a verdict. The survey used 2022 as its reference year, before many cities rolled out Housing Accelerator Fund‑linked reforms such as as‑of‑right upzoning and e‑permitting.
CMHC said these moves were “a positive step toward better land use policy,” but stressed that “cities will have to continuously look at their regulations, policies, and approval processes to ensure they support the housing outcomes they want to achieve.”
The new research landed as Ottawa continues to lean on cities to loosen local rules. Under the $4 billion Housing Accelerator Fund, applications that did not show flexibility on zoning rules faced an uphill battle, federal housing minister Sean Fraser previously said, urging municipalities to be more ambitious than their neighbours if they wanted funding.
The program’s second round, launched in 2024, required large cities to adopt four‑units‑as‑of‑right bylaws as part of their action plans – a direct attempt to chip away at exclusionary zoning and enable gentle density in established neighbourhoods.
Yet local politics remained fraught. Private lender executive Kevin Fettig argued that restrictive zoning often reflected homeowners’ desire to mitigate the risk of a decline in property value, complicating federal efforts to add supply.
CMP
No comments:
Post a Comment