“Ambitious.” A “stretch goal.” A “moon shot.”Ìý
This is how players in the housing industry are talking about the housing targets proposedÌýby Prime Minister Mark Carney and his fledgling government. Within a decade, the Liberals promised on the campaign trail to increase housing production to unprecedented levelsÌý— aiming to create the conditions for a half-million new homes to be built each year.Ìý
In the thick of a housing crisis, industryÌýplayers welcomed the ambition of this goal. But builders, analysts and academics alike are skeptical of whether it’s feasible. They warn that a large swath of Canadian land is unprepared for housing, needing majorÌýinfrastructure upgrades likeÌýsewers and water systems, andÌýthatÌýjacking up the pressure too fast risks inadvertently inflating costs for labour and materials.
An analysis of annual housing growth dating back to the 1940s, compiled by University of pc28¹ÙÍøhousing expert David Hulchanski and analyst Richard Maaranen, shows just how high the Liberals are promising to climb. Housing starts have never risenÌýabove 300,000 per year and, based on recent growth rates, their data suggests the Liberals will need to create the conditions for nearly 193,000 more homes to be built per year by the end of the decade.
“It certainly can be achieved if one is very serious,” said Hulchanski, arguing it would require buildingÌýfar more nonmarket housing to augmentÌýstruggling private developments and address the deepest levels of housing need.
But to planner and economist Daryl Keleher, one of the biggest challenges will be ramping up construction without creating new bottlenecks in the supply chain and spurring inflation: “It’s like turning the Titanic around.”
The labour challenge
A key challengeÌýis a human one: who will build all these homes? Will there be enough electricians, carpenters, roofers and plumbers to spread across so many developments at once? While Carney’s LiberalsÌýhave suggested a wider adoption of prefabricatedÌýhomesÌýas part of theirÌýstrategy, industry players say skilled labour is a key part of the puzzle.
Jim Ritchie, president of homebuilder Tridel, says finding workers right now isn’t an issue as the market is sluggish. But as soon as activity picks back up,Ìýskilled labour willÌýbecome a hot commodity. “We will need the workers,” Ritchie said, pointing to immigration as one way the workforce has been increased in past.
KeleherÌýbelieves any serious boost to homebuildingÌýwill not only require more workers, butÌýmassive productivity gains in the homebuilding sector to avoid cost inflations.Ìý
“You’re going to have a real competition for the people who build the homes,” he said, as well as competition for materials such as lumber and steel, the cost of whichÌýis already a concern for builders amid the U.S. trade war.Ìý
The costing challenge
Right now, private builders are struggling to keep their existing developments chugging along, let alone start new ones. Housing analystÌýMike Moffatt noted preconstruction purchases have all but “evaporated” in the downturn.Ìý
“Just keeping pace, I think we should consider a victory,” he said.
Tridel’s RitchieÌýpointed out that their team currently has projects around Toronto, Mississauga, Markham and Richmond Hill in the pipeline. But they’re struggling, like many other builders, to get them over the finish line. In Richmond Hill, Ritchie said their planned development would primarily offer new two-bedroom terraced suites, looking out over a ravine.
“We would love to get going,” he said. “But today is not the day.”
To jolt the market, two things have to happen, Moffatt saidÌý— consumers needÌýto be able to afford the housing on offer, and builders need to see at least modest profits, otherwise development stays ground toÌýa halt. When the cost to build is higher than consumers are willing to pay, the market stops moving.Ìý
“Prices are going to have to fall,” Moffatt said. “There’s no way around that. There’s just too many people living with multiple roommates, or living in their parents’ basements, who historically would have had their own place by now.”
Moffatt arguedÌýelected officials should continue focusing onÌýbringing down the fees charged to builders. Lowering the cost to build was essential, he said, because developers need to demonstrate profit margins to qualify for loans.
This is where Hulchanski believes non-profit housing can play a bigger role. By backing non-profit developments withÌýpublic money, more housing projects can be insulated from economic blows. Those kinds of housing projects don’t, for example, require a certain amount of pre-construction sales before starting.Ìý
He sees that as a more fruitful path than banking on a major drop in overall home prices, suggesting politicians would be unlikely to bear a serious decline in home values, knowing it would upset existing homeowners.Ìý
“I don’t think the government will allow that to happen very long,” he said.Ìý
The land challenge
Canada’s preparedness for a firehose of new housing also depends on land. That means finding available space, whether vast open areas for subdivisions or infill space for condos. It also means ensuring infrastructure from roads to sewers are in place, or can be built out fast enough to meet the Liberals’ goal.
David Wilkes, president of the GTA-based Building Industry and Land Development Association, suggests this should be the first task on the federal government’s list. By making immediate investments in infrastructure, he said officials could lay the groundwork for a bigger housing expansion.
“To me, that’s a very big part,” he said, backing the idea batted around by officials at multiple levels of better using land already in public ownership.
Keleher pointed out they’ll need toÌýget started soon to meet their goals: looking at other large development and planning efforts, he suggested a minimum of three to five years’ work would be needed when an area needed serious infrastructure upgrades, such as a town that currently uses a septic or well system. Those upgrades are needed before housing can be built.
While chasing the ambitious target, Wilkes hopes to see deliberate moves to ensure the resulting housing is what Canadians want and need, rather than solely what is easiest to buildÌý— such as studio-sized condos that have historically gained considerable investor uptake.
He suggested governments at all levels implementÌýmore targeted incentives and exemptions for larger two-to-three-bedroom apartments, whether condominiums or purpose-built rentals, and invest in infrastructure to support lower-rise options such as stacked townhomes.
While he considers the Liberals’ half-million-home target as a stretch to the system, he’s glad to see the pursuit: “You never achieve anything without a goal.”Ìý
Correction - May 9, 2025
This article was updated from a previous version that misspelled the surname of Tridel’s president Jim Ritchie.Ìý
To join the conversation set a first and last name in your user profile.
Sign in or register for free to join the Conversation