The Current - Mark Carney promised affordable housing. Will he deliver?

Episode Date: May 20, 2025

Prime Minister Mark Carney pledged to tackle Canada’s housing crisis, but his new housing minister says that won’t mean reducing house prices. Matt Galloway asks housing experts to unpack the new Liberal government’s strategy, and unpick the “Gordian Knot” of whether Canada can create affordable housing without prices dropping?

So lately, I've been really blown away by how locked in Canadians are to political news. I'm Jamie Poisson, host of the daily news podcast Frontburner. And while the election's over, that does not mean that people are done with politics. Quite the opposite, really. So if you're curious about how our country will navigate this divided and crucial moment in our history, listen to Frontburner. We've got you covered on that and a wide range of other top-of-mind stories as well. Follow Frontburner wherever you get your podcasts. This is a CBC podcast. Hello,

I'm Matt Galloway and this is the current podcast. It is no secret that Canada's housing market is out of control. Home prices have tripled over the last two decades or doubled if you account for inflation, countless Canadians have given up entirely on the idea of home ownership unless prices come down significantly. Prime Minister Mark Carney campaigned on the promise of affordable housing, but his government faces a complicated challenge since the wealth of many Canadian homeowners is directly attached to the value of their homes.

Last week, newly sworn in Housing Minister Gregor Robertson was asked if he thought home prices needed to come down. I think that we need to deliver more supply, make sure the market is stable. It's a huge part of our economy. We need to be delivering more affordable housing. If he didn't catch that, the Housing Minister says no, he does not want to reduce the price of a family's current home, which for most Canadians is their most valuable asset, he says. So how can Canada's new Liberal government make housing cheaper without prices falling? To help make sense of this housing strategy,

we're joined by three people. Carolyn Weitzman is an adjunct professor and senior researcher at the University of Toronto School of Cities. She's also the author of Home Truths, Fixing Canada's Housing Crisis. Ian Underwood is the CEO of Habitat for Humanity, Greater Toronto area. And Andy Yan is an assistant professor of professional practice in urban studies and director of the city program at Simon Fraser University. Good morning, everyone. Good morning.

Good morning. Carolyn, is the housing minister right that people's wealth is wrapped up in the value of their homes and therefore you can imagine they would be concerned about that value going down, but that Canada can actually address the housing crisis without decreasing the price of homes? Well, I think the housing minister is half right. I think absolutely it is a huge dilemma that I don't have an easy solution to, which is that home ownership in particular across Canada is about three times more expensive than what a middle-class household can afford. Four times as expensive in Toronto, five times as expensive

in Vancouver. So either the housing minister is reconciling himself to an entire generation of folks not being able to afford homes in their lifetimes or there's a difficult dilemma. Absolutely we need more supply. Absolutely we need more right supply that meets the needs of low and moderate income people as well as middle-income people. But yeah, house prices or at least putting everybody's investment or the vast majority of people's investment in one basket, which is called constantly increasing ownership prices, hasn't worked for Canada.

Just, I mean, I want to pick up on that very, very briefly. If there's more supply, is that not going to decrease the price of homes? Yes. decrease the price of homes? Uh, yes. Uh, so we see that in, that, that rents have gone down, uh, 5% in Toronto over the last year, about, uh, 3%, I think in, uh, Vancouver, but rents are about twice as much as what a moderate income household can afford.

So absolutely there needs to be more two and three bedroom apartments for rent. There needs to be more, um, a home ownership, uh, options, but those home ownership options are how going to have to come in at about $300,000 or maybe $400,000 to be affordable to middle income people. And that's really hard to imagine at this point.

So I think we're going to be reliant on rental with a lot better renter rights for the foreseeable for a lot of households. Ian, how do you go about striking that balance between protecting the equity that homeowners have and getting people back into the market. This is something that you addressed when you were part of our town hall on housing in the Weston area of Toronto and you talked about the fact that some homeowners may have to make sacrifices if they want to see their children or grandchildren be able to get into

the housing market. Yeah, it's a, this is what you call a Gordian knot of housing, right? Because when you divide Canada up, we arguably have three different kind of audiences that would think about this. My generation is thinking, hey, I own my home, the mortgage is paid off, I'm counting on this for various retirement plans. Anyone in their 20s and 30s is absolutely saying home prices need to fall. And people that bought a home in the last five years or so are terrified of home prices falling because of how much debt they have and they're going to end up with

more debt than the value of their home. So, absolutely, this is a Gordian knot. Part of the way we untangle it does begin with conversations like this, with helping Canadians better understand, especially Canadians of my generation, some of the trade-offs and the things that need to be different in the future. I think though, the most important part of this conversation is how do we get homes

to be more affordable for the next generation? Predicting exactly what will happen with home prices How do we get homes to be more affordable for the next generation? Predicting exactly what will happen with home prices is virtually impossible. When you think of it, back in 2000, no economist said, let's make sure we're getting home prices to be absolutely unaffordable for the next generation. No politician, no one intended for this to happen. No one predicted this would happen. And so similarly, it's very difficult to predict exactly what will happen with prices

as we put in remedial measures. But the important conversation is what are those remedial measures that we need to get on with? Can you just very briefly give a definition as to what affordable in that context means? What is affordable housing in 2025? Well, this is a challenge. It depends on who you ask. So 10 years ago, 12 years when I became CEO at Habitat for Humanity, affordable housing was really something we talked about for the minority of the population because the majority of the population could afford to rent or buy a home.

Now we are in a situation where middle income Canadians in almost every part of this country cannot afford a home. So we are, I think in the world Carolyn and I live in, we talk about below market housing and deep affordability for people who are farthest away from being able to rent or own a home. But there is also, we have to figure out how do we get middle income Canadians that may be in their 20s or 30s being able to afford a home. So it's now a spectrum of what do we mean when we say affordable housing and housing

affordability. Andy, and let's bring you in and I want to bring you in specifically to talk about Gregor Robertson's track record on housing. You have covered him when he was the mayor of Vancouver. How did he do? Well, I think that it's really a mixed legacy, that it's an era of crafting the narrative that Vancouver is with the intention of becoming the greenest city

on earth, really, I think is really questioned towards being a better city. Was it a better city that he created for many Vancouverites? I think that there were, I think, tremendous challenges in terms of housing, in terms of how he understood the assignment, how he, I think, really avoided deeper conversations around financialization and the role of foreign capital. And I think it really is interesting to kind of see

what's going to happen as he moves forward as the Minister of Housing, how much Vancouver becomes either say a book of cautionary tales or an operations manual. Presumably he was picked for a reason. I mean, when you take a look at his track record, is there evidence that he understood that assignment and that this assignment now of addressing the housing crisis is something that he understood that assignment and that this assignment now

of addressing the housing crisis is something that he can draw on when it comes to his own experience? Well, I think the same issue is that it's a mixed outcomes. It's really coming into really how well did he adapt towards not only looking at supply, but then looking at demand and finance measures. I think that it's really challenging to kind of see the other focus on supply, but yet not being very specific, not looking into the details of supply for whom. And I think that this is really where he was able to accomplish some things in terms of increasing the development of rent, incentivizing rental development

within the city of Vancouver, creating the empty homes tax, but then at the same time, see homes really go up to almost 18 times income to housing values. So I think that it's really a mixed outcome when he was mayor of Vancouver. And was that his fault? I mean the conservatives are saying look you put a housing minister in who under his watch the price of housing became unaffordable in the city of Vancouver. Can you pin that on him? Well I thinkenfeld Well, I think that it's interesting because, of course, Pierre Pauliev was in power. We have similar actors, but in different roles today. And I think that it's really not necessarily one that you can pin all of it on him. But yet, at the same time, some of the decisions and the

choices he could have made, I think, did make the situation better for some, but yet at the same time, some of the decisions and the choices he could have made, I think, did make the situation better for some, but yet at the same time, also avoided really dealing with some of the hard questions when talking about housing. We heard the... Sorry, go ahead. Yeah, Carolyn, go ahead. Sorry, I was going to say, I think if I may, the other thing that I think... I don't know Gregor Robertson, but what is powerful about putting a municipal leader, mayor, former

mayor in that position is the reality is it's at the municipal level that is decided what, where and how much housing gets built. These are the gatekeepers that Pierre Poliev has railed about saying that they are the ones who are preventing housing from being built. Well again they have one piece of a three-level of government puzzle, and their puzzle is what gets built. And so having someone now at the national level that has that experience and vantage point and now can pull the monetary and tax levers at the national level, I think can be a powerful equation to draw on the experience from the municipal to inform the national.

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You know about the practical elements here. We heard this at the beginning of the conversation, the Prime Minister saying, you know, we're going to build, baby build. The Liberals target is to build 500,000 homes a year. Is that realistic, Ene? History says, history leaves a big question mark on that, but the fact of the matter is we are in the, we're going the opposite direction right now as a country

or certainly in the GTA where I am, where we're having fewer homes built than before because of things like government fees and taxes, which this government has made a big commitment to really ratchet down. And because of things like the approval process, et cetera. So the first thing is let's just reverse the course of starting to get more homes built, more rental homes and more ownership homes as well. We're at the lowest level of ownership homes that we've been in in about 20 years.

So we need both of those to get into a very different gear. Karen, I can hear you in the background. Go ahead. Yeah, I just want to jump in. I mean, obviously, I, Ian and Andy and I all know one another and substantially agree in a lot of ways. I think that there are examples of where governments have been able to ratchet up housing supply. I think of Sweden, which in the 1960s created a million home program for a country that then had eight million people and indeed built a million homes in a decade said it couldn't be done.

But that takes a level of government intervention. As Ene said, there are so many roadblocks right now created by zoning and by building code and also by the federal government's stubborn unwillingness to talk about the fact that it's nonprofit housing like Habitat for Humanity, like supportive housing, like co-ops that are necessary to meet the needs of low and moderate income people. And they're developers just like anyone else, so they need better zoning, quicker approvals, probably some form of factory-built housing, which was very big in Sweden in the 60s. But they also have a mission to provide the social good of affordable housing as opposed to seeing housing as a source of profit, which is part of the problem right now as Andy said, it's financialization,

which simply put is housing as how much money can we get out of it as opposed to housing for where it's needed at the price that it's needed. Andy, Mark Carney has said the government will get back into housing, specifically around investing something like $25 billion in modular home construction. And this is something that Greg Robertson has some experience in Vancouver. Just for people who don't understand that, can you just quickly explain what modular homes are? Modular housing is basically factory built, housing you can build in a factory and then similarly deliver to a site and then place it onto a site.

It's a really interesting kind of evolution of building technology through which it's meant to be more cleaner, it's meant to be more efficient towards building housing quickly. But then I think just to quickly touch upon one point is that you got to remember, Gregor Robertson actually had 9,800 housing starts in 2016 when he was mayor. And I think represents an absolute high watermark in terms of just units being started in the city of Vancouver. But yet at the same time, the question is what are these units and who can actually all afford them? And that one has to be, I think, critical in terms of just talking about just purely about a supply response. If you are looking at those sorts of modular homes and you're able to build them faster, is that Andy going to help address, I mean, part of this is about the pace, that people

want an acceleration in the pace of homes being built. Is that going to help address the root of this crisis? I think this is something where we do need a tool kit is that it's not just one solution. I think that in certain parts of the country, I think that this can certainly, I think, provide one of those answers. But I think that there's a great line from Toy Story

that happy families are happy for similar reasons, unhappy families are for very specific reasons. And I think that this is probably one of the challenges in housing, how housing is unaffordable and why it is for different reasons across the country. Carolyn, are the modular homes a way to help make a real dent in this crisis? Yes, but the question would be which modular homes

developed by whom and provided by whom. And where would they go too? Absolutely. And this is where Gregor Robertson comes back again, because at one level he created 660, I believe, modular homes, supportive homes for homeless people in central Vancouver, where they were absolutely needed. But they were on land leases that allowed them to be treated as temporary, and now many

of those buildings are being torn down, not because the buildings aren't structurally sound, but because they are being displaced for art gallery in one case, basically higher profit uses in other cases. So modular housing can be great. In Quebec, it's scaled up, non-profit student housing. In Vancouver, in this example, kind of spread out across Canada, it built supportive housing, but then you need the health and social services for supportive housing, which comes from the province. So absolutely, factory-built housing can be a game changer, but it's not just factory-built housing. It's a whole structure of doubling non-market housing and sort of

having a much more targeted approach. We just have a few minutes left. And so where, I mean, the government been in place for just a couple of weeks, the throne speech hasn't even been made yet. The plans are still coming together. But what will show you, and I'll start with you Carolyn, what will show you that the government is making real progress on this crisis? Yeah, I have a pretty simple answer to that. There is a pretty straightforward definition of affordability, which is not more than 30%

of pre-tax household income. That's what CMHC is used not in its programs, but in calculating needs, etc. The question is, what's the finance program, the long-term low-rate finance program that's going to allow affordable housing for low and moderate income people to flourish. We still aren't there. We still don't have a finance system that will allow governments to have a sustainable source of finance where payments go back into that fund. Denmark has it, Finland has it, Austria has it. That's the kind of finance decision. So it really matters who the finance minister is and what he, in this case, is going to do as much as what the housing minister does.

And you call this a Gordian knot. What will show you that that knot is starting to be unraveled? Well, I think it'll come back to the world that I live in, which is the below market, affordable housing, and specifically affordable ownership. And so for me, organizations like Habitat for Humanity should be building four or five times as many homes as we are. When we do that, we enable people to move out of rental, getting the first step into ownership, building equity so they can then make a next step to eventually

become market homeowners. So I think that's what I'll be watching for because as Carolyn has said, if we can build more habitat for humanity, I mean, the fees are lower, the approvals are faster, that will be assisting the market builders in building faster and it will help us build faster and get more people into homes. Andy, last minute to you, what are you looking for in terms of actual tangible progress on this? Tangible progress, I think, will be, I think, a continuation of things like the rental protection fund on a federal level. I think that we're looking at towards the issue of financing as per looking at Carolyn.

I hope they also read Home Truths. I hope that they really move into, I think, understanding that it's supply, demand, and finance measures. I think that really then looking at continuing on collecting data, understanding that supply, demand, and finance measures, I think that really then looking at continuing on collecting data, having adequate data, starting to recount completions in the, to actually understand what we're doing. I think that there are still data measures through which the federal government could continue, certainly continue on, but then also reinvest in. We will talk again. This is such a pressing issue for so many Canadians and they want to see

real action. So we will reconvene this panel to see whether that action is beginning to unfold. Thank you all for being here this morning. Thank you, Matt. Critical conversation. Thank you. You've been listening to The Current Podcast. My name is Matt Galloway. Thanks for listening. I'll talk to you soon. For more CBC podcasts, go to cbc.ca slash podcasts.