The Canada Mortgage and Housing Corporation (CMHC) cautioned against building only low-cost rentals as a strategy to restore housing affordability. Blacklock's Reporter says in a report, the federal mortgage insurer recommended a mixed construction approach, including expensive rentals, as a more effective method for lowering overall housing costs.“Building only low cost housing isn’t optimal,” stated the Research Insights report. “Building only high cost housing is also not the most optimal solution.”The report emphasized the benefits of a balanced mix of low, mid, and high-cost housing. “This is because it makes homes more affordable and benefits most household types,” the report explained.Analysts highlighted the process of "filtering," where new housing units gradually transition from higher-income to lower-income households as newer units are built. “New CMHC research and international studies support filtering as providing more affordable housing,” they wrote.The report warned that focusing solely on low-rent buildings could reduce property tax revenues and push higher-income households out of neighborhoods. In contrast, mixed construction would naturally create affordable vacancies as “households with higher income move into newly built units,” freeing up former units for lower-income tenants.“When lower income households move into the newly vacated units they in turn create vacancies in their former homes,” the report noted, describing the phenomenon as a “vacancy chain.”Analysts pointed out that rents typically fall by 5% in the first four years after a building’s construction, adjusting for inflation. This decline reaches nearly 20% around the 20-year mark, making older buildings more affordable for lower-income families.This new research follows Housing Minister Sean Fraser’s testimony on September 27, where he opposed the idea of “building cheap homes” to address affordability.“I don’t want to be building cheap homes in a bad part of town that are exclusively for low income families where they don’t have access to the services they need,” Fraser told the Commons human resources committee. “I want them to be integrated into communities and have full participation living alongside people from different income backgrounds.”CMHC has estimated that Canada would require 3.5 million new housing starts, in addition to the average annual construction of 225,000 units, by 2030 to restore housing affordability. Cabinet's April 16 budget put the figure at 3.9 million new starts by 2031, with the Housing Advocate suggesting an even higher number.“Today’s systemic issues such as unaffordability and encampments happen because we don’t treat housing as a human right and public good,” testified Housing Advocate Marie-Josée Houle on June 13. “Our research estimates Canada is short 4.4 million affordable homes.”
The Canada Mortgage and Housing Corporation (CMHC) cautioned against building only low-cost rentals as a strategy to restore housing affordability. Blacklock's Reporter says in a report, the federal mortgage insurer recommended a mixed construction approach, including expensive rentals, as a more effective method for lowering overall housing costs.“Building only low cost housing isn’t optimal,” stated the Research Insights report. “Building only high cost housing is also not the most optimal solution.”The report emphasized the benefits of a balanced mix of low, mid, and high-cost housing. “This is because it makes homes more affordable and benefits most household types,” the report explained.Analysts highlighted the process of "filtering," where new housing units gradually transition from higher-income to lower-income households as newer units are built. “New CMHC research and international studies support filtering as providing more affordable housing,” they wrote.The report warned that focusing solely on low-rent buildings could reduce property tax revenues and push higher-income households out of neighborhoods. In contrast, mixed construction would naturally create affordable vacancies as “households with higher income move into newly built units,” freeing up former units for lower-income tenants.“When lower income households move into the newly vacated units they in turn create vacancies in their former homes,” the report noted, describing the phenomenon as a “vacancy chain.”Analysts pointed out that rents typically fall by 5% in the first four years after a building’s construction, adjusting for inflation. This decline reaches nearly 20% around the 20-year mark, making older buildings more affordable for lower-income families.This new research follows Housing Minister Sean Fraser’s testimony on September 27, where he opposed the idea of “building cheap homes” to address affordability.“I don’t want to be building cheap homes in a bad part of town that are exclusively for low income families where they don’t have access to the services they need,” Fraser told the Commons human resources committee. “I want them to be integrated into communities and have full participation living alongside people from different income backgrounds.”CMHC has estimated that Canada would require 3.5 million new housing starts, in addition to the average annual construction of 225,000 units, by 2030 to restore housing affordability. Cabinet's April 16 budget put the figure at 3.9 million new starts by 2031, with the Housing Advocate suggesting an even higher number.“Today’s systemic issues such as unaffordability and encampments happen because we don’t treat housing as a human right and public good,” testified Housing Advocate Marie-Josée Houle on June 13. “Our research estimates Canada is short 4.4 million affordable homes.”