CMHC says housing crisis relief could take 30 years

Canada’s housing affordability crisis may persist until 2055 due to lengthy planning and approval processes, according to a new report from the Canada Mortgage and Housing Corporation (CMHC).

Blacklock's Reporter says the federal insurer’s research found that obtaining municipal permits and completing planning takes twice as long as the actual construction of apartment buildings and townhouse developments.

“Canada has the capacity to build more housing than we currently do,” CMHC stated in a Housing Observer commentary. “But the real issue is how long it takes for these units to become available to low- and middle-income households.”

CMHC research estimates that from the initial planning phase to the full effect on housing affordability, the process can take up to 30 years.

“This timeline is far too long for Canadians seeking more affordable housing options now,” the report said.

Mathieu Laberge, CMHC’s chief economist, emphasized that the major delays occur before construction even begins.

“Housing construction starts with design and development, a phase that can take three to five years depending on the project,” Laberge wrote. “This includes drafting plans, completing necessary studies, and securing municipal approvals.”

Once approvals are obtained, construction itself takes one to two years for multi-unit housing, according to Laberge. “In total, it takes an average of seven to eight years to deliver a new multi-unit housing structure in Canada,” he explained.

However, the impact on housing affordability is not immediate, as it can take up to 20 years for new market supply to significantly lower prices or rents.

“In total, from project inception to the full effect on affordability, it takes 25 to 30 years,” Laberge wrote. “This timeline is simply too long for Canadians in need of attainable housing.”

Despite federal targets to restore affordability by 2031 through the construction of 3.9 million new homes, CMHC’s latest Housing Market Outlook indicates that the goal is unattainable.

The report forecasts a slowdown in housing starts, which numbered 227,697 last year. Canada has never exceeded 273,200 housing starts in a single year, a record set in 1976.

“To meet the government’s affordability target, Canada would need at least 650,000 housing starts annually, a number that is currently impossible to achieve,” CMHC concluded.