Flagship report from RBC Economics offers pragmatic solutions to the housing crisis

Seven ways to fix Canada's housing shortage

TORONTO, April 8, 2024 /CNW/ - There's no issue that captures the attention of Canadians quite like housing these days. The challenges are well documented, and the pocketbook pain is being felt by more and more of us. The solutions? They can't come fast enough.

Today, RBC Economics and Thought Leadership released The Great Rebuild: Seven ways to fix Canada's housing shortage. The report looks at the factors that led to Canada's housing crisis and advances policy ideas to address it.

More than half - one million - of 1.9 million new households by 2030 will not be able to buy a home if affordability remains close to where it is today, according to RBC's research. Worst, more than 40% of the new households that can't buy a home will also not earn enough to afford rent at the market price.

"The current affordability crisis has been driven by a massive undersupply of housing in the face of booming demand," said Robert Hogue, assistant chief economist, RBC Economics.

"Canada needs to significantly grow its housing stock, especially rental and affordable housing, and it needs to do so quickly. Addressing this challenge will require greater collaboration between governments, industry and other stakeholders."

There is no single solution, but these seven actions offer the best path forward to bringing meaningful home price and rent relief:

1. Aggressively expand the construction sector's labour pool by prioritizing immigrant skills, recognizing credentials from other jurisdictions and setting ambitious targets for trade enrollments.
2. Develop and adopt innovative designs, building techniques and technology to boost productivity through prefabricated housing and pre-approved building designs.
3. Speed up housing project approvals by reducing regulatory requirements, harmonizing building codes and prioritizing projects with faster turnaround times.
4. Ease zoning restrictions to allow more density in cities and diversify the types of houses built to make more productive use of land.
5. Lower the cost of building new housing by using more cost-efficient materials and modulating government charges.
6. Change the housing supply mix with incentives to build purpose-built apartments by waiving development charges and using publicly owned land.
7. Expand the housing stock from within by reclaiming units from short-term rental businesses, making it easier to build secondary suites and convert non-residential buildings.

"We're working with Canadians across the country — homeowners, builders, policymakers — to help ensure home ownership remains part of the Canadian dream. Efforts will have to go beyond what's been done so far, and we hope these pragmatic ideas help rebalance supply and demand and do so in ways that continue to drive Canadian prosperity," said John Stackhouse, SVP, Office of the CEO, RBC. Read the full report here.

About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 94,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our more than 17 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.

We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.

SOURCE RBC

Kyle English, RBC, Economics & Thought Leadership, [email protected]