The cost to rent a home in Toronto and Vancouver is falling. At the same time, the construction of new homes – especially rentals – is in a multiyear surge, compared with before the pandemic.
The lesson is clear: new supply can make a difference in a housing market where the cost to rent and buy has shot into the stratosphere. But more supply is still needed. Governments must continue to do everything they can to speed the building of new homes, from loosening overly strict zoning rules and reducing too-high development taxes on the civic level to last year’s federal move to cut the GST from new rental housing.
Five years ago in Vancouver, a small five-storey rental building in Kitsilano, near downtown, was proposed. Twenty per cent of the units would be priced well below market rates. Local homeownersextreme opposition in 2019: “It’s like dropping the ghetto in Kitsilano.” City council eventually approved the project and the builder received a low-cost loan from the province. The apartments are finally ready next month. Opponents now criticize the market-rate apartments for being too expensive.
Over the past several years, Toronto and Vancouver have somewhat reformed the strict zoning restrictions against new housing, yet it is not nearly enough. Old obstacles such as the Committee of Adjustment need to be completely overhauled or simply abandoned.