One million one hundred and ninety thousand.
I’ll repeat it to you in numbers, for the sake of clarity: 1,190,000.
This is the number of housing units that would need to be built in Quebec by the end of the decade to return to a certain form of “affordability”, similar to that found at the start of the 2000s.1.
It’s not me who says this, but the Canada Mortgage and Housing Corporation (CMHC), the ultimate authority on housing in the country.
I won’t reveal anything new here: we are extraordinarily far from the mark.
Journalists are told not to put too many numbers in their texts, so as not to put off readers, but I would like to test the limits with this column.
So prepare yourself for a load of numbers, followed by a handful of solutions, to reverse the disastrous trend in housing starts.
If the current pace continues, an average of 41,250 housing units should be built per year in the province by 2030, or 330,000 in total, according to CMHC.
This is very little, and it is well below current and future needs for affordable housing, condos and other bungalows.
To bring the real estate market back to more reasonable prices, it would be necessary add to this number 860,000 units by the end of the decade, predicts CMHC.
It would therefore be necessary to create at least 148,750 new housing units per year, for a total of almost 1.2 million additional units, by 2030.
This is an ultra-ambitious goal, unrealistic without a doubt. But the calculation is stupidly mathematical, with the expected growth of demographics and the economy.
The trend, as I wrote above, is going in the wrong direction. Directly south.
Housing starts are in free fall throughout Quebec, and even more so in Greater Montreal.
Desjardins Group expects 35,500 new constructions this year in the province, down 38% year-on-year, and 14,835 in the metropolis, down 39%.
The worst score in two decades.
The forecasts are almost as dire for next year, with 37,000 new constructions planned provincially, according to Desjardins.
We can do a lot more. It’s possible. This was seen as recently as 2021, at the heart of the pandemic, with 67,810 housing starts, a peak since the end of the 1980s in Quebec.
But there you have it, we’ve said it again and again: the market is no longer at all what it was two years ago.
Interest rates have exploded, as have construction costs, which has forced many developers to take a break, or even completely cease their activities.
The challenge of radically increasing housing starts will be “immense,” recognizes Francis Cortellino, economist at CMHC. “However, this demonstrates the importance of having the involvement of different stakeholders in order to find solutions to this lack of supply. »
There are several possible solutions to speed up the pace. None is magic, but some immediately appear more effective and easily applicable than others.
Here is a first, which is common sense: we must stop putting obstacles in the way of manufacturers who propose good projects.
Here is a fresh example of unnecessary pitfalls:
The Rachel-Julien group purchased a large plot of land in the Hochelaga-Maisonneuve district of Montreal in 2019 with a view to building 1,008 apartments. The enormous project ticks all the right boxes. It plans condos, social housing, an affordable component, a medical clinic, a daycare, a grocery store, greenery, etc.
But now, the project was shuffled from one authority to another, it came up against opposition from a handful of neighbors, and delays piled up while the housing crisis worsened.
Rachel-Julien finally obtained her building permit for the first phase of 210 housing units… five years after acquiring the land! The first units will be delivered in 2025, seven years after the purchase of the lot, a delay which will have cost the developer 7 million, in pure waste.
It’s a scandalous waste, but let’s instead look towards the horizon, where an end to the crisis could emerge.
Economists Hélène Bégin and Maëlle Boulais-Préseault, from Desjardins, propose several very concrete measures to increase the housing supply2. Their suggestions are addressed to municipalities, Quebec and Ottawa, often all three at the same time.
Here are the measures that they believe would have a “high” impact in turning the tide:
- Minimize project approval times;
- Modify zoning to increase building density;
- Review consultation processes to no longer allow a handful of citizens to block projects that are in the interest of the community;
- Encourage construction with various tax measures and other incentives and subsidies;
- Better coordinate assistance measures from different levels of government to build affordable housing;
- Replace development fees imposed by several cities with tax incentives;
- Convert more existing buildings into student accommodation.
These are all excellent suggestions that deserve to be examined with a giant magnifying glass by our decision-makers. And applied to the most sacred.
Debureaucratization is possible and should become the standard to aim for at all levels of government. We saw this with a recent example of student housing in Montreal3.
In the (tiny) good news box, we can expect significant reinvestment in affordable housing. Quebec will double the amount of 900 million expected from the federal government, and details will be announced in the budget update on November 7.
The Legault government is also considering giving more powers to municipalities, I learned, to allow them to more easily impose the densification of certain neighborhoods.
This is promising and desirable. It will be necessary to multiply this type of measure, in all directions, to achieve the beginning of a recovery in construction starts.
1. CMHC defines affordability as “the share of after-tax income that a middle-income household should spend on the purchase of an average home.” Its goal, by 2030, is to “return affordability to levels last seen around 2004, before the start of the price growth that much of the Canadian population has experienced for more than 10 years.”