Last Thursday, the Institute for Socioeconomic Research and Information maintained that the solution to the housing crisis did not pass through the construction of housing by private enterprise. Today, a right-wing group claims the exact opposite.
“The construction of housing, regardless of the range, will be beneficial for society as a whole,” said, in an interview, Gabriel Giguère, author of a study by the Montreal Economic Institute (IEDM) on projects houses blocked or hindered by the Plante administration.
The think tank in favor of the market economy lists nearly 25,000 housing units that have not been built in Montreal since the election of the Projet Montréal party in 2017. “By preventing the construction of tens of thousands of units , the Plante administration is helping to make Montreal less and less affordable,” says Gabriel Giguère, in a press release.
This number represents the equivalent of nearly 50% of all housing starts in the city of Montreal from 2017 to 2021, reads the three-page note.1.
Most of the impeded or blocked projects have made headlines in the past: tower 6 of Square-Children, Bridge-Bonaventure, the Hippodrome and Pointe Nord in L’Île-des-Sœurs, for example.
The MEI study does not say so, but other municipal administrations are blocking housing projects, even in areas served by public transit or TOD such as Pointe-Claire.
The MEI study is in line with a report by The Press who exposed the situation in December 20222.
In this report, the administration defended its record by arguing that housing starts were increasing before 2023. Recently, the executive committee also created a facilitation unit to speed up the approval process for real estate projects.
Cascading moves
According to the MEI, the solution to the housing crisis and its affordability lies in the construction of housing, regardless of the price.
To support his statements, Mr. Giguère brandishes a study published in 2021 in the Journal of Urban Economics which estimates that for every 1,000 new homes built in the high-end category, 450 units become available in neighborhoods where the average income is below the median income, including 170 in neighborhoods where the average income is in the bottom quintile . “These cascading movements are felt relatively quickly,” says Mr. Giguère.
Based on the scholarly study that analyzed the situation in 12 American cities, the MEI estimates that the construction of these new units currently hampered or canceled in Montreal would have made it possible to free up at least 10,692 units in working-class neighborhoods, including 4,039 units in the most disadvantaged neighborhoods of Montreal.
The idea that the construction of high-end housing frees up cheaper housing does not meet with consensus, especially among elected officials. The mayor of Laval, Stéphane Boyer, has already said in the past that building housing units of $700,000 or more does not solve anything because it is affordable housing that is lacking in the market.3.
“It’s a narrative that we hear at the municipal level, recognizes Mr. Giguère. When you look at the statistical data, it doesn’t hold water. »
In the Montreal region, housing starts are down 50% after five months in 2023, while they are increasing in Toronto and Vancouver, underlines the researcher. Yet all regions are grappling with higher interest rates and construction labor shortages.