An Initiative by the
It has become common place to hear from the public and news media how housing prices and rents are skyrocketing. Many Canadians aren’t sure if they’ll ever be able to afford their first home. In some Cities people are leaving in search of more affordable solutions.
Housing connects us all. And not enough housing affects us all. It impacts affordability and rental prices and hurts the most economically disadvantaged.
There is a solution: Canada needs more homes.
How a shortage of homes drives up prices
For decades, Canada has not been building enough homes. The countries population keeps growing (which is good), but the number of homes we build to house people hasn’t kept up. A shortage of housing supply combined with high demand means that the value of the homes that do exist go up in price.
The pandemic highlighted our housing shortage thanks to several factors. Many people wanted to move because their needs changed (e.g. they needed more space because they were now working from home, or they wanted to move to be closer to family). Many saved money because they couldn’t spend it on other things (like vacations), so they had more to spend on housing. And the low interest rate environment, which encouraged spending to help the economy rebound, also helped to offset those higher prices and make it mortgages more affordable. These factors combined in many parts of the country and resulted in rapidly rising home prices.
Now with interest rates rising, the flurry of activity has cooled. But that doesn’t mean that people no longer need homes, nor does it mean housing is now more affordable. House price growth has slowed, but buyers can’t afford as much due to higher interest rates. When people can’t afford to buy their first home, they stay in rental units. Then there are more people who want or need to rent than there are vacancies. And that’s when we see rental prices starting to go up.
It’s all connected. We need more homes, of all types.
Regina’s different outcome.
While Regina and the surrounding communities did see some price acceleration, it was minimal compared to most other population centers in the rest of the country.
This is the result of far less population growth then every other major City on the prairies. The 2021 Canadian Census data reveals that for every one person Regina grew by Saskatoon grew by 1.7 people, Winnipeg grew by 4.2 people, Calgary by 7.2 people and Edmonton by 7.8 people.
As other Cities experience significant population growth (increased demand) and new housing development (supply) not able to respond quickly due to local government slow response to application (zoning and red tape), then add the supply chain disruptions and interest rates and the cost of housing and rents have exploded.
Since Regina did not feel the full impact of these changes in the market or the population growth, we now have the privilege of have the second most affordable housing prices in Canada. If you are not living in Regina and area, consider moving here. It is a great opportunity to maximize your housing dollar.
Protect Regina’s Housing Advantage
To ensure Regina maintains its housing affordability Regina and area needs to ensure it always maintains a supply that is just a head of demand. It may seem obvious to many that when supply is just ahead of demand it takes pressure out of the market for dramatic price increases.
However, supply in Regina is not what people think it is. The Saskatchewan REALTORS® Association reported that supply in the resale housing market is around three months, which is low by historical standards. The Regina & Region Home Builders’ Association reports the number of serviced lots in Regina is below one year (a healthy market is 18 to 24 months supply).
If Regina sees a significant change in population growth in the near future, we too will see our own housing crises emerge very quickly.
What our community can do to support more housing supply
Building more homes is not as easy as it may seem. There are a lot of steps to go through, each one intended to ensure that our communities grow thoughtfully and with care.
There are barriers to getting homes built – and getting the right kind of homes built. Below is a list of common issues, and solutions.
- Processes: The steps to gain approvals to build new neighbourhoods and homes in those neighbourhoods can get bogged down due to onerous and/or inefficient processes, resulting in communities not being responsive enough to the urgent need for more homes.
Solution: Cities can reevaluate and streamline their processes so that they’re more efficient and can keep up with the workload.
- Development fees for new communities: “Growth pays for growth” approach to new development and new housing has resulted in very high Development Fees in Canada. In the end the new home buyer shoulders the entire capital cost of growth in the community, even though there are benefits for the whole community when that growth occurs. Newcomers, young families and individuals who purchase or rent new housing in our community should not have to carry the full burden of those cost to the community as a whole. It should not be our community goal to make the cost of new homes so unaffordable that the people who need to live here, can’t afford to.
Solution: Cities should make sure that new homeowners only pay for their fair share of development taxes, and not for benefits that new development brings to the surrounding existing neighbourhoods. Those investments should be made by the owner of the public infrastructure, which is the municipality.
- Nimbyism: It is not uncommon that members of the public who already own homes tend be vocally opposed to new developments and densification in their area that would allow others to live there (this is called NIMBYism. NIMBY = Not in My Backyard)
Solution: We all deserve a place to live. The good of a community and all its residents should be the priority. New residents make for more vibrant communities. We need concerted efforts to move to YIMBY (Yes in My Backyard).
These challenges continually slow down or stop the construction of much-needed housing supply in many cities across the country. To help, the federal government’s new Housing Accelerator Fund is being designed to offer support to municipalities that: grow housing supply faster than their historical average; increase densification; speed-up approval times; tackle NIMBYism and establish inclusionary zoning bylaws; and encourage public transit-oriented development.
Creating systemic change to enable more housing supply to come online faster will require municipalities to be dedicated to more supply, have support from their constituencies, and have funds to make the systemic changes. All municipalities should apply to the Housing Accelerator Fund to make this happen. We are pleased that the City of Regina is taking advantage of this Federal program.
What can you do to support more housing supply? You can help be part of the solution:
Push your local government: Get informed about how your municipal leaders are supporting housing supply. And call on your municipal leaders to take action. Ask them what they are doing to support more housing supply and ensure they are taking action to:
- Improve permitting and approval processes; ensure sufficient staffing
- Reduce development taxes
- Tackle NIMBYism
- Increase housing density near transit nodes
- Take advantage of the Housing Accelerator Fund to make this all happen
Support local housing supply efforts: Be supportive when your community grows, whether that’s increasing the density in your neighbourhood or building a new community nearby. Be part of consultations that will ensure growth inward, upward, and outward.
We all deserve a place to live.
Other articles and resources that might interest you:
- CMHC Housing Accelerator Fund
- Accommodating Growth Paper: The delicate balance between Greenfield and Infill Growth. E-mail s.niebergall@reginahomebuilders.com to receive a copy.
- smartergrowthregina.ca
- affordability.ca
- Myths and FAQs on housing affordability
- reginahomebuilders.com