According to a study conducted by the Fraser Institute, more than one in four urban neighborhoods in Canada experienced a decline in housing units, even as many cities across the country struggled with housing shortages. The study, titled “Making Room for Growth, Housing Intensification in Canada’s Cities,” highlights the fact that despite policymakers recognizing the need for more housing, some cities are actually seeing a decrease in housing units in a significant portion of their urban neighborhoods.
The report emphasizes the need for Canada to address the housing supply issue, offering two possible solutions: spreading outward by building new neighborhoods on the urban fringe, or becoming more dense by allowing more homes to be built within existing neighborhoods, a process referred to as “intensification.” However, the study reveals that a large portion of the urban landscape has witnessed little to no increase in housing units, and in some cases, a decline.
From 2016 to 2021, over half (54.2 percent) of Canada’s housing stock growth occurred in existing urban neighborhoods rather than in unused and undeveloped land. This indicates an imbalanced pattern of growth in housing stock. The report notes that this uneven growth pattern is consistent across most major metropolitan areas. It suggests that Canada requires new housing supply in all types of dwellings, regions, and neighborhoods to address the acute housing shortage.
Furthermore, the study reveals that 50.9 percent of new housing units in pre-existing neighborhoods were constructed in just 5 percent of urban neighborhoods. In major Canadian cities, half of all neighborhoods experienced less than a 1 percent increase in the number of new housing units, and 26.4 percent of communities saw a decline in housing units, resulting in a net loss of 33,723 dwellings.
According to Steve Lafleur, a senior fellow at the Fraser Institute and co-author of the study, the growth in new housing units across Canadian cities is primarily concentrated in small pockets. To effectively tackle the housing shortage, policymakers need to focus on creating a more diverse range of housing units across urban areas, rather than only in select neighborhoods.
The study also highlights that 89 percent of new housing units added within cities were built in the top 20 percent of fastest-growing neighborhoods between 2016 and 2021. This concentrated growth in housing raises concerns about the accessibility and affordability of housing in other neighborhoods that are not experiencing significant growth.
The report further mentions that the Canadian Mortgage and Housing Corporation estimates a housing deficit in the millions, indicating a severe shortage of housing units. It suggests that intensification is the only option for some municipalities, particularly those that have exhausted their geographical jurisdiction or face geographical barriers to outward expansion.
The study also indicates that many provincial governments have implemented policies that limit outward expansion, further supporting the necessity for intensification in certain areas. In conclusion, the study highlights the urgent need for Canada to address its housing shortage by adopting comprehensive policies that encourage housing growth in all types, regions, and neighborhoods across the country.
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