CMHC’s revised housing affordability targets moves away from its original goal of restoring affordability to early 2000s levels in favor of a much less ambitious pre-pandemic benchmark. This shift surreptitiously makes the housing crisis appear more manageable, despite worsening housing affordability and market conditions painting a chilling picture.
What Changed: Updating the Definition of Affordability While Still Making it Look Out of Reach
In previously published supply gap estimates, the agency targeted restoring housing affordability to early 2000s levels by 2030. The latest report shows two significant changes: extending the timeline to 2035 and adjusting expectations to pre-pandemic (2019) levels.
The practical implications are stark: in Vancouver, CMHC’s current framework projects that if we can construct double the amount of housing currently being produced, the average household will still dedicate 71% of their income to homeownership costs by 2035—a figure the agency now considers an acceptable affordability target. In Toronto, the framework accepts a 59% income-to-housing ratio in 2035 as the benchmark for success.
The Challenge of Doubling Housing Production
CMHC’s strategy hinges on dramatically increasing housing supply. The latest report assesses the need for 430,000-480,000 housing starts per year—essentially doubling current production levels. This represents a significant escalation from recent trends, even during favorable market conditions.
Housing starts have grown across Canada from 168,048 in 2018 to 206,752 in 2022, a period that featured exceptionally favorable conditions for builders including historically low interest rates and high government investment through the National Housing Strategy. Current market conditions present greater challenges than those of five years ago, with higher interest rates and international economic uncertainty related to trade policy changes. The feasibility of doubling housing starts under these conditions merits careful consideration.
Beyond Supply-Side Solutions
CMHC continues to emphasize supply-alone solutions that have become central to Canadian housing policy discourse. However, this approach maintains limited attention to structural issues including speculation, financialization, and long-standing underinvestment in social housing.
Notably, the report provides limited discussion of non-market housing solutions, despite successful international models of mixed-income development and the international demonstrations of the role of social housing to help residents cope with rising living costs.
Implications of Accepting Higher Housing Costs
These revised targets effectively establish that housing costs between 60-70% of income as an acceptable standard for major Canadian cities. The policy implications are significant. The revised framework may allow governments to declare progress while substantial housing challenges persist. By normalizing housing cost burdens that would have been considered unacceptable in previous decades, the framework risks reducing pressure for comprehensive policy responses that address the root causes of Canada’s housing crisis.
Considering Alternative Approaches
Even by CMHC’s admission, it will take a decade (at best) to marginally reduce housing costs. Addressing Canada’s housing challenges may require expanding beyond supply-alone strategies to include comprehensive reforms such as robust public housing programs, measures to address speculation, enhanced tenant protections, and recognition of housing as essential infrastructure. For more detail, see advocacy by organizations like CHRA, BCNPHA, and CHF Canada.
