Grading Provinces on Housing: Who Earned an A and Who Deserves Detention?
Hint: Onterrible lives up to its reputation
In this episode of the Missing Middle, hosts Cara Stern and Mike Moffatt break down his latest “home score” report, grading every Canadian province on housing. Atlantic provinces like New Brunswick and P.E.I. lead the way, while Ontario struggles, with high costs forcing young people to stay home longer, and many residents moving away. The grades are based on 36 indicators covering supply, affordability, suitability, and societal outcomes.
Mike also explores housing policies that help, harm, or have little impact, from inclusionary zoning to development charges. The episode highlights how some reforms succeed, while others fail, and why provinces can learn from one another. Tune in to see which policies actually work and what it will take to improve housing across Canada.
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Below is an AI-generated transcript of the Missing Middle podcast, which has been lightly edited.
Cara Stern: So, Mike, you’ve just released a report this week where you’ve put on your professor hat, and you’ve given every province a grade. First, I want to know which province is the best for housing.
Mike Moffatt: So number one is New Brunswick with an “A-”, P.E.I. also got an “A-”, just right behind it. These are provinces that are building housing. They have decent homeownership rates. You’re seeing lots of folks move out there. So overall, Atlantic Canada, particularly those provinces, is doing quite well.
Cara Stern: And what I actually really want to know is who’s the worst?
Mike Moffatt: Well, not surprisingly, it is Ontario across the board. Ontario is very challenged when it comes to housing. British Columbia finishes ninth, but it’s still well ahead of Ontario, which we gave a “D”.
Cara Stern: The first thing that comes to mind when you mention which provinces are doing well or not is that P.E.I. and New Brunswick, as beautiful as they are, people moving to the country don’t necessarily move to P.E.I. the way that they do to Ontario or even B.C. I wonder how much of it is just that the demand for housing is so much greater in some provinces versus others.
Mike Moffatt: Well, we do consider that, and certainly, some provinces have an easier set of conditions. Though I will note that a lot of Ontarians are moving out to Atlantic Canada and moving to Alberta. So those issues in Ontario have actually created demand in these provinces.
So far, they’ve done a reasonable job of being able to keep up with that demand, but it’s certainly something worth watching in the future.
Cara Stern: Okay, let’s get to how you came to these grades. You came up with a formula to assess each province. What did that look like?
Mike Moffatt: We had 36 different indicators that we used to assess housing performance, and we put them into five broad categories: The first are policies to help build supply. Our second category was avoiding policies that have negative or irrelevant consequences. The final three categories are outcome-based.
We looked at who’s building enough supply to support their population; how is each province doing on a variety of housing affordability indicators; and then we looked at what I call positive societal outcomes. So that’s looking at things like, “Are young people able to leave their parents’ house?” or, “Are people having to move out of cities because they’re getting priced out?” and those types of things.
So we had these five broad categories, and different provinces led in four of the five categories. It shows that some provinces do better at some things than others.
Cara Stern: I love that you called it the HOMES score. You had it as a nice little acronym. It was very clever. I really enjoyed that. How did you land on the methodology you used?
Mike Moffatt: We started by collecting over 100 different indicators related to housing policy or housing outcomes, but we really wanted to make sure that what we were assessing was related to the concept of housing as a human right, which is part of the federal National Housing Strategy Act. In Canada, we assess whether or not we’re meeting housing as a human right through a three-part test.
We look at whether or not those homes are affordable for the families living in them. We look at whether or not they’re suitable for the families that live in them. Do they have enough bedrooms to comfortably house the number of family members and the composition of the family? And then, third, we look at whether they’re adequate, which is basically, do those homes need major repairs?
We looked for indicators that we believed had some form of relationship with those three core housing needs measures, and that brought the list down to 36. Then, once we had that list of 36 indicators, we divided them into five broad buckets.
Cara Stern: One of those categories was avoiding harmful and irrelevant housing policies. When I saw that, I rolled my eyes a bit, and I was like, “Oh my God, we still have those? Why haven’t they fixed it yet?” How is it that so many years into a housing crisis, we still have policies on the books that are actively harming efforts to make housing more affordable?
You’d think that politicians would just look at some of the evidence of their policies and maybe look at which policies are actually doing the opposite of what they want it to do. What kinds of policies are in that category?
Mike Moffatt: So overall, when we started having, looking at all of these policy-related indicators, we had a fairly long list. What we kind of determined is that they were really kind of falling into two categories:
There were a bunch of positive things where they made good reforms, like legalizing multiplexes, allowing for single egress buildings and things like that.
But we also had a lot of negative things that governments were doing. Some of them we would classify as negative, like high development charges, high land transfer taxes, that kind of thing. Then others, which couldn’t really be justified by the evidence. So they don’t really seem to be accomplishing much. Those were things like vacant home taxes and so on.
Now, those were given a fairly light weight in the index, but we wanted to test whether or not provinces that put those policies in place had better or worse outcomes than provinces that didn’t.
Cara Stern: What did you find?
Mike Moffatt: Overall, the provinces that have these irrelevant policies do actually perform much worse. But there’s a causality issue here. It might not be that those policies are making housing worse, but rather that places that have really bad housing crises are more willing to try those policies as a solution. So we didn’t test for causality, but we did notice a linkage.
This is the kind of thing we want to watch in the future. If provinces that implement these types of policies start to have better outcomes, then we might think, “Okay, actually these policies are working.” So part of what we want to do with this report card is release it each year and then see, “Okay, what seems to be helping and what seems to be harming.”
Cara Stern: I wish that politicians would also go back and be like, “Hey, that policy we put in place, what’s the impact it’s having?” And it’s very annoying that it seems like they don’t. You have things in there like vacant home taxes, as you said, and foreign buyer taxes, short-term rental prohibitions.
A lot of people look at the housing prices, and they go, “It’s so unaffordable. What can the government do to make it more affordable?”
These seem like some of the first policy solutions that people tend to come across. They’ll say, “Oh, you know, people are buying up homes and treating them as stocks, and they’re not even renting them out. So look how many empty homes there are. There’s no supply crisis. Just fill the empty homes!" Or, “So many of them are being used as Airbnbs. Just let those be long-term rentals, and we’ll have enough rentals.”
Interestingly, you found that those aren’t actually working. It’s kind of counterintuitive. Is it a problem if they are irrelevant, if they’re not actively harming the situation? You said that vacant home taxes are kind of neutral.
It’s not making it worse. It’s not making it better, but at least it takes away that concern people have where they go, “Oh, there are all these empty homes. Maybe we could just tax those, and they’ll go away.”
Mike Moffatt: Well, that’s in part what we wanted to test, because there are two schools of thought when it comes to these policies that we deem as irrelevant. The first is that it allows governments to do these things, and then when they don’t work, it permits them to do bolder reforms, so it’s the first step in going bold.
The second school of thought is that it actually crowds out more useful policies. Governments could say, “Well, we don’t need to legalize multiplexes because we have all of these open apartments and/or vacant apartments. If we simply put in a vacant homebuyer’s tax, then we won’t need to build more.”
In part, we wanted to test that theory, and it turns out that there’s actually not that much of a relationship one way or another between doing helpful policies and doing irrelevant policies. Some places, like British Columbia, for example, do a lot of both, whereas you’ve got some places that will do some of one and some of the other.
Cara Stern: You had one in there that, when I read it, it’s one of those policies that makes me really frustrated. That’s inclusionary zoning. When Toronto put it in, I was arguing with city councillors. I remember at the time saying, “This is going to make it worse.”
Inclusionary zoning forces developers to build below-market units, and that means that if they’re building, “Yeah, you can get approval for this building, but this many units have to be below market.” The way that they make it work typically is that the people who are paying full price will have to subsidize the cost of building for the people who are paying below market.
That seems really unfair, because a lot of the people buying these homes, especially condos, are first-time homebuyers. Why are we forcing them to subsidize the people who need the below-market units when it’s a societal good to have units for people who wouldn’t be able to afford market prices? We still need homes for them.
So I find that policy very annoying, but what I always heard back from city councillors was “Developers make enough money. They make a very healthy return on these things. They can just take it out of their profits.”
In reality, it seems like the evidence is showing that it either, like I said, goes to people who are paying for the full price market units or at its worst, it’s just making a project no longer make financial sense.
I know that there’s so much evidence out there showing that that’s what happens when you put it in place. I know there’s a study looking at places that implemented it like in California, for example, that showed that it did increase the prices of the market price units.
I’m trying to understand why politicians still implement these bad policies. With inclusionary zoning, I get they might think, “I want to be inclusionary. That sounds great!” But apart from that, I don’t know why they still do it. Any idea?
Mike Moffatt: Let’s be clear, it’s not developers that end up paying for that. Those costs get passed along. But doing affordable housing that way does two things. One, it means that you’re not paying for affordable housing using property taxes. So it keeps property taxes low.
The second thing it does is it makes market-rate housing more expensive, which benefits existing residents. It’s basically a transfer of wealth from new buyers and new renters to existing homeowners by keeping their property taxes low, but also juicing up the value of their existing properties. You can see why cities like to keep homeowners happy, and this is a policy that accomplishes that.
Cara Stern: I want to move on to the parts that have positive societal outcomes because I was like, “Yay, things that are going well,” that’s so nice to hear. Because we have a lot of complaints here at the Missing Middle. It’s nice when there are positive impacts from policies.
Within that measurement, you did something where you looked at the proportion of 25- to 29-year-olds who were living with parents, as well as 30- to 34-year-olds. Why did you divide it up that way?
Mike Moffatt: Well, we wanted to look at two different categories, because you do have somewhat different dynamics. Overall, we do see that places where housing is unaffordable — places where people are living in over-cramped homes — you also see young people living with their parents longer. It does correlate well with all of these core-housing-needs indicators.
Not surprisingly, Ontario has very high rates of young people living with their parents because it’s just very expensive to move out on your own. We think that’s important to look at; it’s detrimental for society to force young people to stay at home that long.
It’s one thing if they want to. Absolutely. But it’s another thing to force them to have to continue living with their parents and make it impossible for them to form their own families because we’ve priced them out of not just owning a home, but also renting a home.
Cara Stern: So you’re saying that you’re looking at policies that you hope will have a positive societal outcome, but unfortunately, in Ontario, we’re not there yet. We’re still having these negative outcomes, which are people being forced to live at home. Can’t move out on their own, can’t move where they have to move for jobs, that kind of thing.
Mike Moffatt: In general, Ontario performs very poorly in this category. So we have a bunch of different indicators in this category. One is: are people moving to the province or moving away from the province? Well, on net, large numbers of Ontarians are moving to other provinces, in part because they can’t afford housing.
We look at the major metro in each province and go, “Okay, are people moving to that major metro, or are they moving away from it?” In Ontario, people are moving on net out of the GTA because they’re getting priced out of the GTA.
We look at the proportion of young people who live with their parents. That’s high in Ontario. We look at the proportion of young people who are starting families, which is also very low in Ontario. We look at the homeownership rate, low in Ontario — not the lowest, but low in Ontario. We look at the proportion of people who live in homes that are too small to house their families. That is also a problem in Ontario.
So, across the board, Ontario performs very poorly in the category that has any societal outcome you can think of related to housing. We’re just not good at it in the province.
Cara Stern: It’s so frustrating. I feel like we’ve done so many episodes where we’re like, “Why is Ontario so bad?” What it feels like to me is that it comes down to the provincial government just not making this a priority. They aren’t listening to the evidence that shows what can make things better. They’re not actually trying that hard to make things better.
Mike Moffatt: Yeah, absolutely, and that’s one of the values of this report card is that we can look at all the relationships between these policies. Ontario has very high development charges. Our cities have very long approval processes. We have very restrictive land-use rules, which make it hard to build housing.
Now, some of those are run by municipalities, but as we detail in the report, municipalities are creatures of the province. They work under whatever regulatory environment the province wishes to give them. Ontario has been tinkering around the edges, but we haven’t seen the kind of transformative policies that we need.
I will say, not that I’m looking to defend the Ontario government, but this has been a bipartisan problem in Ontario, where successive provincial governments have just been unwilling to take the types of reform necessary to have a functioning housing market.
Cara Stern: It’s so frustrating that you could see this coming down the pipeline for so many years beforehand. There were so many experts who were saying, “We’re on a bad track here. It’s going to be really bad.” Yes, I guess you’re right — with this current provincial government, it’s really become quite acute. It’s become so much worse.
I know a lot of people look at the federal government, too, and say, “Look, it’s gotten so much worse under the Liberals and so much worse under the Ontario PCs.” Maybe they are making it worse. I don’t know what it would be like in an alternate universe where they swapped and were in charge of the different levels of government, but it does feel like it’s something that we could have avoided. It’s just a series of policy choices.
As you said, municipalities are creatures of the province. The province could override the municipalities. I always think municipal politics is very responsive to its local constituents in a way that if you’re making a provincial change, you don’t get affected in the same sort of way. Not in that direct way where councillors are going to the neighbourhoods where these people are living, and they’re mad about the six-plex that’s going up — or a duplex, frankly, that’s going up in their neighbourhood.
If you’re doing it across the province, I think it has a lot less of a chance of being a political problem. So I’m so frustrated that they haven’t done it yet. I’m just like, just change it! Make it better! We know what works. We know what’s making it worse, fix it!
Mike Moffatt: Yeah, absolutely. The province could absolutely set minimum zoning standards. For instance, they can make large wholesale reforms in how we fund infrastructure to get development charges down.
There’s a lot that the province could do, and in part, that was kind of the genesis of the report card. The motivation for this report card is that the federal government gets a lot of scrutiny on its policies. We actually think it needs more. We don’t pay enough attention to federal housing policy. But we also want to make sure that we’re not letting provinces and municipalities off the hook because they can and should be doing more.
What we show in the report is that there are things that each province can learn from another. No single province excels at everything. Hopefully, one day, when we do this report again, everybody is getting an A- or better.
Cara Stern: When you’re putting this research together. Was there anything that came across as completely unexpected from what you thought you’d see going into it?
Mike Moffatt: Yeah. So I was a little bit surprised that British Columbia didn’t perform better. They have had several positive policy reforms, but that doesn’t seem to be translating into outcomes yet. Now, maybe it is just too soon. It’s going to take some time for these reforms to have a positive impact. So that was a little bit of a surprise.
I wasn’t that surprised to see Atlantic Canada do so well, just because we’re seeing fairly strong housing starts. These provinces historically haven’t had large housing shortages. They just tend not to get in their way too much. One thing that you see in Atlantic Canada isn’t that they’re doing all kinds of really bold reforms, but rather that they’re avoiding doing silly things.
For the most part, they don’t have development charges that are through the roof. They have approval processes that are fairly quick. There are some issues in Nova Scotia, in the Halifax region, but overall, Atlantic Canada does well because they get the basics right. I think there’s a real lesson there.
Cara Stern: I guess with B.C., they’ve made a lot of these big changes that should make it easier to build, but then we’ve been in a financial environment that is not so favourable to building new homes.
We’re seeing a lot of condos, and especially in Ontario, decide that they can’t build them at the moment. I wonder if in B.C., we need to wait for the financial situation to get a little bit better to see more homes go on the market. It takes time to build. I wonder if we’re going to look 3 or 4 years down the road when the housing starts have had a time to be completed. Will we see that those changes have actually made a positive impact? Do you expect that, in a few years, if we do this report again, you’ll see B.C. coming out really strong?
Mike Moffatt: Well, we’re certainly hoping, and that’s one of the reasons why we want to make this an annual exercise, because we want to see how provinces are changing their performance, and we’re trying to assess the causes of that.
I still have a lot of concerns about British Columbia, particularly when it comes to development charges, which are still outrageously high.
I think you are right that a lot of the slowdown in building that we’re seeing in Vancouver is due to those economic conditions. Unless costs significantly go down, we’re probably not going to see the housing starts recover that quickly in the province.
Cara Stern: Given that you’re planning to come back and do this report annually, what’s the single most effective thing a province can do to improve its grade next year?
Mike Moffatt: Well, part of what we’re looking forward to next year is seeing what grades go up the most, and trying to determine the causes of that. I believe the single biggest thing that provinces can do is fix their development charge system.
There is such a strong correlation between provinces that have outrageous development charges and all of these other issues around affordability and suitability of housing, and so on. So that I think is the most vital reform.
We might find out differently a year or two from now when we rerun this report and say, “Oh, actually, Saskatchewan did this thing, and it wasn’t really on our radar, but it seemed to really increase their performance.” So I’m excited to do this exercise again and see which provinces are improving and which are not.
Cara Stern: It sounds like the best thing you can do is build more homes. Come on, provinces, build more homes. That’s the key to solving the housing crisis. Just do it!
Thanks so much for watching and listening. And, as always, to our incredible producer, Meredith Martin.
Mike Moffatt: And if you have any thoughts or questions about harmful and irrelevant things, please send us an email to the [email protected].
Cara Stern: And we’ll see you next time!
Additional readings/Research Links:
2025 Provincial HOMES Report Card
This podcast is funded by the Neptis Foundation