Housing Triage: Do We Have to Choose Which Housing Crisis to Solve?
Young Canadians deserve better than a 2060 housing target.
Should governments focus on homelessness first, or can they tackle all aspects of the housing crisis at once? Cara Stern and Mike Moffatt discuss a proposal from the Federal Housing Advocate that sets a 2060 target for making housing affordable for all Canadians.
They debate the idea of “housing triage,” explore the links between homelessness, social housing, and market-rate housing, and examine why increasing housing supply is critical to improving affordability for everyone.
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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.
Cara Stern: When someone is critically injured, doctors see them first in the E.R. before seeing the guy who just came in with a broken arm. Well, can the same be said about housing? There’s some tension between housing advocates who see the crisis as a situation that requires triage, and others who think we can attack all sides at once: homelessness, social housing, and middle-class market-rate housing.
Mike Moffatt: Specifically, when governments are spending billions of tax dollars to work on solving the housing crisis, where is that money best spent? That’s what we were thinking about reading a recent report from the office of the Federal Housing Advocate.
Cara Stern: Here’s what they recommended:
End homelessness by 2040, i.e. functional zero homelessness.
End housing need among very low and low-income renters by 2050.
Ensure that all Canadians have access to an adequate home they can afford by 2060.
Mike, I know you’re itching to talk about those targets, but let’s start with this: what is the federal housing advocate and what are the goals?
Mike Moffatt: The role of the federal housing advocate is set out in the federal government’s National Housing Strategy Act, and this was a landmark housing policy that was set out in Justin Trudeau’s first term as prime minister.
Section 13 of that act lays out all of the responsibilities of the advocate. It basically creates the position, and they have this pretty broad mandate to provide advice and conduct research. The advocate is housed at the office of the Federal Housing Advocate and is paid for by the federal government. The person who holds the position is chosen by the Housing Minister. They serve a three-year term which can be renewed once.
Since I’m sure we’ll get comments on this—and feel free to leave some in the comments section—I’ve never applied to be the Federal Housing advocate, I have no interest in being the federal housing advocate, and I think the housing advocate is doing a good job given her mandate. So anything I say here is not sour grapes or me auditioning for the position. I think she’s doing a fine job.
Cara Stern: But we know you’d do the job well. We’re just happy you’re staying here. Do governments tend to follow their advice?
Mike Moffatt: I would say they have in the design of federal housing programs, and I think there’s a fair bit of value in the research that’s produced or commissioned by the office. I think the advocate is getting results, but if they’re not, then I say we abolish the position. Literally, the advocate has one job, which is to provide advice to advocate, and the position comes with a federal government salary in the range of $150,000 to $180,000. So it is really important that they provide value for money.
Cara Stern: So 2060 is the target for solving the housing crisis for people who end up with market-rate housing. That, of course, is the majority of people, so I get this is a big goal.
The report suggests basically doubling our supply of homes to reach affordability, and I understand that will take time. Even if you airdropped homes into unused or underused lands, it’s still going to take time to put in the infrastructure needed to support those homes, plus the time it takes to train the labourers we need and get all the materials we need to double our housing supply. Even though I hear 2060 and think, “What? No, that’s horrible,” at the same time, I do understand where they got this number from.
Mike Moffatt: Well, they don’t really explain that 2060 number, but we can certainly say that, yes, it will take a while. In fairness to the report, that doubling of housing start goal doesn’t come from the report itself, but actually comes from the Liberal Party platform during the last election via the CMHC, or their interpretation of a CMHC report.
With recent reductions to immigration and non-permanent resident programs, doubling housing starts by 2035 might not even be necessary anymore. We do have to make sure that we build not just enough housing, but the right type of housing, and that’s going to be a challenge.
Governments can always reduce demand further by paring back immigration or non-permanent resident programs if they need to, so there’s no reason why we have to stick to this trajectory—this doubling of housing starts—in order to meet middle-class housing needs. I would question some of the underlying assumptions that went into this 2060 estimate, again with the caveat that those assumptions aren’t coming from the federal Housing Advocate’s Office themselves.
Cara Stern: I totally get it. If you are trying to double housing supply in this country, I can’t imagine what a big project that would be. But obviously, there’s a big problem if you’re telling people they have to wait three and a half decades to get affordable housing—that’s basically a person’s entire career. I was thinking about that number and that’s past the point that people in high school will even be able to have kids. If they’re waiting for a home before starting a family, they might as well just give up now, unless they can access capital from family.
I do understand, though, that this report prioritized market-rate homeowners last. They were trying to solve the problems progressively. It followed this idea of the triage system for housing, where you solve the homelessness problem first, then you help low-income families, and finally everyone else who really should be able to afford market-rate homes that maybe need less government intervention or less government dollars going towards them.
Mike Moffatt: Yeah, and I could certainly understand the logic, though I think the idea of telling somebody in grade nine that they won’t be able to afford a home until they’re 50, which is what the math is here, is really problematic and troubling.
That aside, I also find the length that some folks will take this triage argument to be absolutely absurd. In my mind, it’s like asking, “What’s more important, healthcare or education?” and saying — let’s say we pick healthcare. “Until the healthcare system is fixed, we’re going to abolish higher education, get rid of the schools, and take all the money we put into the education system and put it into healthcare. Once we all agree that healthcare is fixed, maybe we can start to open the schools again.”
Even if we do that, let’s say we pick healthcare and go, “Well, what’s the most important healthcare issue?” We could look at mortality rates or whatever and say, “Cancer. Let’s put 100% of our research and healthcare dollars into cancer, drop everything else, only train doctors to be cancer specialists, and only do research on cancer. Celiac disease, diabetes, whatever else—you’re not getting a dollar until we cure cancer.” Then we ask ourselves, “But which cancer?” Given that lung cancer kills more Canadians than any other, let’s put all of our research dollars into that. Pancreatic cancer, breast cancer, testicular cancer—nothing for you. Let’s shut it all down, and let’s definitely shut down any health research funding for something that isn’t fatal.
It’s a ridiculous position. I absolutely agree that we need to make sure we get value for money, but what matters is where marginal dollars go and how effective those dollars are, not this absurd development of hyper-prioritization where we put all our eggs in one basket because we deem that basket to be the most important one.
Cara Stern: To be fair, all of those cancers can kill you, whereas there’s obviously a huge difference in how dire the situation is between someone who’s homeless and living on the streets, and someone who’s stuck in a rental when they’d prefer homeownership.
Mike Moffatt: There are a couple of things to keep in mind. First, if more ownership housing gets built, that frees up rental units, creates vacancy chains, and makes housing more affordable, which reduces homelessness. They’re not unrelated problems; they don’t come at the expense of each other. Solving the middle-class housing crisis helps with the homelessness issue.
But let’s go back to the triage idea. There’s also a big difference between someone who is homeless and someone who is struggling to pay their tuition. Do we cancel all supports for higher education until we solve homelessness? I hear this from the same politicians who say we’ve got to put our money into homelessness, and then they’re spending our money on soccer tournaments and renaming Dundas Square. If you’re going to use that argument, be consistent about it, but nobody ever is.
There’s this implicit assumption being made here that the opportunity cost is between one housing program and another housing program. If you put money into, say, reducing development charges, that has to come at the expense of anti-homelessness programs. That’s not how government spending works. Governments do shift the proportion they spend in one area relative to another all the time. If we cancel a housing program and say we don’t want to reduce development charges and we’re not going to put more dollars into that, that money doesn’t suddenly, magically go into anti-homelessness programs. My bet is it would be far more likely to go into something like Old Age Security than social housing.
Cara Stern: These housing crises are intertwined, though, so it’s not like trying to solve low-income housing problems. That would obviously have an impact on market-rate housing. There’s so much overlap in the way that you would attack these problems. The problem is when you’re trying to solve one and that comes at the expense of another—like when city councils implement so-called inclusionary zoning, where they push the cost of social housing onto buyers of market-rate homes, then you get a zero-sum situation. Ideally, a lot of the solutions overlap, like zoning issues and building code issues. If you fix that early, it’ll help across the board.
Mike Moffatt: Absolutely, and that’s the frustrating thing about this kind of triage argument: 90% of the solutions are the same. There’s no social housing building code, there’s no social housing zoning, there are no social housing sewers, or social housing electricians. If you fix one part of the housing system, it applies everywhere.
Ultimately, we need to build more homes. In any system with scarcity, money is always going to win—always. If there aren’t enough homes to go around, families with money are always going to outbid families without money, and you’re going to have homelessness regardless of how many social programs you have, because money always outbids not having money.
Cara Stern: That’s fair. I do think a big part of the expanded problems with homelessness that we’ve seen grew in tandem with home prices as they’ve gotten out of reach. But for low-income and social housing units, couldn’t the government just earmark them for people with the lowest income so that it doesn’t have people with more money outbidding them?
Mike Moffatt: You’d still have mass homelessness because you’re still going to have somebody on the wrong side of the cutoff for deeply affordable housing. If you have 100 families who need these types of homes and only five spots, you can allocate those five spots however you want. You can give them to the poorest, the tallest, or you could hold a draft lottery like the NHL. At the end of the day, you’re still going to have five families who win and 95 who lose. The mechanism doesn’t change that.
Overall, we need to build enough homes, otherwise money is always going to bid out money. Maybe they’re not outbidding the exceptionally poor; they’re just outbidding the very poor instead. The outcome is still largely the same.
Cara Stern: Honestly, even though I get upset when I think about 2060 being the government’s goal, if they did take that on as their goal, part of me thinks maybe that’s realistic. Maybe Canadians who don’t have access to generational wealth should accept that and plan their lives accordingly, instead of holding out hope that the government will fix it for them soon enough that it makes sense for them to dedicate their lives to living in Canada.
Mike Moffatt: I don’t think 2060 is more realistic at all. In fact, if we don’t solve it anytime soon, we just won’t—we’ll never get around to it. But I would absolutely agree with your premise that I would advise young people to consider their options. I would not tell somebody in grade nine, “Oh no, they’re going to fix this and they’ll do it soon, so you don’t need to worry about that.” That’s unrealistic.
I do have a lot of time for the idea that we need to be realistic in our targets, and I definitely support having targets. We’ve already blown through so many of our housing targets, climate targets, what have you. So I’m with the housing advocate on the need to have targets and that those targets should be realistic—full agreement there.
Then it becomes a question of what is realistic. I think we can absolutely solve this before 2060. We’ve already seen the federal government massively reduce the demand for housing through changes to immigration programs and non-permanent resident programs, such as international students.
But we still need to increase home building. There’s so much pent-up demand in the system. There are so many folks in their 20s and early 30s still living in mom and dad’s basement or living on the couch. We need more homes, and particularly, we need more family-sized homes. That is going to require governments to make a series of tough decisions on how we fund infrastructure, our land-use decisions, and so on. We need to make it much cheaper and easier to build the kinds of homes that families want and need. I don’t want to discount how challenging this will be, but I do think it’s absolutely doable to fix this in roughly a decade or so.
Cara Stern: I love your optimism for a decade. That seems like a very lofty goal, and I hope you’re right.
Honestly, I’ve heard governments announce program after program promising to solve housing. The big one that comes to mind for me is five years ago when Doug Ford was promising 1.5 million homes by 2031. We’re now halfway there from when they set that goal and we’re nowhere near that target—I think we’re actually worse off than we were at the time.
I remember when homebuilding started slow, the housing minister at the time said something like, “Don’t worry, we’re building up our capacity and eventually it’ll pick up. The second half of the decade, we’re going to be building like wild and we’re going to make that target.” That never happened. Now it seems like the Ontario government is just ignoring that target instead of admitting failure, so I don’t have a lot of hope. I get a little bit frustrated when I think about these goals because I’ve never seen them hit any of their targets on housing since I started covering this.
But even if it is possible to build enough homes to solve the middle-class housing crisis before 2060, is it possible to do it without tanking home prices? That is something I think we’ve seen the government is not super keen to have happen.
Mike Moffatt: Yeah, or even talk about. I actually think that’s probably where the challenge is here; there is a political challenge more than an economic one. To be clear, governments should not be in the business of trying to impact the price of resale homes—particularly, they shouldn’t be in the business of trying to prevent them from falling. We talk a lot about how housing is an investment. Well, if housing is an investment, investments fall and investments go down. If anybody thinks otherwise, you’re welcome to buy my shares of Coleco and Atari off of me. This happens all the time; we have to allow asset prices to go down.
What governments should be doing is focusing on reducing the cost of building new homes that meet the needs of families. Those new homes may look different than homes did 30 or 40 years ago—you might have more multiplexes, fewer single-detached homes, that kind of thing. It’s not as simple as just saying, “Let’s just build homes that look exactly like they did in the 1980s and build them three or four times over.” This looks different. If we do build more homes, that’s absolutely going to impact the value of existing homes, but it’s going to do so in complex ways. It’s not as simple as saying all home prices are going to go down 10, 20, or 30%.
For instance, if the City of Toronto made it really easy to build family-friendly infill multiplexes, that would put a lot of downward pressure on high-rise rents and condo prices. A young couple who lives in one of those would sell it and go move into a multiplex. It would also probably reduce the number of families who move to a place like Brantford or Woodstock, reducing that “drive until you qualify” traffic, which is going to reduce the price of homes there.
On the other hand, it could actually increase the value of single-detached homes in Toronto, particularly in more urban areas, because the land under them would become really valuable since you would be able to tear down or renovate a smaller home and turn it into a four-plex, a six-plex, or an eight-plex. This new-versus-resale relationship is complex, and it’s not the case that if you start building more homes, the price of all other homes falls—but many of them would. That is a political challenge, to be sure.
Cara Stern: And we should be okay with it. I love what you’re saying about this. Housing should be more of an investment in that way. When you first say it, I’m like, “Oh no, we don’t want it to be more of an investment, isn’t the whole thing that we want people to treat it as a place to live?” But no, I get what you’re saying: prices need to be able to come down and move around with the market. That is what it means to be an investment.
New supply is so important because if someone is in the middle class, they are probably going to be forced to rent even if they don’t want to if it doesn’t make sense for their family to buy. That means they’re taking up a rental unit from someone who may need it more. Given the lack of family-sized rentals especially, I keep thinking that people who are lower-income and really need that won’t have access to it. Those units are being taken up by people who really should be able to afford market-rate homes and buy if they want to. That creates less turnover in the rental market and makes the whole situation worse for everyone else.
Mike Moffatt: It really is an issue. We absolutely need to be concerned about those experiencing homelessness or at risk of experiencing homelessness, but that said, I’m quite shocked by how cavalier some advocates are with the needs of young, middle-class Canadians.
If Canada is seen as increasingly hostile to their needs, those folks are going to leave. Or perhaps those young, middle-class Canadians are going to stay, but they’re going to want to burn the system down. This idea that as a country we can somehow simply tell young people, “Yeah, we’ve priced you out of ever having a middle-class life, but we’ll fix things for your grandkids and that will all be okay”—it’s simply baffling to me. I just don’t get where they’re coming from.
Cara Stern: It’s really scary to think that we’re going to lose everyone who has any other option of living anywhere else, who will go where they’re able to start their careers and have the life they want. I don’t think we want to make that our goal, and I don’t think we want to signal to people that that’s our goal, because I don’t know that governments would want to follow that. If they think about the long-term consequences of that, it is a big problem.
I get why politicians don’t want to see change, because it could mean hurting the asset value of some of the most reliable voters, but it is creating big problems in our country.
I hope we get some actual targets from governments that they actually intend to follow through on, so people can at least make informed decisions about where to put down their roots.
Thank you so much for watching and listening. Our producer is Meredith Martin and our editor is Sean Foreman.
Mike Moffatt: If you have any thoughts or questions about defunct 1980s tech companies, please send us an email to [email protected].
Cara Stern: And we’ll see you next time.
Additional Reading/Listening that Helped Inform the Episode:
New reports offer guidance for strengthening the next National Housing Strategy
Rights-based intergovernmental agreements for the next National Housing Strategy
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