A report by Deloitte Canada released this week offers an insightful look into how housing plays a direct role in our economic productivity. Specifically, the report examines housing "not entirely governed by the laws of supply and demand."
The report calls this "community housing," which includes co-ops, non-market homes, social housing and lower-cost market rentals. Among the findings is that housing affordability in Canada is at its lowest point since 1990. Canada is also facing a problem with lagging productivity and we need to find ways to boost output without causing inflation to rise.
Through its research, Deloitte found adding community housing to a region supports economic development and productivity. Community housing had been a much more prevalent part of home construction until the 1980s. After several decades of little investment in this type of housing, more units are now being built — though they still represent a relatively small share of total stock being added.
The Canadian Mortgage and Housing Corporation recently reported that Canada needs 3.5 million new homes by 2030 to achieve affordability. Deloitte's report concluded that government investment in community housing will help meet this demand and boost our economy's potential output growth.
"If Canada’s community housing units as a share of total housing units were to increase from 2023 Q2’s level of 5.5% to 7% by 2030 this would require an increase of 371,600 units in Canada’s total community housing net stock," Deloitte's report stated.
For BC, this would equate to 50,870 additional units by 2030 — a 42% increase from 2023 levels. Doing so would increase provincial productivity by up to 9.3% adding $25
billion to BC's GDP.