Quote:
Originally Posted by Crawford
I have no data to support this, but I suspect Canada's housing-to-income extremes are partly due to the stronger national or provincial planning oversight. Canada has, relative to the U.S. very restrictive growth rules which prescribe housing types and locations. So, for example, in the GTA, you get a ton of multifamily housing but not much SFH, but GTA residents are still living typical sprawly North American lifestyles, so you get insane prices on the SFH, while the multifamily can be quite reasonable.
The U.S. system generally results in much uglier landscapes and is unsustainable but is also more efficient and closely tailored to demand and lifestyle. It's myopic but reasonable while Canada's system is trying to shift housing norms. Throw in an extra 100k or whatever immigrants every year, and combine with limited regional mobility designed for a city half the size, and decent SFH with commutable location gets absurd premiums.
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Keen observation. It's a pretty basic equation with slow and restrictive greenfield development on one side handled at the municipal/regional level, and population growth through massive immigration targets which is handled at the federal level. There is a massive disconnect between these two arms of government who each have goals that are completely incompatible with how the other is operating.
At the local planning level, the issue is that we tend to build incrementally in Canada. Meaning that we completely fill in one layer before moving on to the next. A city's official plan which essentially delineates acceptable land uses for every acre of land in the urban boundary is only required to be updated every 5 years, and they typically won't switch land from agricultural to residential until existing development is pressing up against the farmland. Amendments to the official plan are the hardest and most burdensome planning process to go through, and while in the GTA they can be appealed to the Ontario Land Tribunal who can overturn local planning decisions, it's still a process that takes years. And even with the Tribunal, you will never get an amendment for land that is significantly past where the existing residential development ends. So for example in the picture below you would never be allowed to "skip" one of the big rectangular parcels at the border of the city and develop the next.
Compare this to any number of U.S. metros, where development leapfrogs and tendrils out in all haphazard manner:
What this means is that there is a fairly predefined amount of land that has any possibility of being developed in the next 5 years. There will inevitably be holdups on any number of consequential (and some ridiculously inconsequential) issues. For a long time this method didn't really cause problems. The whole point is to allow cities to better plan for growth and ensure that they're delivering the quality of services that residents expect, instead of building anywhere and everywhere and filling in the gaps later. building block by block means that there will be a guaranteed amount of parkland, school capacity, transit coverage, etc. for everyone almost immediately upon completion of the subdivision. It doesn't waste farmland by allowing for underutilization of large blocks of developable land. The problem is you can't have it both ways, and if you crank up the immigration dial to 11, while still maintaining your methodical yet glacially slow land development process, the system is going to put under tremendous stress.
In Canada, Immigration is somewhat of a sacred cow. It's the lifeblood of the country, can't be criticized at all, "you must be racist!", etc. The country is in a tough spot between needing large amount of immigration to sustain our low labour productivity, ponzi-style economy and challenging future demographic problems, while avoiding runaway CoL increases for everyone who lives here and those who are moving here. In my opinion it's pretty selfish to keep selling immigrants on the chance for a better life in Canada, while enabling a system that ensures most will be stuck working low-wage service jobs and living 10 people to a house just so we have enough labour to service an aging population.