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What types of housing do we actually need?
It’s not more of the same.
By Cherise Burda and Karen Chapple
Cherise Burda is the Executive Director at City Building TMU and a member of the Task Force for Housing & Climate. Karen Chapple is the Director of the School of Cities at University of Toronto and a research partner for the Task Force for Housing & Climate.
Canadians have been hearing a lot about the need to build 5.8 million more homes by 2030. But what types of homes exactly? Is it big square-footage single detached homes we need? High-rise condos? Apartment units? Student or senior housing? Social housing? More of what we call the “missing middle”, including townhomes, fourplexes, semi-detached and mid-rise?
The answer is a carefully balanced mix of all of the above, but leaning towards the housing types where Canada is facing a particularly acute deficit right now.
While federal, provincial and municipal governments appear to finally be getting serious about growing Canada’s housing supply, we quickly need to get serious about building the right supply. If we build the next 5.8 million homes the same way we built the last 15 million – favouring detached homes and using inefficient design, carbon-intensive materials and predominantly low-density, car-dependent land use patterns – we won’t only miss our affordability goals, we’ll also blow by Canada’s climate targets.1
A new series of Housing Supply Mix briefs present key findings for the type of housing Canada needs. Here are some of the key insights:
Good density can help control poor land use planning.
Despite the appearance of more intensification in our communities, 75% of housing built over the past five years in Canada has happened in greenfields.2 We now know these can be the slowest, most costly, and most environmentally harmful places to build in.
To re-orient housing growth away from greenfield development and towards intensification in our existing communities, governments need to send clear policy signals, including differential development charges, parking policies, infrastructure investment, and others. But not all intensification is created equal. Simply building more one-bedroom condos in tall towers won’t solve the problem. In fact, that kind of density can perversely increase demand for new car-dependent subdivisions because a house in a distant greenfield becomes the only practical and attainable option for families.
Good density means building a greater diversity of housing types to match the broad diversity of household and lifestyle needs – all within existing urban boundaries.
Sweat the small stuff.
The solutions lie in putting an emphasis on missing middle housing, including simple incremental options like adding units to existing homes via secondary suites (or “Accessory Dwelling Units”). For example, using available data from ADU Search, adding one Accessory Dwelling Unit to just 10% of the suitable single-family properties located in many Ontario municipalities would meet between 8% and 30% of provincially mandated housing supply targets. With the right suite of policies these could be added quickly and gently and with much less carbon, as has been shown elsewhere in North America3.
Missing Middle housing is vital to meeting housing and climate targets, as it provides ground-related alternatives within existing neighbourhoods. Also, prioritizing incentives and building code and design changes to make midrise buildings more viable and replicable can scale this moderate typology throughout cities and small communities.
Build homes appropriate for seniors – and recycle millions of single-family houses.
Canada has over 8 million single-detached houses, representing well over half of the housing stock in Canada, most of which are owned by older generations. An overlooked strategy to provide single-detached houses for younger and newcomer families is in “recycling” and “repurposing” the existing stock, rather than developing new car-dependent subdivisions further afield to build this typology.
The key to this strategy is to focus on developing desirable housing alternatives for older Canadians, be it co-housing, co-living, smaller-scale retirement living or simply adding suites to their houses. Desirable options could help motivate seniors to downsize sooner – and by choice – freeing up many thousands of detached houses.
Fix the mismatch between what Canadians can afford and what the market can charge.
Rental households in Canada are growing at two to three times the rate of ownership, while 66 percent of housing in Canada is ownership, often subsidized by the federal government. Canada is getting more serious about rental, with the federal government rolling out a range of incentives and tax breaks recently announced. But the question remains how affordable this rental will be.
According to UBC research experts HART, 40% of Canadian households cannot afford housing costs greater than $1600 per month including utilities, with half of those households unable to afford more than $1050 per month. Yet the average rent in Canada currently hovers around the $2200 mark.
Our research found that 95 percent of Canada’s housing stock is built by the private market, with decades of disinvestment in non-market housing. By comparison, less than 6% of Canada’s housing is non-market, which is housing built outside of the private market, including social housing, Coops, land trusts and not-for-profit developers and providers. As a result of our research, the Task Force included a main recommendation that 40 percent of Canada’s new housing be non-market or below market.
Preservation is the first strategy to building more affordable housing.
For every new affordable housing unit created in Canada between 2011 and 2021, ten affordable homes were lost. Canada is losing its existing affordable rental stock via processes of “renoviction,” (evicting tenants to renovate and then hiking the rent) “demoviction,” (demolishing affordable buildings for redevelopment to achieve higher densities), and the filtering up of affordable housing to more affluent households.
As we write this blog, the federal government announced it would dedicate $1.5 billion to acquiring affordable apartments at risk. More needs to be done to prevent the loss of affordable housing, as non-profits cannot possibly buy them all.
The Big Takeaway: Building the wrong housing bakes in emissions and unaffordability for decades to come.
Empirical evidence shows that building more market-rate supply will not filter down to positive affordability outcomes in the near term, although it will alleviate pressure on older existing stock by accommodating market-rate household demand4. Therefore, simply aiming for numeric housing targets can lead to a “build anything anywhere” approach with poor policy outcomes, such as building on Ontario’s Greenbelt.
We hear a lot about the 5.8 million home target, but not enough about the importance of ensuring that we direct scarce resources, labour, infrastructure investment and public land to building the homes that match household incomes and facilitate livability and accessibility to employment, schools and services. Canada needs to get serious about conducting a national housing needs assessment, to match need with the right supply mix.
This assessment should identify and frontload the right housing that addresses both the affordability and climate crises with simultaneous effectiveness. Not targeting the right supply misdirects scarce resources and infrastructure investment and can “bake in” decades of climate and affordability consequences for decades to come while putting municipalities in financial risk.
2. Includes 68.7% plus rural outside of CMAs. See https://schoolofcities.utoronto.ca/housing-supply-mix-strategy/ 
3. Ezvan, E., & Al-Musa, A. (2023). How to put affordable in the missing middle: A summary of the webinar series. https://bit.ly/3U6rTY7
4. Porter, D., & Kavcic, R. (2023, May 26). Catch-’23: Canada’s affordability conundrum. https://bit.ly/3UmAlUx . Rosenthal, S. S. (2014). Are Private Markets and Filtering a Viable Source of Low-Income Housing? Estimates from a “Repeat Income” Model. The American Economic Review, 104(2), 687–706. https://doi.org/10.1257/aer.104.2.687