How Many Homes Canada Needs to Build Each Year?

To confront the housing shortage and affordability crisis, Canada must dramatically increase its annual home construction. According to estimates from the Canada Mortgage and Housing Corporation (CMHC), the country should target building between 430,000 and 480,000 housing units annually until 2035 to restore housing affordability. Achieving this goal would more than double the current pace and require substantial efforts to boost construction activity. 

Current Housing Deficit

Canada's existing housing construction rate falls far short of meeting demand and addressing affordability challenges.

CMHC Estimate

Research conducted by CMHC suggests the need for 430,000 to 480,000 new homes per year until 2035. These figures stem from an analysis of supply gaps and efforts to overcome historical shortages.

Scale of Construction Required

Currently, annual housing starts hover around 240,000—less than half of what CMHC advocates. Major adjustments are necessary to scale operations and meet these ambitious targets.

Obstacles to Increased Construction

Several factors hinder the ability to ramp up housing construction across Canada:

- Municipal regulations and zoning bylaws: Restrictions on building heights, densities, and housing types can limit development opportunities.

- Permit delays: Lengthy, intricate approval processes slow down new projects before they even begin.

- Development charges: High fees imposed on developers increase construction costs and erode profitability.

- Industry fragmentation: A highly scattered construction sector struggles with coordination and scaling operations efficiently.

Why Action is Urgent

Housing shortages have directly fueled surging home prices and rental costs, making it harder for Canadians to secure affordable accommodations. Tackling this problem is pivotal to improving quality of life and stabilizing the market.

Government Intervention

The federal government has introduced multiple initiatives to address these challenges. These include funding affordable housing projects and collaborating with provincial and municipal governments to simplify development approval processes. While promising, these measures will need broader support and coordination to meet CMHC’s recommended targets effectively.