We’ve seen the blame laid at shadow flipping and foreign investors, but one factor of the housing affordability crisis isn’t getting the attention it needs, according to the Fraser Institute.
A new report from the right-leaning thinktank says supply is being hampered by onerous amounts of regulation and red tape.
Senior director Kenneth Green says that’s holding up the creation of badly needed new housing supply.
“We’ve heard a lot about foreign investors and flipping, and there hasn’t been a lot of attention given to the elements of the regulatory environment that either make it attractive to build new housing or dis-incentivise the building of new housing.”
Green says overly-long permit approval timelines are deterring developers from getting shovels in the ground on new builds.
“A six month addition to the approval timeline compared to competing jurisdictions causes a 3.7 per cent decline in the growth of housing stock.”
“Since the average around Canada is 6.6 per cent, that’s a major reduction in housing growth rates.”
Green says the issue of short supply and hot demand hasn’t been getting its due attention, in comparison to shadow flipping or foreign investment.
The study monitored 68 Canadian municipalities, including ones in the Metro Vancouver area.