August 14, 2017
It’s probably time for Prime Minister Justin Trudeau to tell his young followers that the “Canadian dream” no longer comes with a lawn.
Last week, Statistics Canada reported a big drop in the issuance of building permits for single-family homes in cities with populations greater than 10,000. Municipalities in June granted permissions for such structures at a seasonally adjusted rate that would yield 65,100 units in a year, the slowest pace since April 2009 and one of the weakest on records that date to 1960.
The decline is noteworthy because you’d think the stars were aligned for a boom in the construction of dream homes: the economy has been churning out jobs steadily for a year, real-estate prices are high, and interest rates are low. There should be lots of incentive for everyone involved to build, borrow, and buy. Yet that’s not what’s happening. Those high prices have become too much for normal people, especially in Vancouver and Toronto. Tighter lending standards are also forcing dreamers out of the market. And perhaps more importantly, city officials remain stingy with land and permits in the places where most people want to live. “Toronto is a gateway for new immigrants,” Quentin D’Souza, who runs a couple dozen rental buildings in the Greater Toronto Area, told me earlier this summer. “We don’t produce enough new housing for all of those people.”