Canada struggles to close the gap between the number of homes needed and the number built: Fraser Institute

Despite a housing shortage in many cities across the country, the number of housing units in 26.4 per cent of Canada’s urban neighbourhoods—more than one-in-four—actually declined from 2016 to 2021, according to a new study released by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

Josef Filipowicz

“Policymakers across the board acknowledge there is a lack of new housing in Canada’s cities, and yet, large swaths of the urban landscape have seen little to no increase in the number of housing units, or worse, they’ve actually seen a decline,” said Josef Filipowicz, a senior fellow with the Fraser Institute and co-author of Making Room for Growth: Housing Intensification in Canada’s Cities, 2016-2021.

The study finds that from 2016 to 2021, more than half (54.2 per cent) of Canada’s housing stock growth occurred in existing urban neighbourhoods instead of unused, undeveloped land—what’s known as intensification.

Of those new housing units that were built in pre-existing urban neighbourhoods (called census tracts by Statistics Canada), 50.9 per cent were built in just five per cent of neighbourhoods.

Crucially, half of all neighbourhoods in Canadian cities saw the number of housing units increase by less than one per cent. And 26.4 per cent of urban neighbourhoods actually saw a decline in the total number of housing units during the same time period.

Steve Lafleur

“What growth we are seeing in new housing units across Canadian cities, it is largely happening in very small pockets,” said Steve Lafleur, Fraser Institute senior fellow and study co-author.

“To more meaningfully tackle the housing shortage in Canada, policymakers will have to look at ways to create more housing units of all types across our urban areas, and not just in certain small pockets.”

Main Conclusions

• As Canada struggles to close the gap between the number of homes needed and the number built, its communities are faced with two options to increase housing supply: spreading outward, by adding new neighbourhoods at the urban fringe, or becoming more dense, by allowing more homes to be built within existing neighbourhoods—a process called “intensification”.
• A majority (54.2 per cent) of the growth in Canada’s housing stock between 2016 and 2021 occurred in existing neighbourhoods, rather than on undeveloped land; intensification is a major driver of growth in Canada’s housing stock.
• A little more than half of this intensification (50.9 per cent) occurred in the fastest-growing five per cent of urban census tracts, suggesting a highly uneven pattern of growth in the housing stock.
• On the other hand, more than a quarter (26.4 per cent) of urban tracts lost more dwellings over this period than they added, representing a cumulative net loss of 33,723 dwellings.
• This highly uneven growth pattern holds across most major metropolitan areas.
• Canada faces an acute shortage of housing, and needs to increase housing supply across all housing types, regions, and neighbourhoods.
• Given the important role played by intensification in accommodating a fast-growing population, the trends identified in this report should inform urban policy makers and Canadians in search of adequate housing options.

Mario Toneguzzi

(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)