Launched in 2017, the National Housing Strategy (NHS) was promoted as a significant federal initiative to address affordable housing after more than two decades of neglect. Initially set at $40 billion, subsequent budget commitments have increased the strategy’s funding to $115 billion over 10 years.
As of September 2024, $57.57 billion in funding has been committed. While the program has made strides in delivering new apartment units, its success in delivering affordable housing has been limited. What’s more, much of the funding initially announced was a repackaging of existing commitments made prior to the NHS.
Many of the affordable units delivered so far have come from the renovation and repair of existing social housing. While this is important, it underscores the mismanagement of this housing stock and the lack of attention from municipal and provincial governments.
In June 2022, CMHC published a research report, later updated in September 2023, estimating that 5.8 million homes would need to be built by 2030 to restore housing affordability. This includes 3.5 million more homes than were already projected to be built over that period.
This theoretical analysis estimates the level of home construction required to create enough excess supply to drive prices down 30 per cent from 2022 levels. It defines affordability based on the relationship between household income and home prices. Using 2004 home prices as a benchmark, the analysis produces a price-to-income ratio of around 30 per cent for most provinces, with higher levels for Ontario and BC. By projecting incomes out to 2030 and applying the 2004 price-to-income ratio, the report estimates the level of supply required to bring prices in line with income levels.
CMHC initially promoted filtering—adding a high volume of lower-priced, higher-density units—as a long-term strategy to improve housing affordability. However, its latest report presents a more cautious view.
I believe there are two key reasons for this shift. First, since December 2022, CMHC no longer manages the National Housing Strategy—that responsibility now falls to Infrastructure Canada. Second, its original goal appears increasingly unattainable, making it necessary to start managing expectations.
CMHC now frames solving the housing crisis as “a marathon and not a sprint,” emphasizing the need for changes in approval processes and construction methods—issues that were already evident when CMHC launched the NHS. It has also adjusted its affordable housing target, now aiming for 575,000 social housing units to meet the OECD average. This is certainly more attainable than the initial target, but it reflects a significant recalibration. I suspect CMHC recognizes the initial aspirational target was more of a policy goal rather than something realistically attainable.
With CMHC no longer responsible for setting housing policy and the potential for a downturn in condo construction over the next few years, they need to adjust their narrative – one that acknowledges it will be 10-20 years before there is gradual improvement in affordability.
Independent Opinion
The views and opinions expressed in this publication are solely and independently those of the author and do not necessarily reflect the views and opinions of any person or organization in any way affiliated with the author including, without limitation, any current or past employers of the author. While reasonable effort was taken to ensure the information and analysis in this publication is accurate, it has been prepared solely for general informational purposes. Any opinions, projections, or forward-looking statements expressed herein are solely those of the author. There are no warranties or representations being provided with respect to the accuracy and completeness of the content in this publication. Nothing in this publication should be construed as providing professional advice including investment advice on the matters discussed. The author does not assume any liability arising from any form of reliance on this publication. Readers are cautioned to always seek independent professional advice from a qualified professional before making any investment decisions.
