One of the biggest obstacles to addressing housing affordability is finding the right mix of policies. While there’s often an emphasis on creating a comprehensive national plan, a one-size-fits-all approach doesn’t work when the underlying issues vary by region. We see this playing out across the country, with distinct challenges emerging in different parts of Canada.
Lack of financing options undermines support for missing middle housing
In October 2023, Edmonton passed its revised zoning bylaw, which came into effect in January 2024. The new bylaw allows property owners to build three-storey apartment buildings, townhouses, row houses or duplexes with up to eight units in any residential area across the city.
The intent is to increase density in existing neighbourhoods, allowing them to utilize existing infrastructure and services. However, despite the bylaw allowing for “up to” 8 units, many builders are likely to pursue larger 6 to 8-unit developments in order to qualify for CMHC’s MLI Select – a multi-unit mortgage loan insurance program that typically requires properties to have 5 or more units – on the takeout.
This creates two key challenges. First, 6- to 8-unit buildings are often inconsistent with the existing urban fabric of most Edmonton neighbourhoods. Second, the bylaw includes no parking requirement – an issue that may be manageable during the summer months but becomes a serious concern on residential streets that get little to no snow removal in winter.
While Edmonton took a step in the right direction by encouraging greater density, I expect significant voter pushback in the upcoming fall election. A new city council may move to amend this bylaw, potentially restricting higher-density developments to major streets or limiting larger multi-unit buildings in single-family neighbourhoods to corner lots that have more space. The challenge will be making 3- to 4-unit developments financially viable, especially when current incentives favour larger 6- to 8-unit projects.
Development charges a major barrier to affordability
According to a recent report by Daryl Keleher for the Building Industry and Land Development Association (BILD) – The State of Development Charges in Ontario: 2025 – Ontario now has some of the highest development charges (DCs) in North America. In the city of Hamilton, for example, DCs can exceed $100,000 per home. These fees are ultimately passed on to homebuyers and are a significant contributor to the province’s housing affordability crisis.
The underlying issue is that municipalities rely on DCs collected from new housing developments to subsidize services for existing residents. However, many cities have accumulated large reserve funds – over $500 million in Hamilton’s case – indicating they’ve collected substantial fees but have yet to fully invest them in infrastructure projects.
Ontario’s new Protecting Ontario by Building Faster and Smarter Act (Bill 17) introduces some important reforms, including a shift in the timing of DC payments from the building permit stage to the occupancy stage. This helps ease cash flow pressures for builders, but it does little to reduce the ultimate costs borne by homebuyers.
While some cities, such as Vaughan, Mississauga, and Burlington, are taking positive steps to lower their DCs, there is currently no legislative requirement for fee reductions. The legislation does mandate that municipalities spend accumulated reserves and defines what qualifies as “benefiting existing residents” to help ensure DC revenues are directed toward growth-related infrastructure rather than upgrades for existing communities. Still, these measures fall short of addressing the deeper structural problems within the fiscal framework.
If the province is unwilling to eliminate DCs altogether, it must take steps to right-size them. That means not only improving how and when they’re collected, but also revisiting how land costs are factored in and ensuring that infrastructure funding is more closely aligned with actual growth-related needs.
A practical first step would be to shift water and sewer DCs away from the current upfront payment model to a debt-financed, long-term repayment structure applied only to new growth. In addition, the province should revise DC rate calculations, by allowing only actual incurred land costs to be funded through DCs, rather than basing charges on projected land acquisitions and estimated land values 10 to 25 years into the future.
Misaligned priorities
The federal government has proposed reducing DCs by half, but so far there are no concrete plans outlining how this will be accomplished. It is also considering direct investment in affordable housing – an area where government spending is essential, given that the private sector is unlikely to build housing that is not economically viable. The key challenge will be whether senior levels of government can follow through and deliver meaningful results.
Eight years ago, the BC provincial government committed to building 114,000 affordable homes in 10 years. Over the past five years, only 20,422 homes have been built, with just 3,178 completions during fiscal 2023/24. At this pace, it will take 28 years to deliver on the original commitment.
BC is facing a homelessness crisis, particularly in cities like Vancouver, yet recent announcements do little to address this urgent issue. Instead, the province, through BC Builds, has announced plans for a 110-unit workforce rental housing project at Sun Peaks Resort. There are also plans to redevelop the former ICBC head office in North Vancouver. The site’s proximity to the region’s primary bus loop appears to be the primary factor in its selection, despite the complexities of redeveloping land constrained by rail and transit infrastructure and the high costs associated with its waterfront location.
Unfortunately, these initiatives fall short of tackling BC’s critical housing challenges.
Addressing housing affordability requires more than well-intentioned policies – it demands coordinated, region-specific strategies backed by realistic financing and political will. Current efforts reveal significant gaps between policy goals and on-the-ground outcomes, from zoning challenges and costly development charges to underwhelming affordable housing delivery. Without a concerted focus on removing systemic barriers and ensuring accountability across all levels of government, Canada risks prolonging its housing crisis and leaving millions without access to safe, affordable homes. It’s time to align priorities with the urgent needs of communities and pursue practical solutions that can truly make a difference.
Independent Opinion
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