Markets do not solve the problems they create. When the desired outcome is housing security rather than profit, governments must regulate markets and support non-market housing.
This argument would make sense if it were primarily a market-created problem, but the reality is we made constructing housing basically illegal while stepping up immigration. The combination of municipal NIMBYist anti-densification policies and hyper-elaborate guidelines with the provincial Green Belt (which is a good idea if densification is permitted but it wasn’t) and the Federal canceling of subsidies on market-rate purpose-built rental housing, and climbing immigration (something that’s otherwise excellent) are what created the problem. Not “markets”.
It should not be a surprise that housing prices – both rental and ownership – skyrocket when building housing is de jure illegal. Every new build requires one-off hearings and multi-year permission processes to get exceptions made to the “guidelines” that are actually rules. If something is legal only with a special government executive decision, then it’s not legal, unless you consider murder to be legal in the USA because they have pardons.
If you listen to below-market-rent subsidized home builders, you’ll hear the same complaints. They want to build, but can’t.
Don’t take my word for it, see this video of deposition by Mark Richardson of Housing Now TO:
https://mastodon.social/@Pxtl/110300343308877005
I loathe the Poilievre conservatives, but they’re right about this. First step to stopping the housing crisis is to kick some municipal government ass. Trudeau is trying to do it with carrots through the Housing Accelerator Fund, but it’s long-since time for sticks and not carrots.
“tax the wealthy” - I would say that in particular this should be taxing wealth. Canada is in the unique position that most of the wealth in this country is real-estate, and therefore has a street address. Capital flight is much more difficult under that circumstance. The guy who owns three houses and a few condos and a car-dealership is far more interesting than a well-paid surgeon, but one owes more of their lifestyle to their wealth rather than their labour. I tend to dislike Jagmeet Singh on policy issues but I think he’s spot on about it being time for wealth taxes in Canada.
Normally I’m pretty neoliberal when it comes to the housing crisis (ie: a huge part of the problem is overregulation) but at this point the solution will require undoing decades of damage and that will mean a need for below-market housing at least until the free market can catch up, if not forever. Taxing Canada’s wealthy land-owners is an obvious way to fund this, since they’re the ones profiting the most from this shortage.