Canada’s housing affordability crisis continues to intensify, but new research from Concordia University suggests that targeted policy reform could have a measurable impact on supply, and help ease rising prices in major cities like Toronto, Vancouver, Montreal, and Calgary.
According to the Canada Mortgage and Housing Corporation (CMHC), Canada needs 3.5 million additional housing units by 2030 to meet demand and curb skyrocketing home prices.
The study, Breaking Ground: AI-Driven Analysis of How Policy Reform Can Unleash Canadian Housing Supply, was led by Erkan Yönder, Associate Professor of Finance and Real Estate at Concordia’s John Molson School of Business, in partnership with Equiton. Using artificial intelligence (AI), the research analyzed how changes in regulations, approval processes, and construction costs could influence housing completions and ultimately, affordability.
AI-Powered Forecasting for Housing Supply
The research applied a neural network AI model to public data from CMHC, Statistics Canada, and Government of Canada forecasts, covering the period 2017 to 2025. This approach allowed the team to simulate multiple housing market scenarios and pinpoint the most impactful policy levers.
Key factors studied included:
- Municipal-level regulation indices
- Approval delays for development projects
- Input costs like materials, labour, taxes, and fees
- Population growth and demographic shifts
- Global market impacts, including U.S. tariff changes
Key Findings
1. Streamlining regulations could boost completions by 10%
- A 10% decrease in building restrictions could raise annual home completions by almost 10% of total housing supply.
- Reducing approval delays by 10% could add another 3%.
2. High input costs severely limit supply
- A 10% increase in construction costs could reduce completions by 25-35%, especially for apartment-style housing.
3. Regional outcomes vary
- Toronto: Doubling completions could lower the projected 2032 median price from $1.8M to $1.6M.
- Vancouver: Doubling completions would moderate prices from $2.8M to around $2.5M.
- Montreal: Prices continue to rise regardless of completions due to extreme supply-demand imbalances.
- Calgary: Price growth is more tied to population shifts than construction volume.
Why This Matters for Ontario’s Housing Market
For Toronto and the Greater Toronto Area (GTA), the findings reinforce that regulatory reform is one of the most cost-effective ways to increase housing supply without major subsidies or tax breaks.
As TRREB and CMHC have noted, Ontario’s housing completions have lagged behind population growth for years. If provincial and municipal governments focus on cutting red tape, shortening approval timelines, and stabilizing input costs, thousands of additional units could be delivered to the market, helping to stabilize prices and improve affordability for first-time buyers.
Beyond Supply: The Need for Collective Solutions
While policy reform is a critical piece, Yönder warns it won’t solve the crisis alone. Skilled labour shortages, persistent cost inflation, and the time required to bring new housing online remain significant challenges.
The study calls for collaboration between all levels of government, developers, and communities to address barriers and explore new economic hubs outside of Canada’s most pressured cities.
“As a country, we should look at building up new economies in other cities,” Yönder says. “We really need to find collective solutions.”
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