Our friends at the Canadian Housing & Renewal Association (CHRA) recently released a report on the impact of community housing on the economy. Our partners at CHF Canada contributed funding to the report. Here is a summary of the research.
Canada is struggling through a dramatically worsening housing crisis. Millions of Canadians, particularly those with lower incomes, have been experiencing rapidly rising housing costs, driven in large part by an extreme supply shortfall. This problem isn’t isolated to specific communities, regions, or provinces.
Approximately 2.6 million Canadians are in core housing need, with experiences varying across provinces and territories. Several factors have contributed to the scale of the current challenge. This includes a reduction in the share of our housing that is devoted to community housing.
In addition to a housing crisis, Canada’s economy also faces a productivity problem. Our labour productivity growth lags our international peers and has continued to decline in the post-pandemic period. To improve economic performance without further igniting inflationary pressures, Canada needs to find ways to boost its productivity.
CHRA, Housing Partnership Canada, and our sector partners commissioned Deloitte to produce a study on the impact of community housing on Canada’s economic productivity. The analysis in this report, The Impact of Community Housing on Productivity, finds:
Here is a video of the news conference in Ottawa for the release of he study. Taking part are Ray Sullivan (executive director of the CHRA), Kevin Albers (chair of HPC and CEO of M’akola Housing Society), Margaret Pfoh (president of the CHRA and CEO of the Aboriginal Housing Management Association), and Matthew Stewart (director of financial analysis for Deloitte Canada).
In the appendices to the report, there is a carveout on British Columbia that includes this analysis:
British Columbia’s positive productivity growth over the period was largely driven by the manufacturing, wholesale trade, retail trade, and construction sectors. The manufacturing, wholesale and retail trade sectors experienced the sharpest productivity growth, partly benefiting from the adoption of new technologies. The construction sector also saw an increase in productivity growth with the sharpest increase occurring in 2020, driven by gains in residential construction.
Community housing can play a role in increasing British Columbia’s productivity. If Canada’s community housing units as a share of total housing units were to increase from 2023 Q2’s level of 5.5% to 7% by 2030 this would require an increase of 371,600 units in Canada’s total community housing net stock. If each province receives the equivalent share based on their forecasted population growth, British Columbia’s community housing stock would receive 50,870 additional units by 2030. This is a 42% increase in the stock from 2023 Q2 levels.
Raising the share of community housing units from its current levels to the levels forecasted in 2030 results in a 5.7% to 9.3% increase in productivity by 2030. This productivity improvement is equivalent to $15.4 to $25.0 billion boost to GDP by 2030. Considering the opportunity cost of building community housing units instead of private homes, the additional units of community housing would contribute between $9.0 to $18.7 billion to British Columbia’s GDP by 2030.
The report provides five policy recommendations to boost community housing supply and tackle Canada’s productivity problem: