The CMHC is Out to Lunch and they Just Ordered Dessert!
CMHC just dropped a report walking back their ambitious housing affordability target—and thank goodness, because it never made sense in the first place.
Originally, CMHC wanted to bring housing affordability back to 2004 levels. Let’s pause here—2004 pricing? Not realistic, and there’s zero math supporting that idea.
Back in 2023, the housing agency said Canada needed 3.5 million new homes by 2030—on top of the 2.3 million already planned. Let’s quickly run through the numbers:
Per Year: ~814,286 homes
Per Month: ~67,857 homes
Per Day: ~2,231 homes
Per Hour: ~93 homes
Ninety-three houses an hour? That’s just silly. Can you imagine?
CMHC blamed exploding population growth, pandemic-driven buying surges, and a lack of skilled workers. Technically, doubling current home starts is possible—but only with these massive changes:
Modernized and expanded workforce
Increased private investment
Reduced regulatory red tape and delays
Lower development costs
Sounds good on paper—but here’s their reality check: CMHC just admitted this goal is absurd and pivoted their target to returning affordability to 2019 levels instead.
But even 2019 affordability is tricky. Home prices back then were 30% lower than today. Where exactly are the savings supposed to come from? Are builders going to magically build at a loss?
Even the revised 3.5-million home shortage feels off. Look south—recent, thorough U.S. data shows a 7.2 million home shortage. The U.S. has 250 million people. We have 40 million. How could Canada’s shortage be half theirs? Clearly, some numbers or factors are missing.
The hard truth: We can't just build our way out of this. More supply alone won’t drastically drop prices, not by the amounts they’re suggesting.
But here's what we can do right now to bring pre-construction costs down:
Slash development charges. Builders currently pay around $100,000 per new home in development fees—and you know they pass that cost right onto buyers. Kill that fee and you instantly reduce new home costs.
Cut all HST on new builds. Right now, only first-time buyers get an HST break—and only for homes under $1 million. Why stop there? Cut it across the board. This requires provincial government support, and it’s time they step up.
The solution isn't simply "build more homes." It runs way deeper—and maybe we're too far gone for a quick fix. But if we’re serious, let's start with obvious moves: slash those outrageous development fees and taxes, because they land squarely on the backs of regular people like you and me.
