Brian Crombie Radio Hour - Epi 1420 - The Housing Crisis with Aled ab Iorwerth

Tonight on The Brian Crombie Hour, Brian interviews Aled ab Iorwerth the Deputy Chief Economist of CMHC about our housing crisis. Aled joined CMHC in 2016, previously had a 15-year career at Finance Canada, in various research and analysis roles that included secondments to Environment Canada and the Council of Canadian Academies. He holds a PhD in Economics from Western University and master’s degrees in European and International Relations and Economics.

Aled discusses the CMHC's new modeling approach, which still supports the need for increased housing supply to improve affordability. He says there are structural long-term challenges in the GTA and Vancouver with high housing costs deterring talent and causing a shift to other cities like Calgary and Halifax. Aled emphasizes that increasing housing supply could slow the growth of house prices, aiming for a flatline rather than a significant decrease. Additionally, Aled attributes the recent decline in housing prices to macroeconomic uncertainty and a short-term glut of condos, rather than an increase in supply. He notes that the disconnect in affordability metrics began around 2006, and current per capita housing construction rates are about half of what they were in the 1970s. Development fees and GST have significantly increased over the past decade, accounting for about 31% of the cost of housing. Aled also discussed the lengthy regulatory process for rezoning land, which can take 3-5 years in Toronto.

Together Aled and Brian explore the potential for a boom and bust cycle due to low housing starts in the current year. Aled says simplifying zoning regulations and moving away from municipal control towards provincial or national oversight could help increase housing supply, highlighting the need for more harmonized regulations to allow for industry consolidation and greater productivity. Aled expressed skepticism about inclusionary zoning, preferring to address affordability through the tax system.