The housing sector needs a renovation

The Globe and Mail Editorial Board wields a sledgehammer to Canada’s housing sector and finds that stagnant construction productivity needs an urgent upgrade.

The Board notes that Canada’s construction productivity has not improved over four decades. Poor returns on resources invested in housing are a drag on general productivity and mean many Canadians cannot afford mortgages or rents.

Recent studies find several reasons for the current malaise. Some lie with the construction industry:

• Many companies have fewer than five workers—generally inefficient
• A tendency to offer unique features that slow down overall production
• A complex production chain fraught with numerous steps and delays

Then there is the role of governments. The editorial highlights decisions in British Columbia, Alberta and New Zealand that clear municipal obstacles to higher density and make new housing starts easier. Ontario, on the other hand, has been reluctant to require cities to allow more housing density. New housing starts per capita in Toronto significantly lag those in Vancouver and Calgary.

In its call for “a renovation” in Canada’s housing sector, the Globe and Mail says, “building homes doesn’t need to be as complicated as it has become. Governments have started to simplify parts of the process. The construction industry must improve its operations. Successfully building many new homes – and reviving Canada’s lacklustre productivity – depends on it.”