Realistic Projections Of Population Must Inform Estimates Of Housing Needs
Posted October 27, 2023
On Oct 23rd Minister of Municipal Affairs and Housing John Lohr released his Action For Housing plan. Informed by an extensive report on future housing needs, it lists twelve actions toward a goal of adding at least 71,600 net new household units by 2027, an increase of 41,200 from the expectation of 30,400 at current pace.
The actions, many of which have been previously announced, are largely sensible and project a $1 billion investment over five years. But the future population estimate on which the plan is based is seriously flawed.
Start with the initiatives. The province is identifying land it owns that will be suitable for affordable housing initiatives. Together with the federal government, it is investing in roads and other necessary infrastructure to support housing.
We need more skilled tradespeople. Training capacity will be expanded at Nova Scotia Community College sites. Apprenticeship openings are being increased. Income tax incentives are provided for newly qualified tradespeople. Provincial nominee programs will be used to attract skilled immigrants.
Red tape that slows down construction is to be reduced. Heavy-handed intervention in HRM is already common and will be extended to other counties. It’s not pretty but it works.
Together with the federal government, the province will invest in affordable housing projects, including blocks of Pallets or tiny homes, to provide relief for people who are unhoused. Options to convert commercial buildings to housing will be explored.
The province recently announced that it will build 222 public housing units. The bias going forward is to support community groups as the managers and operators of social housing. That is a good choice, but sometimes not-for-profits fail. There must be a non-intrusive process for monitoring their viability and effectiveness.
Provincial management of publicly owned housing has been inadequate. More money will be spent for needed maintenance and repairs, and turnaround times will be shortened.
High interest rates and the continuing high cost of labour and materials has inhibited new housing starts. The province has joined Ottawa in reducing HST on construction materials, which will get more shovels in the ground.
The government’s goal is to more than double the current pace of 6,080 additions per year. Achieving that would be a considerable feat, but it is far from enough.
The most important indicator of need is population. It has been growing at an accelerating rate in Canada, from about 600,000 new Canadians in 2019 to just under a million in 2022, and is on track to exceed a million this year. Canada has grown 5% in the last 24 months.
That increase has been fueled by immigrants, asylum seekers, international students, temporary foreign workers, and other non-permanent residents, all of whose numbers have been growing.
Immigration, Refugees and Citizenship Canada (IRCC) has unwisely waived some important eligibility requirements for visitor visa applicants in an ill-considered effort to reduce its backlog. Since the closing of irregular border crossings such as Roxham Road, the number of asylum claims at airports has grown by 54%. IRCC’s backlog sits at 2.2 million.
Much more useful than waiving eligibility requirements would be to give top priority to health workers and construction tradespeople.
Both Prime Minister Trudeau and Conservative leader Poilievre are strongly in favour of immigration, so the national number is likely to stay in the one million vicinity.
The Maritime provinces have each grown more quickly than Canada as a whole. The difference is fueled by net immigration from other provinces, especially Ontario, a major change from the historical pattern of losing population to the rest of the country.
Ontario’s housing shortage is even worse than Nova Scotia’s. So is British Columbia’s, the second biggest source of net immigration. So, our elevated house prices still look attractive if you are from Toronto or Vancouver.
Nova Scotia grew by 14,000 people in the 12 months ending July 1, 2020. The following 12 month period saw a covid-constrained 11,000 in 2021, 25,000 in 2022, and 33,000 in 2023, reaching a total population of 1,058,694 last July 1.
The Housing Needs Report’s assessment is based on a population forecast provided by the Department of Finance and Treasury Board. It forecasts a growth of 17,000 in the 12 months ending July 1, 2024 to reach 1,057,656 people, a number that has already been exceeded this year.
After that, it forecasts growth decreasing annually to 11,000 people in the final year, for a total of 100,000 in the eight years ending in 2032. Nova Scotia’s recent experience suggests that 200,000 would be a conservative estimate.
Achieving the plan’s goal of more than doubling the pace of home construction from now until 2027 would be a great achievement. But it will not be enough.
Housing need is not the only area which will be underestimated. Plans for schools, roads, hospital beds and health care workers will all be inadequate based on the current forecast.
The Finance and Treasury Board’s population forecasts have substantially erred on the low side for the last six budgets. There will be keen focus on new forecasts in preparation for the next budget, which will guide all departments in their future planning.
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