Housing Crisis: The Bureaucracy Is the Bottleneck

***Note; the image is a screenshot of an email response to what follows...

There wasn’t a housing crisis in, say, the 1950s or 60s — despite a huge population and economic boom. Why not?

Because back then, people would stand on a patch of land, thumb out, squinting at the horizon. Then they’d mow down any trees in the way, blow up rocks, bulldoze it flat, reroute fish-bearing streams, backfill ponds or swamps — and have houses up and ready to go inside 12 months from start to finish. And here’s the kicker — just about anybody with a median income could afford one.

Was it the perfect time?
No, not at all.

The environment? Be damned.
Consultation? Wasn't a thing.
Permit process? If you had a shovel, you had a permit.

Oh, and when I say “anyone” could buy them — I mean anyone male, married, and probably on the pale side… so yes, financing “guidelines” are one thing that have evolved for the better, especially in Canada.

There are still a few people in our industry who have stories, Canadian stories, of delivering new of rejection in the 70's, and as late as the 80's for such crimes as being 'divorced (and female)'.

I’m not suggesting we go back to this times.

Neither the “shave it and pave it” development style, nor the extremely biased lending guidelines (you already know I'm not. a fan of the foreign buyer ban either) — No, not for a second do I think past times were better times.

We’ve learned way too much about what happens when you treat wetlands like parking lots. The world is different (better), and the stakes are as high as ever, so yes — we need oversight, environmental safeguards, and agencies to keep us from making 1950s-style mistakes.

However… (a fancy word for “but”) we’ve gone from no brakes at all to an entire convoy of bureaucratic tow trucks parked in the middle of the highway.

Today, you can’t so much as put up a garden shed without triggering the involvement of three committees, two advisory boards, a regional oversight panel, and an independent impact assessment — each one demanding “input” before anything moves. Every single one of them is a veto point. And when eleven different bodies all have to sign off, the odds of anything getting built in less than a decade hover somewhere between slim and “call us back in 2037.”

We need a process that keeps the protections but cuts duplication — a process where agencies work together instead of in sequence. A process that rewards tenured builders with a level of trust to keep things moving, with steep penalties if that trust is broken.

And we all (builders & buyers) need better financing options.

Here are the three opportunities for improvement on the “money” side of the equation:

1. The federal government has shut out foreign investment.
Why?
To make room for all the domestic investment capital that wanted in?
No.
There isn’t enough domestic capital to return real estate construction to the 10yr average, let alone double it as we're being told needs to happen.

So what?
So now we all-time record lows of new housing starts. That’s what.
And this is three full years into government agencies and politicians alike claiming they're going to “double housing starts.”

When’s that happening again now guys?
Who's financing it?

And speaking of government agencies and financing…

2. CMHC is quietly trying to exit the financing of multi-family projects.
Read that again.
And think about this combined with no foreign buyers allowed.

So the government shuts out foreign investment AND wants to bow out of backing multi-family projects themselves?
Oh, and at the same time they tell us they'll 'Double Annual Housing Starts'

By removing all capital?

Where are we at again today?
Oh ya, 50-year record-low housing starts.

And what will that do to prices through 2026 and 2027?
Well, that’s where point #3 comes in.

3. The mortgage qualification “stress test” may have made sense when rates were sub-2%.
Does it still make sense at 4%?

No.
And we have a history we can review without a stress test, pre-2017, a history with zero-down and 40-year amortizations — and that history suggests we did just fine.
As long as that Stress test stays in play, and supply remains limited, we will see one thing continue to happen.

Those who own some real estate will amass more.
They will tap into equity, and they will own more than one door.

And there's nothing wrong with Mom&Pop investors, without them the Vancouver rental market would be a much more brutal scene. As there's historically been very little purpose built rental product built - and what is coming online today... most of those units would have been sold to first time home buyers... but not with the current state of residential financing requirements.

More middle class Canadians have been shut out of home ownership by mortgage qualification standards tightening than by anything else.

There is only one way to make housing more affordable if we're not going to see price reductions. And we’re not.

A longer amortization is the only option.

But there's widespread disagreement within Ottawa over that matter — in no small part thanks to a ridiculous book that was air-dropped by the thousands across Parliament Hill by he-who-shall-not-be-named.

Conclusion
The only thing we’re building fast is frustration. And that’s no place to live.

So let’s demand better — not by tearing down the guardrails, but by clearing the roadblocks.

Let’s push for a process where one empowered team can pull all the threads together, where approvals happen in parallel instead of in purgatory, and where “urgency” actually means something. Where a department still feels like it’s part of the process — but whatever they need to process is streamlined radically. The one year thing, down to one month. The one month things, cut to one week.

Because if we don’t start fixing the system that oversees the permitting, construction financing, actual building, and purchase financing, it won’t matter how much political will, funding, or public support we drum up — nothing will change.

And change is overdue.

DW