According to this report (2023) from the Centre for Cities, the UK has a backlog of about 4.3 million homes. This is in comparison to other Western European countries for the period from 1955 to 2015.
Said differently, these 4.3 million homes are effectively missing from the UK's national housing market because it failed to build and deliver at the same rate as some other rich countries.
The report also argues that this housing shortage started not at the end of the post-war period, but at the beginning of it in the 1940s.
So what do they propose? The following:
Increase housing supply where new homes are needed. More homes are built in Wakefield than Oxford. Building in places with fewer jobs won’t fix prosperous cities’ housing crises.
Planning reform to introduce a new flexible zoning system that would allow builders to build if they follow the rules, while maintaining special protections for National Parks, Conservation Areas etc.
Zoning of land in walkable distances around train stations in the green belt for suburban living and with protected green space, which would provide 1.8 to 2.1 million homes.
Increase the use of permitted development rights to cut the red tape that makes it hard to build upward extensions or infill developments.
Stop subsidising home ownership. Despite Right to Buy, home ownership as a share of private housing has fallen in every city since 1981. The Government should stop subsidising ownership, tax housing wealth increases by abolishing the Capital Gains Tax exemption for primary residences and treat owning and renting equally.
None of these proposed solutions should come as a surprise. We know that housing follows money/jobs. And we know that if we want more of it, we need to remove the barriers to building it, especially around higher-order transit.
Image: Bloomberg
The Canada Mortgage and Housing Corporation (CMHC) just published its latest housing supply report for Canada’s 6 largest city regions (downloadable over here).
One figure that stands out is the increase in housing starts in the Calgary CMA — it was up almost 63% last year compared to 2020. This is a positive indicator for that market.
It’s also worth mentioning that Calgary’s supply is more evenly split between low-rise and apartment housing. This is in contrast to markets like Toronto, where 3/4 of all new housing is now “apartment”, and in Montreal, where the percentage is even higher.
My view is that it’s time to get more granular with our reporting of higher density housing. In the above example, we are showing 3 categories for grade-related housing and only 1 for anything outside of that.
This is our national bias toward low-rise housing coming through.
According to Bloomberg (using data from CMHC), 2017 was a surprising record year for housing starts in Canada: 219,675 units. This is the most since 2007 and is up from 197,916 units in 2016.
The explanation: job growth (nearly 400,000 new jobs) and population growth were both more robust than expected.
Multiple unit project starts are also up significantly with 142,840 units starting in 2017. This is a 15% increase from the prior year. Of these units, 102,516 of them were “apartment-like homes.”
But all of this is nationwide data. Look at what happened in Toronto and Vancouver:
The increased activity mostly sidestepped land-constrained Toronto and Vancouver, the country’s two most expensive markets, but was robust in the suburbs and less pricey surrounding cities. Starts in Toronto fell 1 percent to 38,738 in 2017, while declining 6 percent in Vancouver to 26,204 units.
This is not because of a lack of demand. It’s becoming systematically more difficult and more costly to build new housing in these two markets.