Jul 20 2023 22 mins 2
I planned on moving on to a different topic, but I'm going to stick with housing for now. Last week I looked at concentration in the building supply industry and how it could increase cost of housing. This week I'm looking at concentration in the real estate development industry and that potential impact on the supply of housing. CMHC issued their report in 2022 and said we need to build 5.8 million new homes by 2030, we were on pace to build 2.3 million and need to add on another 3.5 million homes. My question is who is going to build those homes?
The short answer is always the generic 'private sector'. Housing is challenging to look at from a Competition Bureau perspective because so much is done at the Municipal level. Plus it's hard to define the competitive market. Does Toronto real estate compete with Ottawa? What about Halifax and Dartmouth? But I think the Municipalities and Provinces can and should look at the market dynamics of their development industries and act to increase the capacity of their real estate development industries by acting to encourage new entrants. And the Federal Government has their own ways they can act to increase supply of housing.
Error from the episode: It was Upton Sinclair, not Ralph Waldo Emerson who said "it's hard to get a man to understand something their wallet depends on them not understanding."
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