Housing Policy in Areas of Significant Growth
Housing Policy in Areas of Significant Growth – Positive Measures
In areas of rapid economic growth, sudden increases in the demand for housing can result in
housing shortages, price increases and rent increases. This policy statement addresses that
situation.
The most appropriate policy response is to allow the housing market to operate as freely as
possible. Eliminating or reducing restrictions on housing supply will allow a rapid increase in
supply. That will produce more housing, alleviating both the housing shortages and the price and
rent increases. An improved tax position for rental housing would result in more rental housing
construction. Key changes would be allowing tax deferral on the capital gains and recapture on
the sale of one rental property and purchase of a replacement property; and increasing the rate of
Capital Cost Allowance, perhaps by front-end loading it as is done in a number of other countries.
Appropriate Government Measures to Facilitate Increased Supply
Expedite land use, planning and building approvals for new construction
Expedite land use, planning and building approvals for renovations and suite additions
Allow accessory suites without planning approvals (either permanently or temporarily)
Allow the rental of rooms in all zones (either permanently or temporarily)
Allow employers to provide temporary accommodation in areas zoned non-residential
Allow builders to sell new housing without full finishes
Allow builders to sell houses with temporary accessory suites in new sub-divisions
Ensure new roads and sewer and water services are expedited to allow new sub-divisions
Make surplus government land available for new rental construction of all types
Make surplus government buildings available for conversion to temporary or permanent
housing or other facilities
Facilitate the expansion or addition of mobile home parks
Reduce the income taxes on rental property
o Allowing deferral of tax on capital gains and recapture
o Allowing increased capital cost allowances
To Mitigate the Effect of the Increase in Demand
Provide housing allowances to residents with low incomes, ensuring that the program
design does not increase demand at the margin.
Conclusion
Many of the specific measures are the responsibility of the provincial or municipal governments.
However, the federal government can help with
Infrastructure funding
Making federal government land or buildings available for redevelopment
Reducing income taxes on rental property
Providing funding for housing allowances
By the means listed, housing supply will increase, which will solve the dual problems of
availability and price levels.
