Last Thursday, the Institute for Socioeconomic Research and Information maintained that the solution to the housing crisis did not pass through the construction of housing by private enterprise. Today, a right-wing group claims the exact opposite.
“The construction of housing, regardless of the range, will be beneficial for society as a whole,” said, in an interview, Gabriel Giguère, author of a study by the Montreal Economic Institute (IEDM) on the projects houses blocked or hindered by the Plante administration.
The pro-market economy think tank lists nearly 25,000 homes that have not been built in Montreal since the election of the Projet Montréal party in 2017. “By preventing the construction of tens of thousands of units , the Plante administration is helping to make Montreal less and less affordable,” said Gabriel Giguère in a statement.
This number represents the equivalent of nearly 50% of all housing starts in the city of Montreal from 2017 to 2021, we read in the three-page note1.
The MEI study does not say so, but other municipal administrations are blocking housing projects, even in areas served by public transit or TOD such as Pointe-Claire.
The MEI study is in line with a report by La Presse which exposed the situation in December 20222.
In this report, the administration defended its record by arguing that housing starts were increasing before 2023. Recently, the executive committee also created a facilitating unit to speed up the approval process for real estate projects.
According to the MEI, the solution to the housing crisis and its affordability lies in the construction of housing, regardless of the price.
To support his claims, Mr. Giguère points to a study published in 2021 in the Journal of Urban Economics which estimates that for every 1,000 new homes built in the high-end category, 450 units become available in neighborhoods where the average income is higher. below the median income, including 170 in neighborhoods where the average income is in the bottom quintile. “These cascading shifts are felt relatively quickly,” says Giguère.
There is no consensus on the idea that the construction of high-end housing frees up cheaper housing, especially among elected officials. The mayor of Laval, Stéphane Boyer, has already said in the past that building housing units of $700,000 or more does not solve anything because it is affordable housing that is lacking in the market3.
“It’s a narrative that we hear at the municipal level, recognizes Mr. Giguère. When you look at the statistical data, it doesn’t hold up. »
In the Montreal region, housing starts are down 50% after five months in 2023, while they are increasing in Toronto and Vancouver, underlines the researcher. Yet all regions are grappling with higher interest rates and construction labor shortages.
