Mathieu Laberge, Chief Economist at the Canada Mortgage and Housing Corporation, has a good article out today on why you can’t subsidize your way out of Canada’s housing affordability crisis: simply helping potential homeowners with their mortgage payments ends up raising house prices for everyone. This in turn raises the price-to-income ratio for housing and deepens the housing affordability crisis overall. To avoid this outcome, you need policies to promote homebuilding and increase the housing supply beyond projected levels.
A good following on housing policy in Canada, particularly on supply-side interventions, is economist Mike Moffatt of the Missing Middle Initiative.
