Solving the housing crisis has been a central plank of the Liberal party during their decade in power, but progress has been elusive. Despite recognition of housing as a "fundamental human right" and pledges of tens of billions of dollars to housing programs, homelessness has risen and affordability has worsened.

Rising property values have impacted every corner of the market. As home prices have surged, the rate of homeownership has declined across the country, while buyers remain in debt for longer periods of time. Tenants pay higher rental costs, and building social housing is more difficult because of the cost of land.

Policymakers and economists blame high housing prices for a severe supply shortage. This line of thinking led the Canada Mortgage and Housing Corporation (CMHC) to call to double the rate of construction, to build 4.3 million new homes by 2035. 

The CMHC's proposal would increase Canada's housing stock by 25 per cent over a decade, even though they anticipate population growth of only eight per cent, leading to "abnormally high levels of unoccupied housing units," as the Parliamentary Budget Office observed. The CMHC's projected payoff is surprisingly modest: they anticipate real housing prices would only decline to pre-pandemic levels.

These issues point toward a more fundamental question: What is the evidence that a supply shortage has created the housing crisis to begin with? 

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