The main challenges associated with the creation of affordable housing programs are the high development costs, the low profit associated with programs, and the difficulty in funding these programs. January/February 2022 // Canadian Government Executive / 17 HOUSING rectly encouraging speculative home-buying behavior and pushing mortgage debt to a record-high of $1.66 trillion by the end of 2020, leaving individuals and the economy vulnerable to sudden market corrections. Changing demographics also pose a risk to the real estate industry, with stalled population growth and an estimated 60% drop in immigration since the start of the pandemic. In addition, the pandemic has had a disproportionately negative impact on lower-income populations and women, pushing unemployment to more than 9% and making housing affordability out of reach for many. Finally, rising prices have put additional pressure on rental stock and have increased demand for a limited supply of affordable rental units both for middle class to low income families, which in turn decreases affordability. On the supply side, a lack of affordable rental units, housing stock in disrepair, and the failure to support vulnerable populations are just a few of the immediate needs that must be addressed by a revitalized housing policy. In an attempt to solve these supply issues, and after playing a minor role in the affordable housing sector for several decades, the federal government implemented the National Housing Strategy (NHS) in 2017, which commits funding to building affordable housing supply. This program, however, does not currently serve an estimated 12 million households in need of core housing, increasing demands for further action by the federal government. The lack of affordable housing supply has also reached a crisis point in northern territories and rural regions, having a direct impact on Canada’s Indigenous communities. These communities are facing dangerously poor housing conditions, but high construction costs and expensive maintenance make it impossible for these communities to maintain existing housing stock. If the market continues untamed, there is a real risk for a housing bubble that may result in mortgage deferrals and a sudden drop in housing values, putting homeowners and the economy at risk. The Intergovernmental Structure of Housing Policy in Canada In Canada, the federal government controls fiscal and monetary policy to influence interest rates, which have a direct impact on the housing market. It also has several agencies responsible for overseeing housing, such as the Canada Mortgage and Housing Corporation (CMHC) to perform housing research, provide mortgage insurance, and more recently, to deliver funding for the construction of affordable housing under the National Housing Strategy (NHS) established in 2017. Historically however, the federal government has had varying degrees of involvement in setting and executing housing policy. Following World War II, the federal government began playing a more important role by building war homes and the implementation of social housing programs up until the late 1980s. In the 1990s, however, during a period of extreme austerity, the government’s focus shifted to monetary policy and it tightened the reigns on fiscal policy, which meant abandoning any involvement in the direct supply of housing. The result of less federal involvement meant that the responsibility for housing fell to provincial and territorial governments and, to some extent, the private sector. Today, provincial and territorial governments execute on housing strategy through specific legislation, the regulation of building standards, and landlord-tenant relationships. Consequently, municipal governments, which are creations of their respective provincial governments, have taken on much of the responsibility for housing and overseeing land zoning, housing development, and infrastructure maintenance. Recently, the federal government has once again become more involved in the delivery of housing programs, implementing the country’s first National Housing Strategy (NHS) in 2017. This strategy mandates CMHC to provide over $70B in funding initiatives to increase the supply of non-market, affordable housing to strengthen the middle class. Over the course of the NHS, provinces and territories housing programs will receive $20.5 billion, of which they are expected to cost-match half of the investment. These initiatives and the ever-changing intergovernmental structure has had a number of consequences for all levels of government. Intergovernmental Challenges Measures taken by the federal government in the 1990s has promoted the “financializa-
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