Canada's Housing Problem Isn't What You Think | CMHC Proves that Red Tape Kills Housing

CMHC Study: Stricter Land-Use Rules Likely Cause Higher House Prices (and Slower Supply) A new CMHC study using the Municipal Land Use and Regulation Survey builds a municipal land use and regulation index from factors like zoning restrictiveness, fees, approval timelines, and planning complexity, finding that when a city’s regulations become 10% more restrictive, house prices rise about 14% even after accounting for density, growth, and income. CMHC also finds stricter rules slow housing supply growth over time, with compounding effects, and uses an instrumental variables approach to test causality rather than simple correlation. The report highlights rezoning bottlenecks in Canada’s most unaffordable markets and points to “as-of-right” upzoning as a way to reduce uncertainty, delay, and veto points without eliminating planning. The script contrasts highly regulated, least affordable markets like Toronto, Vancouver, and Victoria with more affordable places like Montreal and Calgary, arguing approvals and land-use rules are major drivers of affordability. 00:00 CMHC Study Bombshell 00:35 How The Index Works 01:05 Restrictiveness Raises Prices 01:36 Supply Growth Compounds 02:00 Correlation Versus Causation 02:24 Rezoning Approval Bottlenecks 02:50 As Of Right Upzoning 03:47 Trade Offs And Takeaways 04:21 City Examples And Policy 05:07 Wrap Up And Questions