Forget 500,000: Why Canada’s Real Housing Target Is Smaller and Smarter
For years, the industry I work in has been handed a single number and told to build toward it: 500,000 homes a year. It became the political shorthand for solving the housing crisis. But numbers without context are just noise, and a growing chorus of housing economists is now making the case that this particular number was built on assumptions that no longer hold.
A recent conversation between economist Mike Moffatt and journalist Sabrina Maddeaux on the Missing Middle podcast lays out the case plainly. The 500,000 figure traces back to CMHC modeling built when Canada’s population was climbing by roughly a million people a year. With immigration targets scaled back and non-permanent resident levels falling, population growth is expected to settle into a range of 300,000 to 400,000 annually within a couple of years. Build for the population you actually have, and the target drops to somewhere between 200,000 and 350,000 starts a year, depending on how aggressively the country wants to close its existing affordability gap.
This is exactly the kind of recalibration that matters most to the people planning projects on the ground. Housing starts targets set the tone for municipal approvals, infrastructure funding decisions, and the feasibility models developers run before a shovel ever hits dirt. A target built on outdated population assumptions can push a market toward oversupply in one segment while starving another. That is not a small risk. It shapes which projects get financed and which communities get built out of proportion to what they actually need.
The more important point for anyone in land development is what Moffatt calls the composition problem. A housing start is counted the same whether it is a studio apartment or a four bedroom townhome, yet a high rise unit houses roughly half as many people as a ground oriented home. Canada has shifted heavily toward high density product over the past two decades, which means the raw starts number increasingly understates the real housing shortfall for families. Building five towers of one and two bedroom units does not solve the same problem that five townhome blocks would.
Building five high-rise units doesn’t have the same impact on the housing crisis as five townhomes. If we’re relying on high-rises to fill the shortage, we need closer to ten of them to match the impact of five townhomes.
For developers and city planners, this reframes the entire feasibility conversation. It is not simply a matter of hitting a unit count. It is about matching product type to actual household need, particularly the shortage of family sized homes near major economic centres. Immigration policy remains the wildcard. Developers who continue building at scale are, in effect, betting that Ottawa eventually raises immigration levels again for economic reasons. Those who are pulling back are betting the opposite. Either way, the smart play for anyone planning a large scale project right now is to stop chasing a headline target and start underwriting to realistic demand, unit mix, and delivery cost. That is where the next decade of feasible, financeable development will actually be won.
