They say comparing the local housing market to others is the first mistake.
Montreal's housing situation is so bad that the city has been firmly knocked from its once-respectable spot on global real estate affordability lists. But the Institut de recherche et d’informations socioéconomiques (IRIS) asserts there are three myths — around how we compare to other cities, current housing supply, and governments' role in the situation — that overshadow the full extent of the local housing crisis.
A new IRIS study not only counters misconceptions about how Montreal sizes up against other cities, whether more houses should be built, and if the government should be considered a housing "saviour," it also underscores how those beliefs could be harming the future of the housing market.
The claim that Montreal is more affordable than Vancouver or Toronto, for instance, is the first myth that the IRIS report aims to deconstruct.
"Too often, we forget that Montreal is operating within the Canadian real estate market, which is one of the most unaffordable in the world," said Marie-Sophie Banville, the IRIS associate researcher who conducted the study.
"We often console ourselves by saying that, in terms of affordability, Montreal is better off than Vancouver and Toronto, but that doesn't acknowledge that those two cities are at the bottom of the list," said Banville.
Vancouver is the most unaffordable city in North America, followed by Toronto, according to this year's Demographia International Housing Affordability (DIHA) list. The cities rank respectively as the third and tenth most unaffordable cities in the world.
Any city with a median housing cost ranking over 5.1 is deemed "severely unaffordable." Toronto came in with a median of 10.5, while Vancouver hit 13.3. Montreal, while not as bad, is still in the severe zone, ranked at 6.1.
Moreover, the IRIS report found the new housing price index in Montreal rose by 314% between 2000 and 2022. That's a meteoric price shift more significant than that experienced by some of the largest cities in North America, including Los Angeles (+296%), San Francisco (+267%), and New York (+158%).
But Banville cautions against falling into the trap of calling for more housing to be built. Federal initiatives to make housing more affordable fuel demand at an unattainable pace, she said.
Support measures, like public mortgage financing, have caused demand to grow faster than supply which has caused real estate prices to escalate at an unprecedented rate in recent years.
"The housing shortage is doomed to stay chronic if Ottawa's approach that focuses on stimulating and supporting demand isn't reviewed and corrected," said Banville.
Measures that generate a sustainable supply of affordable housing, like cooperatives, land trusts, and social housing, are more effective in responding to Montreal's housing needs, Banville argues. Public policies should also stop fuelling demand by focusing on "personal assistance" when it comes to rental housing and access to property.
"The government won't be able to achieve its own objectives of improving housing supply, even if it follows through on the construction of 160,000 new units per the National Housing Strategy, if it doesn't factor in the demand that it's stimulating," Banville said.
The researcher also called out seeing governments as "saviours," especially when it comes to helping young aspiring homeowners. That kind of discourse allows elected officials to maintain a position of innocence by presenting themselves as "life-saving intermediaries who grant dreams, instead of actually being the architects of Canada's housing crisis," she said.
But while the provincial and federal government have contributed to the current crisis, Banville said they also have the power to turn things around.
Measures like taxing housing speculation and quick resales, taxing 100% of the capital gain on secondary properties, and making purchase offers public would more effectively respond to the housing crisis.
"If those who are genuinely looking to buy a home got a non-speculative and affordable offer in perpetuity (i.e. cooperatives, land trusts, social housing, etc.) that was supported by governments, we might actually see a way out from this crisis," she said.