What Canada can learn from global housing supply strategies

What Canada can learn from peer countries

Canada faces a serious housing shortage. Decision-makers, governments, builders, non-profit housing providers and community partners are looking for proven ways to increase housing supply.

To help inform this work, CMHC examined housing supply strategies in 10 peer countries from G7 (Group of Seven) and the Organisation for Economic Co-operation and Development (OECD). These countries have used:

• innovative approaches
• major regulatory reforms
• long-term housing strategies

The evidence shows that countries facing similar housing pressures often rely on similar strategies. But results depend on how these measures are designed, implemented and coordinated.

What Canada is already doing

Through National Housing Strategy programs, provincial measures and municipal actions, Canada already uses many strategies found in the countries studied. These include:

• financial and tax incentives for housing developers, such as the Apartment Construction Loan Program, the Affordable Housing Fund, GST exemptions and provincial sales tax rebates on new construction
• provincial planning and development reforms to accelerate supply
• municipal land-use reforms, including those supported by the Housing Accelerator Fund and the Housing Design Catalogue

Some countries have kept housing supply growing steadily for decades. Their experience points to factors that could help Canada do the same—including modern construction methods, strategic use of public land, a mix of social and affordable housing providers and measures that keep construction going during market downturns.

What international experience shows

Coordinated strategies increase housing supply

Countries that have increased housing supply over time don’t rely on a single tool. Financial and tax incentives, zoning reforms, public land strategies and construction innovation work best when they support one another.

For Canada, this shows the value of an integrated approach. Using these tools together can increase housing supply over time, make individual measures work better and reduce unintended trade-offs.

Financial and tax incentives work best alongside other measures

Financial and tax incentives can help, especially when they address clear market gaps. They work best when they’re simple, predictable, well targeted, affordable to maintain and in line with broader housing policies.

Canada has supported housing supply through:

• National Housing Strategy financing programs
• federal tax incentives
• provincial and municipal measures

These include low-cost loans, property tax waivers, reduced development charges and related fee relief. A key insight is that these incentives work best when combined with regulatory, land-use and other public policy measures.

Land-use reforms expand housing opportunities

Land-use reforms can create more opportunities for housing. They work best when governments also invest in infrastructure, capacity and coordination across all levels of government.

Canada has introduced land-use and planning reforms to:

• speed up approvals
• support more housing, and
• allow higher density development

Examples include Ontario’s approval and permitting changes and British Columbia’s as-of-right density permissions near transit hubs—a rule that lets developers build to a set density without needing a special approval.

The Housing Accelerator Fund has also supported municipal reforms such as gentle densification, e-permitting, transit-oriented development and digital planning tools. International experience suggests that broad and durable upzoning can play an important role in expanding housing capacity. However, outcomes depend on local context, implementation, complementary infrastructure investment and ongoing monitoring and adjustment.

Modern construction methods can speed up delivery

Modern construction methods can speed up housing delivery, but need scale, certainty and investment. Japan and Sweden expanded modular and prefabricated housing by:

• supporting predictable demand
• consistent building codes
• efficient approvals, and
• targeted workforce training

Canada is promoting modern methods of construction, including modular, factory-built and prefabricated housing, to speed up delivery. The new Build Canada Homes agency aims to scale affordable housing through:

• public lands
• flexible financing
• large portfolio projects
• support for manufacturers, and
• procurement tools that build demand for modern methods of construction

The key lesson is that modern construction methods are a long-term supply strategy. They need coordinated and sustained policy support.

Public land can boost housing supply and affordability

Public land can play a major role in increasing housing supply and affordability. Integrated land development frameworks can help align land use, affordability goals, public land management and infrastructure planning.

Canada has expanded the use of public land for housing, including the 2024 Canada Public Land Bank under the Public Lands for Homes Plan, which list surplus federal lands online.

Public land practices differ across jurisdictions because they have different:

• mandates
• land inventories
• data systems, and
• delivery models

Many municipalities use Housing Accelerator Fund resources to acquire land and support non-market and affordable housing. Affordable housing projects can become more feasible with:

• public land
• low-interest loans, and
• more development capacity

Results depend on institutional capacity, governance coordination and market conditions.

Seven Themes That Consistently Matter

This study identifies 7 themes that matter for increasing housing supply across different countries, housing systems and policy environments.

Implications for Canada’s Housing Sector

Coordinated action is key to sustained growth

Sustained housing supply growth depends on coordinated action across governments and markets. It also requires multiple tools, working together. These include:

• financial and tax incentives
• land-use reform
• public land strategies
• public, non-profit and private partnerships, and
• construction innovation

Several interconnections are especially important:

• Incentives, land-use reforms and public land strategies work best together. Australia’s construction grants and the United States’ tax abatements were most effective when regulatory environments allowed new housing and approval times were predictable.
• Modern methods of construction depend on tailored financing, consistent rules and ready-to-build sites. Japan and Sweden have well-developed modern construction industries. They benefited from lower-cost financing, predictable planning systems and stable, performance-based building codes. These conditions made it easier to scale modular and prefabricated construction.
• Supporting diverse housing providers requires financial, land and regulatory tools. Austria's limited-profit housing associations and Switzerland's co-operative sector show how predictable incentives, access to affordable land and clear affordability requirements allow non-profit providers to build through all phases of the market cycle.

Managing market cycles helps sustain housing supply

Housing markets can be highly cyclical. Sharp downturns, such as those seen in Ireland and the U.S. after 2008, can halt construction for years and create long-term shortages. Extreme boom-bust cycles can weaken long-term supply capacity. Countries with more stable housing systems tend to preserve that capacity during downturns, often through strong non-profit sectors and adaptable construction industries.

Two areas stand out as especially important for strengthening long-term housing market stability.

1. A diverse mix of housing providers builds resilience

   Countries such as Austria, Germany and Switzerland have strong non-profit, co-operative and municipal housing providers that maintain more consistent housing delivery through economic cycles. A diverse mix of providers can lead to more resilient housing systems because each type contributes differently to supply and affordability.

   These countries build cross-sector partnerships and provide funding programs that draw on each group's strengths:

   • non-profits contribute long-term affordability expertise
   • private developers bring development capacity and capital
   • public housing agencies provide regulatory authority and system-level stability

   These models typically combine public land and infrastructure, stable rules, predictable low-cost funding, long-term affordability requirements and shared-risk mechanisms.

2. Modern methods of construction help production stay steady through downturns

   A strong off-site housing sector, alongside conventional construction, can help housing production adjust across economic cycles. Japan and Sweden show how traditional and off-site methods can work together. Off-site construction supports speed and precision, while conventional methods remain useful for custom, complex or higher-density projects.

   In both countries, modular and prefabricated housing expanded alongside supportive demand conditions, regulatory frameworks and financing arrangements:

   • Japan relied on post-war reconstruction, standardized systems, strong quality assurance and recurring needs tied to seismic, energy and disaster-resilient upgrades
   • Sweden built demand through public and municipal housing programs, timber-sector capacity, cold-climate advantages, clear standards and broad acceptance of industrialized construction

   In both cases, stable demand and supporting ecosystems helped off-site manufacturers and housing providers sustain capacity, scale delivery and stay resilient during downturns.

Coordinated systems drive lasting results

International evidence suggests that sustained housing supply gains depend on coordinated systems rather than stand-alone tools. Like a healthy forest sustained by an underground fungal network, housing markets rely on an interconnected ecosystem of in which financing, land-use regulation, public land strategies, construction innovation and diverse housing providers all shape outcomes.

Across the countries reviewed, housing supply strategies typically combined financing, land-use regulation, public land strategies, construction innovation and diverse housing providers.

For Canada, the findings point to the importance of coordination, scale and long-term commitment in shaping housing supply outcomes over time.

Further reading: What Canada can learn from global housing supply strategies