Land Use Regulations and the Impact on Housing in Canada

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In this Research Insight, see how housing affordability in Canada is shaped by land regulation and new home development.

Land use regulations strongly affect housing affordability and supply. Stricter rules lead to higher costs and slower housing growth. More restrictive rules increase prices and reduce how many new homes are built each year. These challenges are greatest in Canada’s most expensive, high-demand markets. In these areas, rezoning approval rates are lower, making it harder to add new housing.

Recent reforms, such as the Housing Accelerator Fund, are a positive step forward. Relaxing zoning rules can support more housing development. Improving permitting processes, such as e-permitting, can speed approvals. Evidence shows these rules directly affect prices and supply. Ongoing municipal review is important to support housing supply and affordability goals.