By Peter Copeland, September 23, 2025
Behind the clichéd tropes of the car, family, and white picket fence lies an enduring reality: the home as an anchor of opportunity and social well-being. Homeownership across social classes, especially among intact families, is both a bellwether of social vitality and a key to untying the Gordian knot of demographic-related policy challenges facing Canada and the United States.
For too long, housing debates have been stuck between stale paradigms: government subsidies or market liberalization without purpose, which we see continued in recent Canadian federal attempts to subsidize non-market housing, or provincial efforts that do not meaningfully address the regulatory glut that is driving the shortage of affordable housing. What we need is housing that supports families – because strong families are the foundation of healthy communities, which in turn sustain a productive, resilient workforce. That means building the kinds of homes people want to raise families in – not defaulting to urban density high-rises where singlehood, transient relationships, and pet “parenthood” dominate.
Family, community, and housing: bellwethers of social vitality and demographic resilience
While singlehood has its place and pets are just fine, this lifestyle cannot be the foundation of a flourishing society. The family is the first society and the “school of love.”
Marriage and intact families outperform other household types on nearly every metric: children raised by married biological parents tend to have better educational, behavioural, and cognitive outcomes, even when controlling for confounders. Marriage boosts male productivity, and family well-being, and social trust, civic engagement, and public safety all correlate strongly with stable, family-rich neighbourhoods. What’s more, family-friendly housing helps women, as they find in it secure, sufficient, and nurturing space to raise children. The flight to the suburbs is the flight to family-friendly housing.
Yet marriage and family formation do not exist in a vacuum. Cultural shifts have collectively weakened the economic and social basis for marriage. There’s many factors at play: rising individualism; adversarial feminist norms that devalue motherhood; liberalized divorce laws; and economic shifts – like deindustrialization and the orientation of the economy toward financialization and the service sector – resulting in the decline in stable, middle-skill jobs for men, lowering their “marriageability.” Among these factors, few are as tangible as the inability to afford a home.
The cycle is vicious and mutually reinforcing. Unaffordable housing delays or prevents marriage and childbearing. Housing markets, in turn, orient towards a mobile, unattached lifestyle – especially in major urban centres. This drives policymakers to prioritize housing that caters to singles rather than families. Yet the desire for family remains: in Canada, nearly half of women – particularly those nearing the end of their reproductive years – want more children than they expect to have; in the US, large shares of women under 35 want children but haven’t started.
Given the impending demographic crunch of aging populations, low fertility, and shrinking working-age cohorts, the scarcity of family-friendly housing is not just a cultural concern – it is an economic and fiscal threat. Without policy intervention, social supports like the Canada Pension Plan or Old-Age Security and US Social Security will strain under the weight of fewer – mostly younger – workers supporting more retirees.
Family-friendly affordable and available housing is a first domino linked to these problems that are already with us and set only to worsen with time. Stable families anchor community. And community provides the stability that we need for a productive labour force.
Federal policy: the failure of government subsidies and unfocused deregulation
Canada’s 2017 National Housing Strategy (NHS) committed over $115 billion through programs like the National Housing Co-Investment Fund, Canada Housing Benefit, and Rapid Housing Initiative. Yet these subsidy-heavy strategies have not reversed affordability declines. Delays, poor targeting, and inefficient program design blunt their effect.
In the decade since the NHS began, housing supply and affordability have worsened. Canada’s Parliamentary Budget Office projects that, by 2027, an additional 926,000 Canadian households will be in housing need compared to when the NHS was launched a decade earlier. That’s despite an average annual spending increase of $3.5 billion on housing over the 10 years of the program, compared to the previous decade. The pandemic played a role, as did a record spike in immigration and falling disposable income-to-housing price ratios (much worse in Canada than the US), but the subsidy-heavy policy failures are clear.
In the US, since the mid‑1990s, federal housing policy has largely stabilized low‑income renters through vouchers and the Low-Income Housing Tax Credit (LIHTC). The Home Mortgage-Interest Deduction (HMID) mostly benefits existing homeowners, while housing block‑grants have stagnated in real terms. The bottom line is that the federal subsidy-heavy approach in the US hasn’t done much to increase the ownership-oriented, family-sized stock or addressed the national supply shortfall.
Looking at the major policy announcements to date from the new Canadian government led by Prime Minister Mark Carney – who took office in March 2025 – we see a continuation of the old ways of government subsidization, where the government works with the private sector to subsidize non-market housing. While an important subset of the housing continuum, “affordable housing” is not the same as broad housing affordability. The former is subsidized non-market housing, needed for a relatively small portion of the population. But what most Canadians need is market housing that is affordable. Build Canada Homes will focus only on non-market housing. On the other hand, what the federal Conservatives have put forward – federal tax breaks on all home purchases – is little better. It might bring down costs for new homes by a few percentage points, but may also stimulate demand, which, absent a commensurate increase in supply, can lead to higher prices over time.
As will be argued below, the principal impediments to growing a supply of market housing that’s affordable are regulatory glut (in the form of extensive permitting and approval timelines), restrictive zoning, and excessive fees resulting from environmental regulations and development charges. What’s needed from the federal government is neither tax breaks that might increase demand and prices, nor government-subsidized housing. Instead, it’s a carrot with a stick to the provinces that has the potential to move the needle. As my colleague, MLI Managing Editor Daniel Dorman, and I have argued, Ottawa provides considerable infrastructure funding and other housing-related transfers that could be made conditional upon targeted deregulation efforts on the part of provinces and municipalities, thereby providing the leverage and incentive to tackle the core of the affordability and supply challenge.
Provincial and state level efforts: Regulation, fees, and the wrong kind of supply
On the “build, build, build” side, the deregulation instinct is often unfocused – producing high-rises clustered near transit rather than the mid-density, ground-oriented homes families need. Regulatory glut unquestionably drives costs but so do impact fees (US) and development charges (Canada), which finance infrastructure and utilities for new housing. Targeted regulatory reform to induce the creation of family-friendly housing, rather than indiscriminate slashes, are needed.
In Canada, development charges and the overall government fee effects on housing are steep, at over 36 per cent of the cost of a home. Zooming in on development charges, in the 1990s, Ontario’s Progressive Conservative government slashed provincial infrastructure grants from 37 per cent to less than 20 per cent of municipal revenue in just five years. Over time, that’s pushed municipalities to recoup more costs through various types of levies, including development charges.
In Ontario, between 2002–2024, the rate of development charge increases on single detached units outstripped inflation and construction prices considerably, by over 100 per cent in many municipalities. In the province, they now form a dominant and growing share of municipal capital financing – 51 per cent of municipal infrastructure now comes from municipal own-source revenues vs. eight per cent provincial and 11 per cent federal transfers – reflecting the shift from provincial grants to municipal own-source funding. Absent policy reform to fund housing-related infrastructure by other means, this municipal download has contributed to a situation where today, development charges can add up to $200,000 to a home and total $3.5 billion annually. While Ontario’s recent Protect Ontario by Building Faster and Smarter Act caps required studies associated with the charges and eases the process of charge reductions, these steps will fail without compelling municipalities to act and replacing the lost revenue for essential infrastructure.
Another supply failure is the focus on “affordable housing” or non-market forms of housing, a favoured approach of left-leaning governments. There is a disproportionately high prevalence of single-parent families living in assisted housing. In Toronto, for example, 25 per cent of households living in units operated by Toronto Community Housing Corporation (TCHC) – subsidized at 40 per cent by the City of Toronto – are single-parent households, compared with 16.4 per cent of single-parent census families in Canada. This means that single parents are over 1.52 times more likely to need subsidized housing, suggesting that single-parent families are disproportionately represented in the social housing population. Rather than further subsidize housing of this type to make single parenthood a more feasible option, policymakers should think about the perverse disincentives subsidized housing can have on family structure.
In the US, impact fees can add $20,000–$50,000 (or more) to single-family homes, especially in fast-growing suburbs. The US story is parallel to many parts of Canada where housing issues are most acute: as state and federal aid fell, impact fees spread rapidly from the 1970s onward. The most recent National Impact Fee Survey finds the average single-family home now carries about $13,600 in fees – up from around $8,000 in the early 2000s – with California, Florida, and Washington often charging two to three times the national average.
Like Canadian development charges, they front-load infrastructure costs onto buyers rather than spreading them over time – locking out younger households. Both systems make family housing less attainable.
Vancouver is at the centre of the housing crisis in Canada. Its current left-wing New Democratic Party (NDP) government has enacted significant zoning reforms – legalizing fourplexes, allowing tall buildings near transit, scrapping parking mandates – but affordability and supply haven’t followed, thanks to recent increases in population pressure from immigration and slow income growth that mirrors other major Canadian cities. The province also has significant rent controls, which further disincentivize rental supply. Notably, both Ontario and BC saw steep housing start declines in early 2025 despite these changes.
At the state level, the US is a very mixed bag when it comes to family-friendly housing. Wharton’s land-use regulation index documents the substantial cross-jurisdiction differences in land-use regulations: blue states show up as more restrictive, while red states are less so. Blue states like California, Massachusetts, and New York exemplify subsidy-heavy, regulation-intense models. Despite large subsidies, their strict environmental rules and inclusionary mandates make their housing persistently unaffordable. California’s median home price still exceeds $850,000 despite years of ambitious targets.
By contrast, red states like Texas, Florida, and Tennessee have embraced zoning flexibility. For example, Florida’s Live Local Act overrides local zoning and land-use rules, enabling developers to build mixed-use housing on commercial, mixed, or industrial zoning with few local approval processes, reducing the time and cost to build a targeted housing type. There’s also Texas’s minimum-lot-size reforms which promote expedited permitting and strategic boundary expansion – delivering abundant family-suitable housing. These states are magnets for families: the Institute for Family Studies (IFS) reports that from 2021–22, roughly 180,000 more families moved from blue to red or purple states than vice versa. Fertility rates reflect this: South Dakota (2.01), Texas (1.81), Utah (1.80) lead, while blue states like Vermont (1.30) and California (1.48) lag.
IFS research shows housing costs are a top deterrent to childbearing. It also finds that 79 per cent of Americans prefer detached, single-family homes – preferences the red states’ land-use policies accommodate. Ed Glaeser’s urban economics work further confirms that cities with pro-business climates, regulatory openness, and available land – often in the Sunbelt – outperform in population growth and affordability, creating fertile ground for family formation.
What we need: housing that actually supports families
In lieu of the failed and stale policy poles of deregulation and government subsidization, we need an approach that harnesses the market to build family-friendly housing through targeted regulatory elimination, and revision.
Many housing proposals today are fixated on density near transit – rezoning to allow high-rises in nodes and corridors – without giving sufficient attention to the types of homes being built or the families who need them. But small condos stacked on transit lines are no substitute for neighborhoods where families can thrive as evidence shows that most people in Canada and the US want single-family homes with plenty of space. These housing arrangements are most conducive to family formation in the great white north and America alike.
To change this, we need zoning reform to legalize ground-oriented housing – like duplexes, triplexes, townhouses, and small walk-up apartments – in medium-high density neighbourhood settings. These forms provide sufficient space, privacy, and the close community connection that single adults may not demand, but which are essential to raising children and sustaining long-term residency.
As economist Lyman Stone recently noted in conversation with me, a key constraint in housing policy reform is the relationship between total gross floor area and lot size: the floor area ratio (FAR). Unless municipalities align these properly, you can get counterproductive results. In some areas, lot sizes have been increased, but FARs remain capped too low, meaning you can’t build homes big enough for families. In others, lot sizes have shrunk, but FARs weren’t adjusted, forcing tiny homes onto small plots that still don’t allow for needed square footage. The sweet spot is smaller lot sizes for more affordable land access, paired with higher FARs that enable developers to build the kinds of homes – 3 or 4 bedrooms, yards, proper kitchens, and living spaces – that families actually want to live in.
Walkability, green space, and embedded services must also be designed into the fabric of new development. Simply increasing density without building neighborhoods – without parks, schools, childcare, and social infrastructure – guarantees alienation, not community. Family-oriented policies like New Westminster, British Columbia’s requirement that at least 30 per cent of new units be two- or three-bedroom homes, with minimum size requirements and intentional neighborhood planning, offer a viable model for other jurisdictions.
Then there’s the issue of cost – specifically, the steep price increases driven by development charges (Canada) and impact fees (US). These charges cover essential infrastructure like water, roads, and sewers, but are typically paid up front by developers and passed directly to homebuyers – to the cost of new homes in many parts of Ontario. There are better ways to fund them. Provinces and states could cover a larger share of these infrastructure costs – especially for housing that advances social policy objectives, like family formation or workforce retention. Alternatively, spreading these costs out over time – through slightly higher property taxes or more sophisticated utility pricing models – would reduce the sticker shock that blocks young families from buying homes. As economist Ben Dachis has argued, municipalities could fund water and wastewater infrastructure through standalone utilities that rely on user fees amortized over time, rather than one-time development charges that bloat housing prices before a single pipe is laid.
And while environmental concerns have historically blocked development at the urban edge, environmentalists are now well in retreat. After decades of their paranoid and prohibitively costly policies, such measures are looked on with disfavour or disinterest by voters in Canada, the US, and the broader Western world alike. Now is the time for measured, responsible boundary expansion. Canada and the United States are not like tiny, landlocked European nations – we have a superabundance of developable land. Canada, in particular, has a vast stock of Crown land – almost 90 per cent of its total landmass – which could be opened up judiciously, following the federal government’s recent early lead on this front to meet demand. The greenbelts around major urban cities should not be a sacrosanct museum. They should serve the needs of a living, growing society in sustainable ways. Land-use planning should prioritize families, not preservation for its own sake.
Finally, we need zoning rules that reflect family and community values. That means enabling density within neighbourhoods, not just around transit, while ensuring that nuisance land uses – like strip clubs, cannabis shops, and drug injection sites – are kept out of residential areas. If we want children to grow up in safe, walkable, socially cohesive neighborhoods, we have to zone like it.
Affordable, family-suitable housing is not just social policy – it’s economic infrastructure. It anchors the workforce, especially for non-college-educated workers in trades, services, and caregiving. When housing is unattainable, communities hollow out, labour markets destabilize, and local economies suffer.
If we want to reverse demographic decline, restore social trust, and stabilize the workforce, we have to prioritize the production of real homes – not just more undifferentiated housing “units” – rooted in neighbourhoods, designed for family life, available to those from all walks of life, and supported by smart financing and zoning. Housing should be a lever for renewal, not a barrier to it.
Peter Copeland is deputy director of domestic policy at the Macdonald-Laurier Institute.
