City of Montreal is “obstructing” new housing starts
July 12, 2023
City of Montreal administration has obstructed construction of 23,760 new housing units over the past six years charges a study published by the Montreal Economic Institute (MEI).
In the report, released July 5, 2023, MEI traces this obstruction to the 2017 election of Mayor Valérie Plante.
“By preventing the construction of tens of thousands of units, the Plante administration is contributing to Montreal becoming less and less affordable,” said Gabriel Giguère, public policy analyst at MEI and author of the study. “Since she took office, Montreal has blocked the construction of the equivalent of the city of Mirabel in new units.”
The city of Mirabel has 24,795 occupied private dwellings, MEI contends.
A study published in 2021 in the Journal of Urban Economics estimated that for every 1,000 high-end units built, 450 units were freed up in neighbourhoods where the average income is below the median (170 of which are in neighbourhoods where the average income is in the bottom quintile).
Based on this study, MEI estimates construction of new units currently obstructed or cancelled would have freed up at least 10,692 units in less affluent neighbourhoods (4,039 of which would have been in the poorest neighbourhoods of Montreal).
“Whatever the sale price of a new unit, its appearance on the market contributes to affordability by increasing supply and liberating other less expensive units,” explains Giguère. “By preventing these tens of thousands of units from being built, the Plante administration has directly contributed to rising housing prices.”
And contrary to the city’s demand for non-market rentals to be included in new residential projects, Montreal developers have complained this demand is not economically viable.