From the Fraser Institute

By Tegan Hill and Austin Thompson

Calgary’s new mayor, Jeromy Farkas, has promised to scrap “blanket rezoning”—a policy enacted by the city in 2024 that allows homebuilders to construct duplexes, townhomes and fourplexes in most neighbourhoods without first seeking the blessing of city hall. In other words, amid an affordability crunch, Mayor Farkas plans to eliminate a policy that made homebuilding easier and cheaper—which risks reducing housing choices and increasing housing costs for Calgarian families.

Blanket rezoning was always contentious. Debate over the policy back in spring 2024 sparked the longest public hearing in Calgary’s history, with many Calgarians airing concerns about potential impacts on local infrastructure, parking availability and park space—all important issues.

Farkas argues that blanket rezoning amounts to “ignoring the community” and that Calgarians should not be forced to choose between a “City Hall that either stops building, or stops listening.” But in reality, it’s virtually impossible to promise more community input on housing decisions and build more homes faster.

If Farkas is serious about giving residents a “real say” in shaping their neighbourhood’s future, that means empowering them to alter—or even block—housing proposals that would otherwise be allowed under blanket rezoning. Greater public consultation tends to give an outsized voice to development opponents including individuals and groups that oppose higher density and social housing projects.

Alternatively, if the mayor and council reform the process to invite more public feedback, but still ultimately approve most higher-density projects (as was the case before blanket rezoning), the consultation process would be largely symbolic.

Either way, homebuilders would face longer costlier approval processes—and pass those costs on to Calgarian renters and homebuyers.

It’s not only the number of homes that matters, but also where they’re allowed to be built. Under blanket rezoning, builders can respond directly to the preferences of Calgarians. When buyers want duplexes in established neighbourhoods or renters want townhomes closer to work, homebuilders can respond without having to ask city hall for permission.

According to Mayor Farkas, higher-density housing should instead be concentrated near transit, schools and job centres, with the aim of “reducing pressure on established neighbourhoods.” At first glance, that may sound like a sensible compromise. But it rests on the flawed assumption that politicians and planners should decide where Calgarians are allowed to live, rather than letting Calgarians make those choices for themselves. With blanket rezoning, new homes are being built in areas in response to buyer and renter demand, rather than the dictates of city hall. The mayor also seems to suggest that city hall should thwart some redevelopment in established neighbourhoods, limiting housing options in places many Calgarians want to live.

The stakes are high. Calgary is not immune to Canada’s housing crisis, though it has so far weathered it better than most other major cities. That success partly reflects municipal policies—including blanket rezoning—that make homebuilding relatively quick and inexpensive.

A motion to repeal blanket rezoning is expected to be presented to Calgary’s municipal executive committee on Nov. 17. If it passes, which is likely, the policy will be put to a vote during a council meeting on Dec. 15. As the new mayor and council weigh changes to zoning rules, they should recognize the trade-offs. Empowering “the community” may sound appealing, but it may limit the housing choices available to families in those communities. Any reforms should preserve the best elements of blanket rezoning—its consistency, predictability and responsiveness to the housing preferences of Calgarians—and avoid erecting zoning barriers that have exacerbated the housing crisis in other cities.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Austin Thompson

Senior Policy Analyst, Fraser Institute

From the Fraser Institute

By Jock Finlayson

At a time when Canadians are grappling with epic housing supply and affordability challenges, the data show that homebuilding continues to come up short in some parts of the country including in several metro regions where most newcomers to Canada settle.

In both the Greater Toronto area and Metro Vancouver, housing starts have languished below levels needed to close the supply gaps that have opened up since 2019. In fact, the last 12-18 months have seen many planned development projects in Ontario and British Columbia delayed or cancelled outright amid a glut of new unsold condominium units and a sharp drop in population growth stemming from shifts in federal immigration policy.

At the same time, residential real estate sales have also been sluggish in some parts of the country. A fall-off in real estate transactions tends to have a lagged negative effect on construction investment—declining home sales today translate into fewer housing starts in the future.

While Prime Minister Carney’s Liberal government has pledged to double the pace of homebuilding, the on-the-ground reality points to stagnant or dwindling housing starts in many communities, particularly in Ontario and B.C. In July, the Canada Mortgage and Housing Corporation (CMHC) revised down its national forecast for housing starts over 2025/26, notwithstanding the intense political focus on boosting supply.

A slowdown in residential construction not only affects demand for services provided by homebuilders, it also has wider economic consequences owing to the size and reach of residential construction and the closely linked real estate sector. Overall, construction represents almost 8 per cent of Canada’s economy. If we exclude government-driven industries such as education, health care and social services, construction provides employment for more than one in 10 private-sector workers. Most of these jobs involve homebuilding, home renovation, and real estate sales and development.

As such, the economic consequences of declining housing starts are far-reaching and include reduced demand for goods and services produced by suppliers to the homebuilding industry, lower tax revenues for all levels of government, and slower economic growth. The weakness in residential investment has been a key factor pushing the Canadian economy close to recession in 2025.

Moreover, according to Statistics Canada, the value of GDP (in current dollars) directly attributable to housing reached $238 billion last year, up slightly from 2023 but less than in 2021 and 2022. Among the provinces, Ontario and B.C. have seen significant declines in residential construction GDP since 2022. This pattern is likely to persist into 2026.

Statistics Canada also estimates housing-related activity supported some 1.2 million jobs in 2024. This figure captures both the direct and indirect employment effects of residential construction and housing-related real estate activity. Approximately three-fifths of jobs tied to housing are “direct,” with the rest found in sectors—such as architecture, engineering, hardware and furniture stores, and lumber manufacturing—which supply the construction business or are otherwise affected by activity in the residential building and real estate industries.

Spending on homebuilding, home renovation and residential real estate transactions (added together) represents a substantial slice of Canada’s $3.3 trillion economy. This important sector sustains more than one million jobs, a figure that partly reflects the relatively labour-intensive nature of construction and some of the other industries related to homebuilding. Clearly, Canada’s economy will struggle to rebound from the doldrums of 2025 without a meaningful turnaround in homebuilding.

Jock Finlayson

Senior Fellow, Fraser Institute