Canada’s Housing Crisis Shifts: SCHL Pushes Affordable Designs Over Luxury July 11

Canada’s housing crisis is pushing the Société canadienne d’hypothèques et de logement (SCHL) to rethink construction entirely. The agency’s chief economist says builders must choose cheaper finishes and practical designs instead of luxury upgrades. With rental vacancy rates stuck between 1% and 3%, the federal government is funding local initiatives across the country to accelerate affordable housing supply.

Why luxury finishes are the problem

Mathieu Laberge, chief economist at SCHL, says the housing shortage demands a shift in building standards. Granite and quartz countertops add cost without solving the affordability crisis. Builders should choose melamine finishes instead, which perform equally well at lower cost. The focus must move to practical layouts suited for families, not premium materials that inflate prices beyond reach.

Rental market shows signs of stress

Tenants are staying in rentals far longer than before, a shift that reveals deeper market strain. Average rental tenure jumped 33% from 28.3 months in 2019 to 37.6 months in 2025, according to Maslow.immo data. This suggests fewer people can afford to buy homes, forcing them to rent longer. While landlords benefit from stable tenants, the trend underscores how affordability barriers are pushing renters out of the market entirely.

Federal programs accelerate standardized housing

Ottawa is backing the shift with concrete funding. Thunder Bay became a new partner in the Housing Design Catalogue on July 10, gaining access to over 50 pre-approved low-rise plans at no cost. Castlegar, British Columbia received $158,215 to develop standardized designs for accessory dwelling units, duplexes, townhomes, and fourplexes. These designs reduce custom engineering costs and shorten approval timelines, making it faster and cheaper to build.

Ground-level projects show momentum

A 54-unit affordable housing project broke ground in Saint-Donat, Quebec on July 10, with first tenants expected in summer 2027. The $20 million development includes three adapted units for people with reduced mobility and rent supplements for up to 18 eligible households. This project is part of the Desjardins Affordable Housing Initiative, which aims to create over 3,000 affordable units through a partnership with Quebec.

Final Thoughts

Canada’s housing crisis is forcing a reset: simpler designs, cheaper finishes, and standardized plans are replacing luxury construction. The trend reflects a hard reality that affordability, not amenities, is now the market’s core challenge.

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