Contributed by Robert Lyman ©2019. Robert Lyman is a former public servant and diplomat. His full bio is here.
Forget the Dream House
According to a recent Abacus poll, the affordability of housing is the largest concern among young adults in Canada. Every quarter, RBC Economic Research publishes its survey of housing trends and affordability. In the report published in March 2019, RBC assessed the percentage of income needed by the average family to cover the costs of owning a home as 52%. So, on average, Canadians pay more than half their income on housing ownership costs.
LINK TO FULL REPORT: Forget the Dream House FINAL
Federal and provincial government policies under the Pan-Canadian Framework on Clean Growth and Climate Change (PCF) will make matters considerably worse over the next decade. One PCF commitment is that federal, provincial and territorial governments will “work to develop and adopt increasingly stringent model building codes, starting in 2020, with the goal that provinces and territories adopt a ‘net-zero energy ready” model building code by 2030.”
The incremental costs of these changes will be high. Building an Energy Star home will cost an extra $8,000 to $10,000, an R2000 home costs $30,000-$40,000 and a net zero home $100,000-$150,000. Canadians build roughly 200,000 homes per year. In 2012, around 1400 of those homes were energy star certified. Less than 50 were R2000 certified and about 15 were considered net-zero. Assuming that the cost of household energy use is between $2,000 and $4,000 per year, an Energy Star home would take 10 to 20 years to payback. R2000 would take 15 to 30 years to payback, and net zero 25 to 50 years to payback. Further, most homeowners only plan to live in a house for around five years, and so they will not get to experience the energy savings benefits.
Using the low end of the estimated additional cost of a net-zero house of $100,000 per unit and the estimate of 200,000 average new home sales per year, moving to mandate the use of net-zero homes in Canada by 2030 would impose an additional $20 billion per year cost on the Canadian economy.