Rogers: Restoring Housing Affordability in Canada Will Take Time

Carolyn Rogers, senior deputy governor at the Bank of Canada, said that addressing housing affordability is a complex issue and will take time. According to her, restoring affordability requires more supply, better planning and infrastructure, regulations that protect resilience, and incentives that do not add demand to a market already short on supply.

Rogers stated that high house prices push up rents and limit people's ability to buy, but also shrink overall household wealth when prices fall. 'It feels a bit like a trap,' she said. The affordability goal needs a mix of policy measures, including increasing supply, protecting resilience, and reducing the economy's dependence on rising house prices.

Rogers emphasized that monetary policy can influence demand across the economy but is too blunt a tool to deal with affordability issues. She also noted that there are no simple fixes to the monetary policy framework that can help address housing affordability. The Bank of Canada needs to explain these trade-offs better and be clear with Canadians about what monetary policy can and cannot do.