Municipalities’ objection to housing development has contributed to Canada’s current housing crisis, says Scotiabank Canada’s chief economist Jean-François Perrault.

The federal government regulates people coming into the country, but municipalities — and, to a lesser extent, the provinces — hold a lot of power over where people end up living, Perrault told the House of Commons Finance committee on Monday.

“In my opinion, the source of the issue is this nimbyism, whether you like it or not,” he said.

“It’s an important factor that limits housing development. We find ourselves with less housing, and we all pay more, whether it’s renters or homeowners.”

NIMBY is an acronym for Not In My Back Yard, so nimbyism usually refers to the phenomenon of residents objecting to things like social housing, homeless shelters, and safe-injection sites going up in their neighbourhood.

Offering municipalities more money or other incentives could help, Perrault said, adding that nimbyism is a political problem, not an economic one.

“If there are financial constraints or considerations that are delaying (housing developments) or making it more difficult for municipalities or provinces, that can be addressed,” he said. “But at the heart of it (are) political challenges, and how municipalities want to deal with (them). The fact that populations are rising … is forcing some pretty difficult choices (onto) local politicians.”

The Finance committee is currently studying Canada’s inflation rate, which hit a 30-year high of 4.8 per cent in December. Affordable housing has been a hot topic at the committee after house prices jumped by a record 26.6 per cent in December from the year before, according to the Canadian Real Estate Association.

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