Is part of the solution to Canada’s housing crisis to allow foreign investors to buy more of our homes, leave them vacant as a store of value, and convert more housing into short-term rentals?
According to economist Mike Moffatt and his team at the Missing Middle Initiative, the answer appears to be Yes.
Their recent Provincial HOMES Report Card includes many sensible, supply-side recommendations. But their treatment of foreign buyers, vacant homes, and short-term rentals is deeply problematic.
In their framework, these policies are not just seen as ineffective. They are framed as actively harmful, barriers that should be removed in order to improve housing outcomes.
That framing reveals a lot about their vision for housing.
Taken at face value, the argument seems to be this: Canada’s housing problem is not only that we have not built enough homes. It is that we have been too restrictive toward investors and foreign capital. Vacant home taxes discourage investment. Foreign buyer taxes limit capital flows. Short-term rental rules interfere with supply. Remove those frictions, and supply will follow.
But I keep coming back to a more fundamental question.
If solving our housing crisis requires allowing more foreign investors to buy Canadian homes, and to face fewer consequences for keeping them vacant or converting them into short-term rentals, what exactly is the end goal?
Because it is not affordability for Canadian households.
And it is not homeownership for the next generation.
Are restrictions on foreign buyers, vacant home taxes, or short-term rentals going to solve the housing crisis on their own? Of course not. But no one serious believes any single policy will.
Legalizing multiplexes or single-stair buildings will not solve the crisis either. That does not make those policies irrelevant. It means housing is complex, and policies should be judged by whether they move us toward a better system.
What is missing from this framework is a serious discussion about ownership.
While the Missing Middle Initiative often argues that the next generation should be able to afford a home, their vision also implies that Canadian households should compete against global hedge funds to buy that home.
And we all know how that ends.
A household saving from after-tax income and qualifying for a mortgage based on wages will never compete with institutions that have virtually unlimited capital.
Homes are not widgets on an assembly line. And affordability is not just about building more units at any cost.
Who owns Canada’s homes matters. Ownership shapes security, stability, and long-term wellbeing. As housing is increasingly treated as a global financial asset, the role it plays in Canadian society will change fundamentally.
That is the future we should be debating openly and honestly.
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).
Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn
December 15, 2025
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