The P.E.I. government says home building is 'really starting to ramp up.' But is it?

Speaking to reporters about P.E.I.'s capital budget on Tuesday, Finance Minister Jill Burridge defended her government's reliance on business people to build more housing.

"We have to lean on private industry," Burridge said, in response to a question in the budget lock-up about where the other thousands of required rental units will come from.

"The first part of the year they were slowing down, but they're really starting to ramp up now."

Is that a fact?

Burridge was referring to what is probably the most-used statistic when it comes to residential construction, housing starts. That's just what it sounds like: a measure of how many construction projects were started in a given month or year, measured both by value and by the number of housing units.

By the units measure, which is what really matters to someone looking for a place to live, it is certainly true that 2023 started slowly. 

The 444 units started in the first two quarters of the year represented the lowest level since 2018, topping that year by only three units.

And it is also true that 2023's third quarter was far better. There were almost as many starts as there were in the first half of the year, coming in at 442 in just three months, and it was the hottest quarter for starts since 2019.

There is further silver lining to this good news. Almost half those starts were not single-family homes but apartment units, which is good when P.E.I. needs to build a lot of housing on very little land.

Ramping up enough?

But at its heart, the question the minister was asked to answer was this: Is the private sector building enough housing to keep up with Prince Edward Island's population growth? 

The answer is no.

Totalling the first three quarters, we find that housing starts in 2023 are still the lowest since 2018.

The province is currently short thousands of housing units, and the provincial Finance Department estimates that just in order to keep pace with population growth, more than 2,000 new homes a year are needed.

In that recent peak year of 2019, there were 1,504 housing starts. Only once has P.E.I. had more than 2,000 starts, in 1973, and 2019 stands as the second busiest year for housing starts.

The current need is for 1973 to happen every year until population growth slows.