One year into Victoria's new housing strategy, new construction is starting to ease the shortage of units that turned it one of Canada's least affordable cities.

Jonathan Tinney, the city's director of planning, told On the Island host Gregor Craigie in recent years the city's population has grown faster than the number of new residential units built.

"At the base of this is general supply," Tinney said. "If we don't have enough supply, then people with more money will bid for the fewer housing units we have."

Victoria's council approved the 2016-2025 housing strategy a year ago, which set out 25 actions to improve affordability in the city with a .5 per cent vacancy rate, one of Canada's lowest.

The 600 new residential units built each year over the last five years were 200 to 300 units short of what was needed to house new residents, Tinney said.

"The good news is we're starting to see that we're seeing the market respond," he said. "We're seeing units being built."

Tinney said municipalities don't have the money or the policy tools available to provincial and federal governments to build low-income housing, so the city focused on stimulating middle-income housing aimed at people who earn between $18,000 and $57,772.

The first annual review of the 2016-2025 Housing Strategy, presented to council last week, concluded that the actions taken so far have increased the rate of new housing construction.

The City of Victoria's 2016-2025 housing strategy made it possible for garden suites to be approved over the counter after discussion with staff at City Hall's permits department. (City of Victoria)

About half of the strategy's 25 proposed actions have been completed. They include waiving application fees for affordable housing developments, simplifying approvals for basement suites and standalone garden suites — similar to Vancouver's laneway houses — and allowing smaller housing units.

Tinney said one effect is there has been an increase in garden suite applications.

Fewer than a dozen were built in the first five years in which they were allowed on a limited basis. Within a month of dropping the rezoning requirement, the city received 23 applications for garden suites.

"The process is significantly quicker, easier, you just have to have some discussions with staff and it can be approved over the counter," Tinney said.

Rental construction returns

There has been little rental apartment construction for the last 10 years, but now 590 rental units are under construction. In addition, nearly half the units currently in planning and approval stages are also proposed for rental or seniors housing.

Tinney said one of the most effective measures in the federal housing strategy announced Wednesday is rental supplements for low-income renters.

"It starts to take people at more moderate incomes, and give them a little extra cash each month to go out and rent a market unit," he said.

"It's a way to use government money and the power of the marketplace to house more people."

With files from CBC Radio One's On the Island.