Paired comparisons of liberal-welfare regimes are underrepresented in housing policy literature. This paper adopts historical institutionalist theory in comparing two such cases: Canada and Australia. Despite these countries' many similarities, social housing policy differences have been shaped by institutional differences in federal systems, welfare states and social housing itself. Australia's earlier welfare state supported much larger postwar production, but Canada caught up once it departed from the residual US model in the 1960s. Although the 1970s economic shocks challenged Australia's welfare state more than Canada's, the latter's centrifugal federalism became a bigger threat to social housing. In 1985-1995 Australia expanded its social programmes, including demand-side assistance, while Canada devolved and retrenched social programmes, including social housing. Although supply-side social housing is an orphaned legacy in each case, Australia has higher assistance to low-income tenants, more active policy discourse and stronger recent signs of post-neoliberal re-engagement than Canada. These two cases illustrate the importance of institutional differences, including "institutional design", in creating different forces of change at key junctures, leading to divergences in policy paths. These findings suggest value in reinterpreting the existing secondary literature from the perspectives of welfare regime theory and historical institutionalism.

Key Messages The emergence of the basement suite sector reflected the historical evolution of housing demand, supply, and home technology. Basement suites emerged as a distinct sector in the 1970s in a context of high rental demand, declining apartment production, and shortfalls in other low‐rent supply. Basement suites were facilitated by post‐war innovations in housing spaces, equipment, and materials, such as natural gas heating, drywall, cheap appliances, and recreation rooms.

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