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Where stakeholders stand: Federal government housing plan and Budget 2024 support

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On April 12, the federal government announced its new housing plan. The plan will be supported by investments from Budget 2024, announced Tuesday.

“Canada can and will solve the housing crisis, and we’re going to do it by getting every home builder, not-for-profit, mayor, city councillor and premier pulling in the same direction to build the homes Canadians need,” The Honourable Sean Fraser, minister of housing, infrastructure and communities, says.

The housing plan outlines a strategy to obtain 3.87 million new homes by 2031, including at least 2 million net new homes in addition to the Canada Mortgage and Housing Corporation’s forecast of 1.87 million being built by 2031. The federal government will support at least 1.2 million new homes, while it calls on all orders of government to build at least 800,000 more homes by 2031.


The government’s strategy


The Canadian government says it will achieve this in a few ways:

1. Building more by lowering the costs of homebuilding, helping cities make it easier to build faster, changing the way Canadian homebuilders manufacture homes and growing the workforce. This will include:

  • A Public Lands for Homes Plan
  • $15 billion in additional loans for the Apartment Construction Loan Program
  • Launching Canada Builds, an approach to affordable homes for the middle class
  • Supporting Indigenous Peoples living away from their communities in urban, rural and northern areas

2. Ensuring that every homeowner or renter has a home that suits their needs and the stability to retain it. This will include:

  • Launching a Tenant Protection Fund
  • Leveraging rental payment history to improve credit scores
  • Increasing the Home Buyers’ Plan withdrawal limit by $25,000 and extending the grace period to repay by an additional three years
  • Extending mortgage amortizations for first-time buyers of newly built homes

This last point in particular is something the Canadian Home Builders’ Association (CHBA) strongly supports: “CHBA has prioritized a return to 30-year amortization periods for first-time buyers for insured mortgages in its recommendations, as tight mortgage rules have been a major driver in falling homeownership rates. This measure is a game-changer for those who have been struggling with housing affordability and growing inequities in mortgage access,” states CHBA CEO Kevin Lee.

“This measure will avoid price escalation in the existing housing market while going a long way to enable our sector to respond to the government’s goal of getting 5.8 million new homes built over the next decade. It will allow more first-time buyers to enter the market and create the necessary conditions for increased housing starts because, quite simply, if buyers cannot get a mortgage to buy a home, then builders cannot build.”

3. Helping Canadians who can’t afford a home by creating more affordable and rental housing and eliminating chronic homelessness in Canada. This will include providing $1 billion for the Affordable Housing Fund and launching a $1.5 billion Canada Rental Protection Fund.

4. Attracting, training and hiring skilled-trade workers needed to build more homes, including $90 million for the Apprenticeship Service, $10 million for the Skilled Trades Awareness and Readiness program and $50 million for the Foreign Credential Recognition Program.


Measures applauded yet concerns remain


Christopher Alexander, president of Re/Max Canada, sheds light on housing supply and the national housing strategy:

“For several years now, Re/Max Canada has been advocating for a coherent and achievable national housing strategy that addresses lack of supply, to calm red-hot price increases and, more importantly, to improve affordability for a greater diversity of buyers and renters. Collaboration between our federal, provincial and municipal governments is the key to increasing housing supply and improving affordability in this country — through long-term, sustainable solutions.

Specifically, we should be expanding municipal zoning laws to allow for a greater diversity of housing, such as the missing middle, expanding capacity for laneway developments and the like and being more strategic and visionary in how we can use existing lands and real estate to drive our housing supply. For that, it’s going to take all of us.”

Royal LePage says it applauds the proposed measures to increase housing inventory and improve affordability for Canadians, but cautions that concrete action must follow these plans.

“Initiatives aimed at making it easier for young Canadians to enter the market are welcome. However, without a material increase in supply, further upward pressure will be placed on home prices. We need policies centered on demand to be met by equal, if not greater, emphasis on actions to increase housing supply,” Karen Yolevski, COO of Royal LePage Real Estate Services Ltd., expresses.

Royal LePage isn’t the only concerned group — CHBA cautions against potential measures that could increase housing costs, including already-planned building code changes that it says “will certainly raise home prices” and the proposed taxing of vacant land, which “must not increase the cost of land that is planned for development.”

Lee says, “The federal government has indicated with this budget that it intends to prioritize housing supply and affordability, including helping those Canadians who want to own a home fulfill that aspiration. CHBA and our members are eager to help make that happen.”

The Canadian Construction Association (CCA) shares similar sentiments: “Budget 2024 sets a bold objective to help Canadians buy homes but misses the mark on delivering sufficient investment and a plan to ensure a steady flow of funds to address our nation’s infrastructure challenges,” says Mary Van Buren, CCA president.

“While we acknowledge some initiatives, such as funding for creating affordable apartments, training and recruiting more workers and upgrading water and wastewater systems, the conditions attached and lack of strategic vision are concerning.”


Feedback from CREA and OREA


The Canadian Real Estate Association (CREA) applauds the first, it says, of a “systems” approach to housing and home building. “Canada’s housing challenges have been building over many years and no one group can tackle it on their own,” says Janice Myers, CREA CEO. “Realtors across Canada have been advocating for a collaborative, multi-faceted approach for years. We’re ready to play our part.”

Likewise, the Ontario Real Estate Association (OREA) commends Prime Minister Trudeau and Minister Fraser for the plan’s measures aimed at ensuring critical land, infrastructure and zoning reforms occur to get more homes built.

However, the association points out a gap: “While OREA was pleased to see the re-introduction of 30-year mortgage amortizations for first-time homebuyers on new builds, we strongly believe this measure must be expanded for all homebuyers and types of homes.

As families look for a great place to lay down their roots, their budget shouldn’t be contingent on whether they’re purchasing a newly built or pre-owned home. In the middle of a housing affordability crisis, many Ontario families, not just first-time homebuyers, would benefit from the relief of 30-year amortizations on their mortgages,” says Tim Hudak, CEO of OREA.


TRREB’s take


The Toronto Regional Real Estate Board (TRREB) takes a similar position: “TRREB is pleased to see that Canada’s Housing Plan commits to helping future home buyers achieve their dreams through extending mortgage amortizations for first-time home buyers and increasing the home buyers’ plan withdrawal limit.

We also welcome the Plan’s strong commitment to provide funding to build affordable rental units that meet everyone’s needs … Finally, (the) Plan offers important support to existing homeowners with renovations and improving home energy efficiency,” says Jennifer Pearce, TRREB president.

While the board acknowledges that improving home energy efficiency is essential to helping families lower their energy bills, it encourages the federal government to focus on voluntary, incentive-based programs “instead of mandatory measures that will add red tape and costs to the buying or selling process.”


Where municipalities stand


The Federation of Canadian Municipalities (FCM) president, Scott Pearce, says the Plan is a “promising step forward in tackling the housing and homelessness crises that affect too many Canadians.”

FCM feels existing infrastructure must be renewed, and new infrastructure built, to meet the 5.8 million housing unit goal. It calls on the federal government to bring together all orders of government to discuss a new Municipal Growth Framework to provide more effective long-term community support.

“Municipalities will work with all orders of government to deliver housing. We welcome new initiatives from the federal government and the provinces. But we only collect about 10 cents of every tax dollar and investments in infrastructure, most of which are borne by municipalities, which are critical to the efforts of building housing”, says Mike Savage, mayor of Halifax and chair of the Big City Mayors’ Caucus.


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