A bit over a year ago, Prime Minister Mark Carney made an announcement in Ottawa about the introduction of Build Canada Homes, a federal initiative aimed at addressing the housing crisis and expediting residential construction. The agency is committed to increasing the production of affordable housing, responding to concerns within the industry about the slow pace of housing development nationwide.
Build Canada Homes has pledged to support the construction of approximately 19,000 affordable units across the country, with only around 2,000 units currently under construction. Dave Wilkes, the president and CEO of the Building Industry and Land Development Association in Toronto, expressed the sentiment that progress could be accelerated, emphasizing the industry’s need for swift action.
Transitioning into a Crown corporation in July, after the enactment of the Build Canada Homes Act, the agency has been engaged in overcoming administrative obstacles, finalizing land transfers, and establishing intergovernmental agreements. According to Build Canada Homes spokesperson Joshua Coke, this marks just the initial phase of the effort to address the significant housing demand surpassing the current supply of affordable homes.
The focus of the housing agency lies on constructing non-market housing, where rents are income-based rather than market-driven, while also collaborating with developers to create affordable housing for the middle class. Recognizing the need for a more rapid and extensive approach to combat the affordability challenges, Build Canada Homes aims to facilitate the acceleration of residential projects through partnerships with builders, developers, and community entities.
Kevin Fettig of CMI Financial highlighted a prolonged absence of federal funding and construction of affordable housing by the Canadian government over approximately three decades. The shift in fiscal priorities led to reduced spending on housing initiatives, cessation of federal co-operative housing programs, and the discontinuation of new affordable housing construction efforts.
Acknowledging the historical neglect in addressing housing affordability, Federal Housing Minister Gregor Robertson expressed a commitment to changing the status quo. The objective is to bridge the supply gap in the housing market and enhance affordability for Canadians across various income brackets.
Canada Mortgage and Housing Corporation (CMHC) reported that annual housing starts have plateaued around 250,000 over the past two years. To restore affordability levels from 2019, CMHC’s chief economist Mathieu Laberge emphasized the necessity for the construction of approximately 417,000 to 469,000 units annually by 2036.
Laberge underscored the urgency of addressing the supply gap to safeguard future affordability, particularly in response to the pent-up demand from younger generations and newcomers. Wilkes emphasized the positive impact of initiatives like the HST rebate and reduction in development charges in Ontario, which have contributed to balancing overheated housing markets and increasing housing supply.
Recent collaborations between Ottawa and provinces, such as the partnership with Alberta to construct affordable housing units, signify a step towards meeting the growing demand for housing. Build Canada Homes aims to modernize construction practices by promoting innovative methods like modular and prefabricated housing, with a focus on expediting the construction process while ensuring affordability.