New Federal Agency Offers Hope For Our Industry

On September 14^th, the Canadian Government launched the Build Canada Homes Agency to work toward building affordable housing at scale and at speed (https://housing-infrastructure.canada.ca/bch-mc/index-eng.html). The Agency will partner with provinces, territories, municipalities and Indigenous communities, and will oversee steps to streamline the housing process. We need creative thinking and cooperation to solve the housing crisis in Canada, and this represents that sentiment at a high level.

Toronto is one of the six sites prioritized to receive 4,000 factory-built homes on federal lands. Some of the $13 billion dedicated to this will go toward reducing upfront costs for builders. Many municipalities have already reduced and even eliminated development charges. Although we need infrastructure to accommodate new housing, these charges, which get passed on to the new home purchasers, often go to items not related to housing.

Pre-construction high-rise condominiums are especially hurting right now. High-rises require more time for zoning approvals, and 70 to 85% of those units must be sold before the builder/developer can get financing. This bottleneck hurts the rental market too, as for the past 25 years, condos have been the only supplier of rental stock. Only now are we seeing purpose-built rentals in the works.

I extend a word of caution when it comes to Build Canada Homes. Overseeing is fine, but we have a ready and able roster of builders and developers who are capable and willing to work hard. Pre-construction housing is an industry that can turn on a dime when the environment is right. What would help our industry immediately is the federal government expanding those eligible for the GST elimination and reduction to all new home buyers. If there has ever been a time when a tax break is needed to spur sales of all new homes and condos, it is now.

Housing in Canada is critical to Canada’s economic, psychological, social and emotional well-being. We need fresh, new, innovative ideas to bring about change and instill confidence once again. Much of the description of the new Agency is of a high level, so as the future unfolds, I look forward to learning more.