Prime Minister Justin Trudeau speaks to the media during an affordable housing press conference at a public housing development in Winnipeg, April 4.John Woods/Canadian Press
Tuesday, according to a federal database. media advisory, 11 ministers participated in eight separate housing announcements. On Wednesday, four housing events were held with the participation of eight ministers. On Thursday, 11 ministers spearheaded seven different housing flash mobs.
Prime Minister Justin Trudeau led a court-wide press corps to make housing announcements in Halifax, Toronto and Winnipeg on Tuesday, Wednesday and Thursday. And he promised more ahead of the April 16 budget.
Message: Like Bachman-Turner Overdrive, we’re in business every day.
Sending half of the Cabinet on a barnstorming tour, where they all perform the same song and dance numbers, is old-fashioned political PR. But please tell the government this much. The actual housing-related announcements were genuine. And it’s fulfilling.
The most important is the Apartment Construction Loan Program, which provides an existing $40 billion in loan guarantees for rental housing developers, with an additional $15 billion to be added. and a new $6 billion Canada Housing Infrastructure Fund that will change zoning to allow fourplexes to be built in all residential areas “as appropriate” and allow high-rises to be built near top-tier public transit. Funding will be provided to states and cities that freeze development. Fee.
All this will help you build more housing and build it where you need it in and around the most desirable areas of the metropolis.
This is all good. But it’s swimming in a deep pool of caveats and limitations.
A Canada Mortgage Corporation analysis last year found that 5.8 million housing units would need to be built over 10 years to bring shelter prices down to reasonable levels. CIBC economist Benjamin Tull updated that estimate this year, concluding that the shortfall is 1 million more units. We need to build about 7 million homes in 10 years.
How many is Canada building? According to CMHC, Canada is building 271,000 Housing starts will be 262,000 units in 2021 and 262,000 units in 2022. This is higher than he has been at any time since the 1970s, but it’s still not good enough. You need to build at about three times that rate.
But construction has slowed in the face of high interest rates and rising construction costs. CMHC reports that housing starts in 2023 will be 240,000. expected to be less this year. Construction starts in 2025 and 2026 are also expected to remain below 2023 levels.
Prime Minister Trudeau’s incentives may move the needle a little. But how much of a difference can it make, at least in the short term? The proportion of the workforce working on construction sites is already close to 8%, an all-time high.
Either way, the investment required for 7 million homes will be in the trillions of dollars. Almost everything will have to come from the private sector.
Take advantage of our apartment construction loan program. Ottawa announced it would help build 131,000 homes. This seems like a lot, until you realize that he is less than 2% of the 7 million needed.
And this program is way off target. When it launched seven years ago on a modest budget, its goal was to finance 71,000 new rental homes. According to the latest information, progress reportonly 11,208 were completed.
This week’s housing policy announcement by the Trudeau government is the latest move to liberalize zoning in and around Canada’s largest and most economically vibrant cities. In the long term, this is expected to make it cheaper and easier to build more homes where demand is highest.
But in the short term, it remains to be seen whether the Trudeau government’s recent moves (while positive) will have more than a modest impact.
The amount, type, location, and price of housing in our cities and suburbs may change significantly by, say, 2035. The Trudeau government may one day claim some of the credit. But you can’t make big changes in 2024, 2025, 2026.
The only way to have a short-term impact on the housing market is to pull short-term demand levers.
The housing crisis is a disaster caused, at least in part, by the Trudeau government. This led to an explosion in the number of students and temporary foreign workers obtaining visas, and in 2023 he achieved an unprecedented population growth of 1.3 million people.
The only way to bring housing supply and demand back into a more equal balance, at least in the next few years, is to lower demand. And the only way to do that is for the Trudeau government to reverse its hasty measures against temporary foreign residents. That’s what the government promised. That’s what needs to be done.
