Housing minister says building homes is vital 'regardless' of interest rates
, BNN Bloomberg
As the Canadian housing market braces for possible interest rate cuts this year, Housing Minister Sean Fraser says the mission remains the same, to build as many homes as possible, as fast as possible.
In a press conference Tuesday with Minister of Finance Chrystia Freeland, Fraser spoke about the impact interest rates have on restricting housing supply. He explained that based on conversations he has had with developers, a cut in interest rates would spur developers to “start those projects that are marginal today.”
“Regardless of whether interest rates remain where they are, or come down a whole point or half a point or whatever may happen, the course of action remains the same because we know we need to build millions of homes,” Fraser said.
He added that the interest rate environment “doesn’t change the mission.”
There is a need to simplify the building process at the municipal level, Fraser said, as well as ensuring efficient spending on infrastructure investments and reducing red tape.
“We need to make the math work for builders by getting rid of the GST, recapitalizing (the) Canada Mortgage Bond program (and) putting low-cost financing through the Apartment Construction Loan program into the system,” he explained.
Fraser also mentioned the critical need to invest in affordable housing.
“We need to do everything we can as quick as we can to build as many homes as we can, and that’s going to be true today and six months from now regardless of what we have in the interest rate environment that we’re dealing with,” he said.
Freedland said in the press conference that “supply is at the heart of the challenge,” and that a major objective is increasing the speed of construction.
Fraser announces $176 million in housing deals with more than 60 rural communities
, BNN Bloomberg
The federal government will roll out more than 60 housing agreements with small and rural communities across the country over the next few weeks, Housing Minister Sean Fraser announced Tuesday.
Fraser said in a news conference that the deals are worth $176 million and will help build more than 50,000 housing units over the next decade.
"What we've seen over the course of the past few years is more people have chosen to move to small towns," Fraser said.
"We're seeing the cost of rent has gone up dramatically as vacancy rates get lower. We see that the cost of purchasing a home is far greater today than it was even just a few years ago."
Fraser said rural communities are being given more flexibility when it comes to their commitments in the agreements, in part because they have different capacities than larger municipalities.
Ottawa has been signing agreements directly with municipalities through its housing accelerator fund, which offers money in exchange for changes to bylaws and regulations that would support more homebuilding.
Municipalities were invited to apply for the federal fund with a plan on how they intend to ramp up construction in their communities.
The Liberal government has pitched the fund as a key pillar of its economic plan as it faces political pressure to address the country's housing crisis.
Fraser said on top of the deals for smaller communities, the federal government has reached 36 agreements to date that will help construct more than 500,000 housing units over the next decade.
That includes a deal with the city of Ottawa worth $176 million announced on Monday.
Out of the $4-billion housing accelerator fund, about $640 million remains available to municipalities that have not yet signed agreements, said a spokesman for Fraser.
This report by The Canadian Press was first published Feb. 13, 2024.
British Columbia hatches $2-billion loan plan to boost homebuilding
, Bloomberg News
British Columbia’s government launched a program to accelerate the construction of thousands of affordable homes, backed with a $2 billion lending commitment and $950 million in spending.
B.C. Premier David Eby said the new body will identify owners of low-cost land, bring them together with contractors and developers, then work with local governments to expedite planning approval.
The provincial government will then offer low-interest financing for new residential developments and grants to nonprofits and First Nations development corporations. The goal is to have at least a fifth of homes under the program made available for rent at rates at least 20 per cent below market, without ongoing government subsidies.
The initiative underscores the acute housing shortage in British Columbia — a problem shared across Canada and other major North American and European cities — and the growing political urgency to do something about it. British Columbia, Canada’s third most-populous province with about 5.6 million people, is expected to hold an election in October, while a national election is expected in 2025. Conservative Leader Pierre Poilievre, who’s Prime Minister Justin Trudeau’s main opponent, has built a sizable lead in polls in part due to public frustration over housing costs.
The private sector has failed to build enough affordable housing, a problem not helped by inflation, interest rates and land costs, the BC government said in a statement.
At a speech in Vancouver, Eby announced an initial project for the plan, known as BC Builds, made up of 400 housing units, with “thousands more units to come.” All units will be income-tested and aim for rents equal to no more than 30 per cent of the earnings of a middle-income household, with overall rents equal to or lower than market rents.
BC Builds has set a goal of cutting the time between concept and construction to 12 to 18 months, down from a typical three to five years.
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