(Bloomberg) – Prime Minister Justin TrudeauThe government of Canada will provide low-cost leases on public land to developers and ramp up factory construction of homes as part of what it calls a “historic” plan to ease Canada’s housing crisis.
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Companies that agree to build affordable homes will have access to “surplus, unused and undeveloped land” owned by the public, the government said, but gave few specific details. The Prime Minister’s housing strategy, published on Friday, also includes low-interest loans for homeowners who want to add basement apartments or single-family homes to their properties.
The strategy should allow the country to build about 3.9 million homes by 2031, Trudeau said at a news conference. That would exceed the 3.5 million the Smart Prosperity Institute estimates will be needed — if provinces and local governments join the initiative with “serious ambition,” Housing Minister Sean Fraser said in an interview.
There have been two other points in Canada’s history when the country has faced a housing shortage on the scale of the current scale, Fraser said. One thing happened after World War II, when soldiers returned and displaced people flooded the country; The second generation was a generation later as the baby boomers came of age and needed to accommodate their growing families.
In both cases, the country has taken measures to increase its housing stock. But after decades of underinvestment combined with a growing population, Fraser says Canada may be facing its biggest housing challenge yet.
The federal government is the country’s largest landowner, but Fraser said it is choosing to lease land rather than sell it to keep it public and have more control over what gets built. The government says it will work with housebuilders and housing providers to build “in every possible location across the public portfolio”.
“This is the most ambitious housing plan in Canadian history,” Fraser said.
However, many parts of the housing strategy require the support of provinces and cities – including the use of land they own. Some premiers, including Francois Legault of Quebec, have already resisted interference with their jurisdiction.
A statement from Conservative Leader Pierre Poilievre’s office noted Canada’s housing record under Trudeau, including that it now takes 25 years to save for a down payment in Toronto, according to National Bank. Poilievre has promised to incentivize cities to build more housing and punish those who don’t.
The government’s plan also includes a “housing industrial strategy” focused on prefabricated homes, including 3D printed homes. This element of the strategy includes a previously announced design catalog to accelerate construction and the provision of C$500 million (US$363 million) in low-cost loans for innovative housing projects.
Here are some of the other new measures in the housing plan:
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Temporarily increasing the capital cost subsidy tax rate from 4% to 10% to increase developers’ returns
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Creating a new program that gives homeowners access to low-interest loans of up to C$40,000 to add a second home to their homes
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Adding C$50 million to a foreign qualifications recognition program to recognize the expertise of newcomers to homebuilding and supporting training and apprenticeship programs to help Canadians enter the skilled trades
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Advised on a plan to restrict the purchase and acquisition of existing single-family homes by large corporate investors
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Advising the mortgage industry on the Canada Revenue Agency’s deployment of a borrower income verification tool for mortgages to combat fraud
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Investing an additional C$1 billion over four years in a program called Reaching Home, which provides resources to communities to combat homelessness
Trudeau has made a series of announcements ahead of the government’s April 16 budget aimed at helping younger Canadians facing high housing costs. Lack of affordability has become a key political issue and is contributing to Trudeau’s decline in popularity among voters under 40.
Previously announced measures in the housing strategy allowing first-time home buyers a 30-year payback period for mortgages on newly built homes, as well as a fund for provinces to help finance infrastructure if they agree to allow denser housing.
– With support from Mathieu Dion and Jay Zhao-Murray.
(Adds a consultation plan on banning private equity purchases of single-family homes.)
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