Home builders

Canada’s homebuilders gaining confidence, say industry success requires cooperation from municipalities

Homebuilders in Canada have their work cut out to increase housing supply and ease the affordability crisis, and industry participants also point to cooperation at the municipal level as key to the solution.

Homebuilder confidence rises despite supply chain and labor challenges, according to the first quarter release of the Canadian Home Builders’ Association (CHBA) Housing Market Index April 27.

While 80% of builders expect to see as many housing starts as 2021 – a positive sign for tackling housing shortages – the rest point to permit and approval delays as a barrier (68% ) as well as the lack of land availability (61%), according to the ACCH.

“Both underscore the important role municipalities play in increasing the housing stock to address supply and demand imbalances,” CHBA CEO Kevin Lee said in the release. hurry.

ACCH welcomed the federal budget allocation of $4 billion over the next five years the Housing Acceleration Fund (HAF), which aims to support municipalities in the construction of new housing, with a target of 100,000 new housing units over this period.

“As the Fund rolls out, it will be critical that municipalities partner with this initiative, as well as related provincial actions,” said the CHBA in an April 7 press release following the presentation of the federal budget.

“Municipalities hold the key to unlocking more supply, and with this federal support and incentive, ACCH hopes more municipalities will act aggressively to help solve the housing supply shortage and ease the crisis. housing affordability.

Mortgage Professionals Canada (MPC) said it has held ongoing meetings over the past three years with parliamentarians to get them to change the policy direction from trying to curb housing demand to increasing housing supply . But challenges at the municipal level are also on MPC’s radar.

“We anticipate challenges in their successful implementation [government’s housing goals]and expect that to be successful, provinces must also help encourage municipalities and allay fears of tactically savvy small groups of NIMBY [not in my back yard] residents,” said the President and CEO of MPC Paul Taylorr in an April 8 commentary on the 2022 budget.

While discussing his new HAF in Budget 2022, the government has said that changes are needed in the systems that prevent the construction of new housing. Tackling housing affordability requires all three levels of government, so municipalities will have an incentive to build more housing.

Federation of Canadian Municipalities FCM President Joanne Vanderheyden also welcomed the HAF’s announcement and said in a post-budget statement that it should be designed with municipalities to “directly enable rapid action and results.” The FCM did not respond to a request for an elaboration from The Epoch Times.

The feds recognized in Budget 2022 that Canada has fewer homes per person than many countries in the Organization for Economic Co-operation and Development (OECD). Canada is building around 200,000 new homes a year and the government says this needs to double over the next decade to meet affordability challenges and meet the housing demands of a growing population.

Canada Mortgage and Housing Corporation (CMHC), which will administer the HAF, said in its 2022 report housing supply report released on May 3 that housing starts have struggled to keep up with population growth in some major urban centres, particularly Toronto.

Apartments dominate construction in major urban centers across Canada, such as Montreal, Toronto and Vancouver, the national housing agency said, noting that “various constraints (land, regulations, etc.) may be greater” in these cities. In larger centers Calgary, Edmonton and Ottawa, starts of single, semi-detached and row homes remain strong, he added.

“We are already seeing a record number of units under construction, and the sector is facing labor and capacity constraints. It will take a massive effort at all levels of government to achieve this and would likely increase inflationary pressures,” BMO’s senior economist said. Robert Kavic on the Budget 2022 housing initiative in a Remark to customers on April 7.

Inflation is already at its highest level in more than 30 years 6.7%.

Despite the CHBA’s optimistic outlook, it reported in its April 27 news release that price increases in building materials added almost $80,000 on average nationally to the price of a home. ‘about 2,500 square feet since the pandemic began, with half the cost in wood alone. The CHBA also said supply chain issues continued to cause construction completion delays of an average of 10 weeks.

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Rahul Vaidyanath is a reporter for The Epoch Times in Ottawa. His areas of expertise include economics, financial markets, China, national defense and security. He has worked for the Bank of Canada, Canada Mortgage and Housing Corporation and investment banks in Toronto, New York and Los Angeles.