Housing has become a major bottleneck to economic growth - federal government failing to lead

Today, those same projects can only borrow at four to five per cent interest from CMHC, which means they can’t afford to borrow as much, and CMHC grants now only cover five per cent of costs. Plus, construction costs have risen by as much as 50 per cent.

We’re in a crisis, with homelessness, housing-induced poverty and serious economic and human impact. We need federal leadership and rather than relying on out-of-date plans, programs and commitments from five years ago, Fraser needs to see that far from being adequate to fix the problem, the federal tool box needs to be updated and replenished.

• Federal funding drops off a cliff in five years. Current federal budget commitments for housing and the National Housing Strategy end in 2028. Some of it even sooner. New housing takes four to five years from conception to completion. We have no commitments there will be federal support for affordable housing projects five years from now. It’s not just about spending faster, it’s about predictability and matching federal timelines to the development cycle.

• It’s not just about supply; it’s about the right supply. We need more homes, to keep up and to catch up with population growth. According to CMHC, we need to build 5.8 million new homes by 2030 to restore balance and affordability. But there are flaws in this simplistic supply-and-demand argument. If we double the pace of residential construction to meet that target, we add pressure to strained labour, trades and materials markets.

Following the same supply-and-demand logic tells us that doubling the pace of residential construction will drive up construction costs and the price of new homes. Clearly, increasing supply alone will not address the affordability crisis.

More than 20 per cent of households cannot afford market-rate housing. The community housing sector represents only four per cent of the total housing supply, and struggles to meet demands that are more than five times greater than the entire existing non-profit and co-op housing stock. We need to at least double the supply of community housing to come closer to meeting the housing needs of modest income households.

• We’re fighting a headwind now, so focus our energy. Recently, encouraged by low interest rates, low inflation, stable costs and a whole generation priced out of home ownership, private industry returned to rental construction. There was a tailwind and momentum that made it easy to believe that the only necessary government response was to remove barriers and unleash the capacity of the market and private industry.

The winds have changed now. With higher interest rates and high inflation, private industry is putting projects on the shelf and ramping down production. At a time when we need it most, the momentum has dropped, and federal intervention is needed to jump-start greater housing production.

Housing is a shared responsibility between all orders of government, but we need national leadership. We need a “Team Canada” industrial approach and the feds are wearing the jersey with the big “C” for captain.

The team captains can’t say “we’ve done our share,” or “leadership isn’t primarily our responsibility” — that isn’t good enough. We can no longer rely on strategies, programs and plans designed under completely different economic circumstances. The game has changed, and we need to adapt and step up to the growing challenge.

Ray Sullivan is executive director of the Canadian Housing and Renewal Association, which represents non-profit and co-operative community housing.