New housing initiatives should help but implementation is key
After carefully reviewing the federal government’s budget, it is clear that many of the housing supportive measures included will be beneficial to adding critical housing supply in municipalities across Canada and in the Greater Toronto Area. How beneficial will come down to alignment in implementation and speed at the municipal level.
The federal government’s housing plan and budget measures have a number of positive initiatives and measures for adding housing supply.
First, is the focus on housing supportive infrastructure, especially as this compliments the Ontario government’s infrastructure funding announcement from late March.
Second, the return of the 30-year amortization limit for insured mortgages for first-time buyers purchasing new builds is great news. It will make it easier for younger generations to purchase and afford the monthly mortgage amount, particularly if interest rates hopefully begin to soften before this takes effect on August 1, 2024.
Third, the increased focus on “skilled trades” through immigration policy, encouraging more people to pursue a career in trades and breaking down the barriers to foreign credential recognition for construction workers is very much needed.
While positive, the federal actions did miss opportunities in several key areas. For example, the feds did not extend the HST exemption for new purpose built rental units that were under construction prior to September 2023. Given the degree of present risk in new residential home construction, this means that many new units could be converted to condominiums for sale rather than rental.
The degree to which these new federal initiatives will be successful, however, depends greatly on their alignment with provincial and municipal efforts already under way.
Ultimately, speed of implementation at the municipal level — putting in the required infrastructure, faster planning, more timely approvals — is what will help us turn the corner on the national housing crisis.