The proposed 2024 federal budget includes a new housing plan, with several programs that impact local governments. Initiatives include supports for renters, homeowners, developers, and other orders of government. Details are yet to come, but the plan does address some of the core components in UBCM’s Housing Strategy.
An Overview of “Solving the Housing Crisis: Canada’s Housing Plan”
The plan’s wide-ranging initiatives are divided into three categories: building more homes, making it easier to rent or own a home, and helping Canadians who can’t afford a home.
Building More Homes
Initiatives in this category are focused on reducing costs of homebuilding, and address both local governments and homebuilders. Most notable for local governments are the $6 billion Canada Housing Infrastructure Fund, additional conditions for accessing a public transit funding, and a $400 million top up to the housing accelerator fund which were detailed in an earlier article when first announced. The Federal Government is also promising to offer more resources for low-cost financing to municipalities through a previously announced Canada Infrastructure Bank “Infrastructure for Housing” initiative.
Homebuilder-focused initiatives address economic viability, industrial innovation and technology, and workforce issues. A new Canada Builds Program will make the now $55 billion Apartment Construction Loan Program available to provinces and territories that launch their own housing plans such as BC Builds.
Other initiatives designed to help increase housing supply are: low-cost financing and targeted changes to mortgage insurance rules to incentivize homeowners to add additional suites; a ‘historic’ public lands program to make more land available for housing, including via a new mapping tool; and a multi-stakeholder engagement to develop a “Canadian industrial strategy for homebuilding”. As part of the proposed public lands program, Budget 2024 includes $500 million to launch a Public Lands Acquisition Fund to purchase land from other orders of government for housing.
Making it Easier to Rent or Own a Home
The second category of initiatives includes a variety of incentives and supports for current renters and homeowners.
- A Canadian Renters’ Bill of Rights, to be developed and implemented in partnership with provinces and territories. Among other things, it would require landlords to disclose a clear history of apartment pricing so renters can bargain fairly.
- Changes to help first time homebuyers including increasing the amount that they can withdraw from RRSPs to purchase a first home, and allowing 30-year amortization periods on insured mortgages for newly built homes.
- An exploration of new restrictions to the purchase and acquisition of existing single- family homes by very large, corporate investors.
Helping Canadians who Can’t Afford a Home
The final category is aimed at increasing affordable housing supply and addressing homelessness.
- A $1.5 billion Canada Rental Protection Fund, partly modelled on BC’s Rental Protection Fund, which contributes funding for non-profits to buy affordable market rental buildings when they go up for sale, thereby ‘protecting’ against redevelopment or renoviction. A new Rapid Housing Stream of the Affordable Housing Fund “to build deeply affordable housing, supportive housing, and shelters for our most vulnerable”. This fund prioritizes partnerships between governments, non-profits, the private sector, and other partners, and is open to local governments.
- An additional $1 billion over four years for the Reaching Home initiative that provides funding to communities to help address local homelessness needs.
- $250 million to be cost matched by provinces and territories to address encampments. According to the federal plan, “The Fund will support human rights-based community action plans that commit to a housing-first approach to ending encampments, and include supportive and transitional housing, housing-focused services, and rent supplements specifically dedicated to individuals living in encampments or experiencing homelessness.”
A UBCM Analysis
The federal government has said their Budget 2024 housing plans will result in 3.87 million net new homes by 2031, consisting of “a minimum of 2 million net new homes, on top of 1.87 million homes already expected to be built by 2031”. Of the 2 million net new homes, the federal government estimates its actions will result in 1.2 million new homes, and are calling on other orders of government and sectors to build the remaining 800,000.
While many details on plan elements are still to come, the new federal housing plan is significant in its scope and the scale of investment. The plan broadly addresses the core components of UBCM’s Housing Strategy, with a strong focus on rental housing and homelessness, and shows a recognition of the important federal role in the funding and delivery of housing. While it does not have a major emphasis on management of speculative demand, a small number of elements address this, including a recommitment to funds to support local government enforcement of restrictions on short-term rentals, an extended ban on purchase of residential property by foreign investors through to January 1, 2027, and an exploration of new restrictions to the purchase and acquisition of existing single-family homes by very large, corporate investors. Budget 2024 notably also announced the federal government’s intention to launch consultations later this year to explore a new tax on residentially zoned vacant land.
A primary concern is the condition for a three-year freeze on increasing development charges in order to access $5 billion in infrastructure funding for provinces and territories (that would apply to communities larger than 300,000 people). The plan similarly refers to a variety of commitments that could be made by provinces, territories, and local governments, including “limiting increases to development charges and restricting their usage to growth related costs,” and the waiving of planning application fees and development charges for affordable housing projects.
While referencing rural areas throughout, the plan also lacks detail on how funding might be allocated across communities of different sizes, reflecting their unique community contexts and needs. Several initiatives also point towards the need for further consultation and coordination with local governments such as the proposed public lands program that would affect federal, provincial, and municipal public lands.
Finally, other initiatives, while not directly focused on local governments, may have significant implications for BC communities by creating new opportunities and incentives supporting densification. These include potential outcomes from National Research Council consultations to address regulatory barriers and explore point access blocks and single egress designs, and low-cost financing and targeted changes to mortgage insurance rules to incentivize homeowners to add additional suites. Such measures have the potential to increase the pace of uptake of densification initiatives resulting from recent provincial legislative changes in BC.
UBCM will continue to monitor and analyze initiatives announced under the federal housing plan as they are developed.