The federal government is planning to launch a nearly $1.5-billion rental protection fund, aimed at providing loans and grants to non-profit organizations to buy rental units in a effort to keep prices affordable.
Prime Minister Justin Trudeau made the announcement in Winnipeg on Thursday morning alongside NDP Premier Wab Kinew.
“Unfortunately, too many of those places are under constant threat of being demolished to build condos or sold to speculators and large corporations that will increase rents and turnover,” Trudeau said at the announcement.
“People are being priced out of their communities and that’s not okay. So we have to help nonprofits and community partners acquire units and preserve rents at a stable level.”
Meanwhile, the Conservatives are calling for the House of Commons housing committee to be recalled to discuss worsening affordability of homeownership and a stark prediction from the Canada Mortgage and Housing Corporation (CMHC).
The loan portion of the fund is valued at $1 billion, while $470 million is set aside for contributions to non-profit organizations.
The government’s stated goal is to use the loans and funding to help non-profits and other like-minded groups purchase apartment buildings that go up for sale in order to protect lower rental rates for vulnerable renters.
Last month, federal NDP Leader Jagmeet Singh called for the creation of such a fund as part of what he called his “budget demands.” These demands included a national school lunch program, which the Liberals also plan on including in the April 16 budget.
“So we’ve got to protect what we have that’s affordable. And that’s why a renters protection fund is something we’ve called for. And the government, the liberals finally announced that today. We’ll look at the details more closely, but this is going to protect the people that have affordable homes and keep it affordable,” Singh told Global News in Winnipeg.
British Columbia introduced a similar program to what is being planned at the federal level last year, with a budget of $500 million.
In February, B.C. used $125 million to purchase 290 rental units at a Coquitlam, B.C., housing co-op that will be owned and managed by a land trust. The trust said rents would need to increase, but on an income-tested basis.
This is the latest housing related budget announcement Trudeau has made in the government’s cross-country pre-budget tour.
Housing Minister Sean Fraser says that this will culminate with the release of an updated federal housing strategy ahead of the April 16 budget.
“There’s a few key areas where we’re going to be putting forward measures, including the need to build more homes. We need to support the most vulnerable, the need to make it easier to rent or buy a place to live in this country,” he said in Winnipeg.
Other announcements include $15-billion increase to the apartment loan construction program, $400 million more to the $4.4-billion Housing Accelerator Fund, and a new $6-billion infrastructure fund to help build things like water and sewage hook-ups for new housing builds.
This last item has become a source of tension with several provinces due to the requirement to mandate pre-approved zoning for fourplexes and other small multi-unit dwellings in residential areas.
Conservative Committee Call
Conservative housing critic Scott Aitchison, along with three of his caucus mates, Michelle Ferrari, Tracy Gray and Rosemarie Falk, are calling for a meeting of the housing committee to talk about RBC’s recent report on housing affordability.
However, committee chair, Prince Edward Island MP Robert Morrissey, said that he has not received Aitchison’s letter as of Thursday afternoon nor has the committee’s clerk. Under the standing orders,
The report says that interest rates pushed home ownership to its most unaffordable levels ever.
According to the report, a household with an average income needs to spend 63.5 per cent of its income to cover the cost of owning an average home.
“They’re spending record amounts of money and getting terrible results. If we graded them based on how much they spent versus how much they actually get built, well they’d be doing well, but instead they get an F for home construction,” Ontario Conservative MP Michael Barrett told Global News.
The CMHC expects a lower level of housing starts in 2024, with a slight improvement expected over the next two years. The CMHC attributes the slowdown in new builds to interest rates, and they do not expect construction from 2025-2026 to reach 2021-2023 levels.
This leads the CMHC to project that home costs could reach peak levels seen in 2022 next year, potentially surpassing those prices in 2026.
The CMHC also expects rental construction improvements to meet demand, as the high cost of owning a home means more people are renting for longer.
RBC economists estimate that Canada needs to build 315,000 homes annually up until 2030 to keep up with population growth and housing demand. Their report says that in recent years, Canada has completed 220,000 to 240,000 homes in recent years.
The Conservative housing pitch is to tie federal-municipal funding transfers to getting homes built. Essentially, a municipality that surpasses housing targets would get more money from Ottawa, and would receive less federal cash if targets are missed.
— with files from Global News’ Darrian Matassa-Fung
Comments