Opinion: Here's what the Liberals should be doing to encourage home building

With higher interest rates, higher prices for construction materials and tremendous competition to secure skilled labour, the costs of all construction have gone up. CMHC’s evaluations have not, however. Nor have they kept pace with the rapid population growth many communities have experienced.

Peterborough, for example, is one of the most competitive urban rental markets in Ontario, yet it is still classified as “rural” by CMHC’s underwriters. In such markets, the ”affordable” units that CMHC requires the developer to subsidize must be made available at rates well below what CMHC would allow in a similar market recognized as urban. As a result, the rate developers can charge for these units significantly impacts their ability to finance such projects.

With few other alternatives for would-be developers seeking funding, CMHC’s loans are a unique means to address an increasingly urgent need. But they must be updated and their rate of approval sped up to get more rental construction underway. Unfortunately, CMHC moves slowly, with a growing queue of projects seeking funding. Prioritizing larger projects where there is great market demand should be an urgent priority for the minister.

Speaking of speed, all jurisdictions need to make housing approvals faster. Full stop. There is no solution to this crisis without a dramatic improvement in how fast all levels of governments approve new housing proposals. Private capital simply cannot sit around and wait for bureaucracy to move at its normal glacial speed. Further incentives — like municipal tax abatements on housing developments and the suspension of development charges and HST on new rentals — could really get things moving.

And there is even more that can be done. The federal government is not typically the primary partner in either housing or infrastructure projects, but it is a major financial contributor to both in cities all over the country. What Ottawa lacks in direct policy levers on housing construction it can largely make up for with sheer financial firepower.

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