Federal Government's New Housing Entity to Partner with Developers, Allaying Industry Fears

Strategic Insights -

The residential development industry has been dealt a significant reprieve after the federal government's new entity, Build Canada Homes (BCH), revealed that it will not engage in the business of building homes itself. The announcement, made by Prime Minister, comes as a relief to industry players, who had expressed concerns about the potential creation of another layer of bureaucracy and complexity. BCH's focus will be on low-cost, below-market housing, using public land for housing, and helping to get projects off the ground so that builders can do what they do best.

Key Takeaways:

  • The federal government's new entity, Build Canada Homes (BCH), will not engage in building homes itself, but rather partner with private developers to create low-cost, below-market housing.
  • BCH's focus will be on using public land for housing and helping to get projects off the ground.
  • The entity's definition of affordable housing is aligned with housing advocates, with a maximum of 30% of a household's before-tax income.
  • The National Housing Strategy, which is due to expire in 2028, is uncertain whether its programs will be extended.
  • The current federal housing agency, Canada Mortgage and Housing Corp. (CMHC), will continue to administer the National Housing Strategy.
  • **Industry Reactions:** BILD's president, Dave Wilkes, praised the Prime Minister's announcement, saying that it provided clarity on the entity's role in partnership with the private sector.
  • **Non-Profit Involvement:** Habitat for Humanity Canada's national director of housing policy and government relations, Alana Lavoie, stated that BCH will allow non-profit groups like themselves to develop homes.
  • **Private Sector Partnership:** B.C. residential developer Polygon Realty Ltd.'s president and CEO, Neil Chrystal, welcomed the announcement, citing the importance of partnering with the private sector.

Statistics:

  • $115 billion+ - The value of the National Housing Strategy, a 10-year plan initiated by the previous Liberal government.
  • 10 years - The duration of the National Housing Strategy, which is set to expire in 2028.
  • 30% - The maximum percentage of household income that BCH defines as affordable housing.

Sources:

  • Globe and Mail, Carney says Build Canada Homes will partner with private sector on new housing projects (March 12, 2024)
  • Building Industry and Land Development Association (BILD)
  • Habitat for Humanity Canada
  • Polygon Realty Ltd.