Workers from Caivan Homes look on from a modular home under construction in Ottawa during Prime Minister Carney’s announcement for the new agency, Build Canada Homes, on Sunday.Justin Tang/The Canadian Press
The residential development industry expressed relief Monday that the federal government’s new housing entity will not get into the business of building homes and instead will partner with developers.
Build Canada Homes (BCH) was introduced earlier this year as a government entity that would “get the federal government back in the business of building homes.”
But with few specifics unveiled at the time, the idea did not sit well with homebuilders, who have been dealing with a significant drop in sales and rise in costs. They were concerned that creating a new federal developer would add another layer of bureaucracy and complexity.
But some of those fears were put to rest by Prime Minister Mark Carney’s Sunday announcement, which provided the most detail to date on BCH’s role in low-cost, below-market housing.
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In outlining the new entity, Mr. Carney said its focus would include deeply affordable housing, using public land for housing and helping get projects off the ground so that “builders can do what they do best, which is to build.”
“The Prime Minister very clearly said it would be done in partnership with the private sector,” said Dave Wilkes, president of Building Industry and Land Development Association (BILD), a trade group that represents some of the largest developers in big Canadian cities.
Housing charity Habitat for Humanity Canada said it is clear that BCH will allow non-profit groups like itself to develop homes. “They are looking to catalyze the growth of a non-market housing building sector,” said Alana Lavoie, Habitat’s national director of housing policy and government relations.
B.C. residential developer Polygon Realty Ltd. called it positive that the Prime Minister talked about partnering with the private sector. “I think that is hugely important,” said Neil Chrystal, Polygon’s president and chief executive.
Mr. Chrystal noted, however, that a B.C. location was not included in BCH’s first group of public land housing projects. The federal government announced that it would build on public land in Dartmouth, Longueuil, Que., Ottawa, Toronto, Winnipeg and Edmonton. (The specific parcels of land or addresses were not provided.)
The announcement also partly clarified how BCH will work with the current federal housing agency, Canada Mortgage and Housing Corp.
That agency, which provides mortgage insurance that protects lenders if homeowners default on their mortgage, has been in charge of administering the federal government’s $115-billion-plus National Housing Strategy.
That 10-year plan started under the previous federal Liberal government led by Justin Trudeau. Its overarching goal was to improve housing for those in greatest need.
The largest part of the strategy was to provide developers with cheap loans to develop rental-only apartment buildings as long as some of the units were affordable. That was criticized by housing advocates who said the units were not affordable.
“It was effective at getting rental off the ground, but it had nothing to do with affordability,” said Carolyn Whitzman, a housing researcher and adjunct professor at the University of Toronto’s School of Cities.
In his weekend announcement, Mr. Carney defined affordable housing as not being more than 30 per cent of a household’s before-tax income − a definition that is aligned with housing advocates.
Ms. Whitzman said it was “great to see a return to that definition of affordability.”
The National Housing Strategy is due to expire in 2028. It is not clear whether some of the programs will be extended. BILD’s Mr. Wilkes said affordability requirements should be removed from programs like those providing cheap loans for new rental buildings.
Kevin Lee, chief executive of the Canadian Home Builders’ Association, said it was helpful to understand that BCH will support low-income housing. But he also said: “We also have to worry about the rest of the market and market housing.”