Measures intending to accelerate the pace of housing construction fail to provide an instantly actionable solution
The federal government’s updated housing plan as outlined in its fall economic statement is not yet the “immediate, urgent response” required to address the ongoing housing crisis, according to Steve Pomeroy, senior research fellow for the Centre for Urban Research and Education at Carleton University.
In an interview with CBC News, Pomeroy described the plan as “$15 billion for new construction and another billion for affordable housing, but that money’s not going to flow until 2025. And then it takes two or three years at least for units to be built.”
The measures intending to accelerate the pace of housing construction fail to provide an instantly actionable solution.
“They’re basically coming up with a solution that creates a solution four years from now for a problem that exists today,” Pomeroy said. “In a crisis you need an immediate, urgent response.”
Pomeroy said that the federal government could further improve housing accessibility and affordability by providing direct assistance for those most in need.
“If you really wanted to help people in the short term, [add] things like the Canada Housing Benefit, which gives people a few hundred dollars a month to help them manage their rents,” he said.
The Canadian federal government plans to allocate approximately $20.8 billion over six years to incentivize the development of housing supply and address affordability challenges.
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 22, 2023
Read more: https://t.co/D9lgDIdqgl#mortgageindustry #housingmarket #housingsupply #affordability
Housing plan could further burden the market, economist says
While welcomed by multiple quarters, the Canadian government’s housing plan announced last week has also garnered its fair share of criticism.
A major concern for economist David Rosenberg is that the plan could end up further burdening the already overheated housing market, and even lead to higher rates for longer.
The outlined relief policies are aggravating the risk of “prolonging the correction in the housing market and favour(s) existing mortgage holders remaining overextended at new buyers’ expense,” Rosenberg wrote in a recent client note.
In turn, this could “potentially force the Bank of Canada to keep its policy stance tighter than desired,” he said.
