(Bloomberg) -- It will cost C$1 trillion ($729 billion) to build enough homes to ease Canada’s housing affordability crisis by the end of the decade, the country’s national housing agency said.
The scale will require massive investment from the private sector, which Canada Housing & Mortgage Corporation will push for in coming months, Aled ab Iorwerth, its deputy chief economist, said in a blog post Tuesday.
The high cost to rent or buy a place to live has become a top political issue in Canada, as a population surge, fueled by immigration, puts further strains on a housing market that has been short of inventory for years. That’s left politicians at all levels of government rushing to ease constraints on new supply, from changing zoning rules, to offering tax breaks to apartment builders.
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An additional 3.5 million new housing units are needed by 2030 beyond what would be built anyway. “The scale of the challenge is so large that the private sector must be involved — governments cannot do this on their own,” Iorwerth wrote.
Social housing will be part of the solution but more market housing — which represents 95% of current housing stock — will be essential, both for rent and for sale. The agency is making various financial incentives available, while also trying to ease labor shortages and increase productivity in the construction sector, he wrote.
“We will renew our arguments on the causes of housing unaffordability and make the case to support massive investment from the private sector in housing,” he said. “The private sector has a key role to play and needs to up its game as well.”
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