(Bloomberg) -- Prime Minister Justin Trudeau is being advised to create an “industrial strategy” to address Canada’s housing shortage, including tax changes and cheap financing to spur builders to create about two million new rental units in seven years.
The country needs to effectively triple the pace of homebuilding to alleviate a housing crunch that’s being exacerbated by rapid population growth, according to a new report from three experts in housing policy.
Trudeau named a new housing minister last month in a government shakeup amid polls that show his Liberal Party losing support among younger voters worried about the rising cost of living. An acute shortage of available apartments in places like Toronto and Vancouver drove the fastest growth in rents in decades last year.
The report’s authors — Tim Richter of the Canadian Alliance to End Homelessness, Mike Moffatt of the Smart Prosperity Institute and Michael Brooks of Realpac — say the government should introduce measures within months to change the dynamics of the housing market.
They call for 5.8 million homes to be built by the end of 2030, of which two million would be purpose-built rental units. Doing so would require a co-ordinated plan among city, provincial and federal governments and a strategy involving public and private builders, the nonprofit housing sector, investors and labor.
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The authors urged the government to reform Canada Mortgage & Housing Corp.’s fees and change the tax code in ways favorable to rental housing — such as eliminating sales taxes on new capital investments for apartments.
Other recommendations include:
- Provide low-cost, fixed term financing for construction of new rental buildings and upgrading existing ones
- Create a national workforce and immigration strategy on housing, including construction trades and other groups related to housing production
- Create property acquisition programs for nonprofit groups, to help them buy rental projects and hotels and convert offices to apartments
- Create a Homelessness Prevention and Housing Benefit, which would provide rent relief to as many 385,000 households at imminent risk of homelessness
The report by Richter, Moffatt and Brooks describes a housing “crisis” that is worsening.
“Millions of people — particularly those with the lowest incomes — are facing rapidly rising housing costs, driven significantly by an extreme lack of supply of the right types of rental housing,” they say in the report.
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