CHBA Opens Conversation with Feds on High Canadian Home Prices

Posted by Justin Havre on Monday, November 28th, 2016 at 2:35pm.

The Liberal government has announced that it intends to address our country's affordability issues in the real estate industry. Canadians are waiting for specific plans, but in the meantime, the Canadian Home Builder's Association has a few suggestions not only about the overheated markets of Vancouver and Toronto but everywhere, including the Edmonton market.

What can the feds do about the high cost of housing in Canada?

The Canadian Real Estate Magazine recently sat down with Bob Finnigan, CHBA President to get his thoughts on what the government could or couldn't do to help get more Canadians into their own homes.

Finnigan admitted that affordability is one of the housing industry's biggest challenges. He said that the CHBA has prepared and shared a document of recommendations for and with the government during the "Let's Talk Housing" consultations early in November. The document, just one of many submitted to the federal government during the Toronto consultations, was entitled "Continuing the conversation about homes, communities and Canadians" outlines a number of suggestions from within the industry. That includes:

  • Increasing the amortization for mortgages to a minimum of 30 years. A 30-year mortgage has been available in the past, but by increasing the term the CHBA believes that this would open up the real estate market to an addition 80,000 families who would then qualify.
  • Government funding to pay for half of all infrastructure in new communities. Currently, municipalities installing roads and utilities are passing along the high cost of installing this infrastructure onto property owners through property tax increases. This tax burden is hard on young families just getting into the market and can make or break their ability to buy a new home. Developers in certain Canadian markets who take on the cost and construction of infrastructure also pass along the additional cost to home owners. This can be mitigated with the federal government providing funding assistance at the local level.
  • A tax credit for home renovation for people purchasing their first home would provide relief. The CHBA suggest that this credit could be refundable. This would allow first-time home buyers to purchase a home at a lower price point, possibly a fixer-upper that would require work prior to truly being habitable. It would also help increase the value of the home allowing a first-time buyer to move up, at which time any tax rebate could be returned to Canada Revenue.
  • More research funding to industry principals for research to promote better building practices, increasing the consistency of building codes across regions, implement high standards in trades and optimizing support for Canadians eager to learn a new trade.
  • Funding to boost programs implemented by employers such as on-the-job-training and immigration practices.

The Consultation Process

In response, the federal government has taken information like this from a variety of stakeholders in the housing industry and has put together a sketch of its plan to make housing more affordable for Canadians especially in our country's larger urban areas.

The federal minister of families, children and social development, Jean-Yves Duclos, said the report is entitled "What we heard: Shaping Canada's national housing strategy." He said a national plan will bring together all the resources of both government and private sector organizations as well as the ideas and feedback non-profit organizations and will improve housing outcomes.

The report addresses all housing concerns, from homelessness to low-income options to the high cost of housing for Canada's middle class. The state of housing on First Nations land across the country are also part of this process.

The final report is expected to be made public early in 2017.

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