Here's some positive news. This past week, the Government of Canada announced additional details around its $6 billion Canada Housing Infrastructure Fund (CHIF). The goal of the fund is to accelerate the construction of housing-supportive infrastructure (water, wastewater, stormwater, and solid waste), and the plan is to deliver it through two distinct funding streams.
The first is what they are calling a "direct delivery stream", and this is how the first $1 billion is going to be allocated. Municipalities and Indigenous communities will need to apply, and the funds are expected to be distributed over the next 8 years. But to be eligible -- and this is the positive news -- municipalities will need to have done the following:
Adopt zoning permitting "four units as-of-right" per lot in all low-density residential areas that have municipal servicing
Implement a three-year freeze on development charge increases beyond whatever rates were in place on April 2, 2024 (which is when the initial CHIF announcement was made)
Here's some positive news. This past week, the Government of Canada announced additional details around its $6 billion Canada Housing Infrastructure Fund (CHIF). The goal of the fund is to accelerate the construction of housing-supportive infrastructure (water, wastewater, stormwater, and solid waste), and the plan is to deliver it through two distinct funding streams.
The first is what they are calling a "direct delivery stream", and this is how the first $1 billion is going to be allocated. Municipalities and Indigenous communities will need to apply, and the funds are expected to be distributed over the next 8 years. But to be eligible -- and this is the positive news -- municipalities will need to have done the following:
Adopt zoning permitting "four units as-of-right" per lot in all low-density residential areas that have municipal servicing
Implement a three-year freeze on development charge increases beyond whatever rates were in place on April 2, 2024 (which is when the initial CHIF announcement was made)
Toronto has already done number one. But many/most other municipalities have not, so this should provide a further incentive. As for requirement number two, my understanding is that this is not (yet) in place pretty much anywhere. I haven't heard of any municipalities committing to this. So I'm taking this as incremental good news. (Please correct me if I'm wrong.)
There are, however, important caveats: item number two only applies to municipalities with populations greater than 300,000 people. This seems unnecessarily high. And I can speak from firsthand experience working in communities below this threshold.
Three-years also isn't very long when it comes to development timelines, especially in this market. A complicated rezoning process might take 3 years, or even 10 years. So this is very much for small-scale projects, which may be impactful or it may not be, depending on quickly the market responds to policy changes like requirement number one.
Metro Vancouver, which includes the City of Vancouver and 20 other municipalities, is
Toronto has already done number one. But many/most other municipalities have not, so this should provide a further incentive. As for requirement number two, my understanding is that this is not (yet) in place pretty much anywhere. I haven't heard of any municipalities committing to this. So I'm taking this as incremental good news. (Please correct me if I'm wrong.)
There are, however, important caveats: item number two only applies to municipalities with populations greater than 300,000 people. This seems unnecessarily high. And I can speak from firsthand experience working in communities below this threshold.
Three-years also isn't very long when it comes to development timelines, especially in this market. A complicated rezoning process might take 3 years, or even 10 years. So this is very much for small-scale projects, which may be impactful or it may not be, depending on quickly the market responds to policy changes like requirement number one.
Metro Vancouver, which includes the City of Vancouver and 20 other municipalities, is
proposing to increase its development cost charges (DCC)
:
Metro Vancouver is proposing to increase DCCs by roughly $23,000 per new single-family home; $21,000 per new townhome; and $14,000 per new apartment.For example, fees for a townhouse in Vancouver will rise from $10,027 today to $30,861 by 2027.
In response to this, federal housing minister, Sean Fraser, has just pulled $138 million in funding that was intended to accelerate housing permits and new affordable housing projects in Surrey and Burnaby.
This makes some sense. Because it is pretty weird to say, "Hey, we need more affordable housing. Give us some money for this and, while you do that, we're also going increase the cost of building new housing."
Of course, this is the whole growth-should-pay-for-growth mantra. And supposedly, there's growth-related infrastructure that needs to be built.
To be fair, Metro Vancouver is also proposing to increase its property taxes: 12% in the first year, 11% for the next two years, and then 5% for the next three years. So this is not all going onto new supply.
I don't know enough about the finances of Metro Vancouver to comment on these numbers specifically, but I do think it's important that policy makers understand what the current market environment means for new housing.
It is difficult, and in many cases impossible, to underwrite new housing projects today. Which means that even if all fees and charges were to remain unchanged, we are going to see a decrease in new housing supply.
proposing to increase its development cost charges (DCC)
:
Metro Vancouver is proposing to increase DCCs by roughly $23,000 per new single-family home; $21,000 per new townhome; and $14,000 per new apartment.For example, fees for a townhouse in Vancouver will rise from $10,027 today to $30,861 by 2027.
In response to this, federal housing minister, Sean Fraser, has just pulled $138 million in funding that was intended to accelerate housing permits and new affordable housing projects in Surrey and Burnaby.
This makes some sense. Because it is pretty weird to say, "Hey, we need more affordable housing. Give us some money for this and, while you do that, we're also going increase the cost of building new housing."
Of course, this is the whole growth-should-pay-for-growth mantra. And supposedly, there's growth-related infrastructure that needs to be built.
To be fair, Metro Vancouver is also proposing to increase its property taxes: 12% in the first year, 11% for the next two years, and then 5% for the next three years. So this is not all going onto new supply.
I don't know enough about the finances of Metro Vancouver to comment on these numbers specifically, but I do think it's important that policy makers understand what the current market environment means for new housing.
It is difficult, and in many cases impossible, to underwrite new housing projects today. Which means that even if all fees and charges were to remain unchanged, we are going to see a decrease in new housing supply.
