I am deeply skeptical of our federal government getting into the real estate development business, and I think a lot of the industry shares this sentiment. However, there are aspects of Carney's housing platform that do make sense. Here's a recent article by Frances Bula in Storeys citing industry reactions:
Do not create a federal housing developer, empower the private sector to do its thing
Multi-Unit Residential Building (MURB) program (which previously existed from 1974 to 1981 and spurred a lot of new rental housing)
Capital gain deferral on funds immediately re-invested back into housing (something akin to the 1031 exchange in the US)
Remove the federal ban on foreign investors
Dramatically reduce / eliminate municipal development charges (though, there's the important question of how exactly this gets done)
Expand the no HST on new housing (Carney's current plan is to only eliminate it for new homebuyers and for new homes under $1 million)
Tax credits for investors in affordable housing (This is not currently proposed, but I like it too. The US has something called Low-Income Housing Tax Credits, which HUD calls their most important resource for creating new affordable housing.)
Create policies that will outlast the current government, and don't make them convoluted
There are, of course, many other things that need to be done to improve the delivery of new housing in this country, including a lot at the micro level. On this blog, we regularly talk about everything from single-stair buildings to streamlining environmental permissions.
If you have anything else you'd like to add, please leave a comment below. Let's keep the pressure on.
This past week I listened to two podcasts in preparation for Canada's upcoming federal election. I listened to Prime Minister Mark Carney with Scott Galloway and I listened to Pierre Poilievre with Brian Lilley of the Toronto Sun. If any of you have any other recommendations for an interview that I should listen to, please share it in the comment section below.
Here's what I would say. Carney came across as more measured and less direct. But naturally very capable when it comes to understanding the economic implications of our shifting global order. He wasn't forceful when talking about oil and gas pipelines, but I understand that he fully supports them. This is critical to diversifying our trade and frankly gaining more market power.
I'm skeptical of government being able to act as any sort of big developer and/or stimulate a thriving prefab construction industry. The latter is being worked on by a lot of the private sector; what is needed are dramatically lower fees and less barriers to development. I was, however, comforted by the fact that Carney did seem to reduce government's role to an enabler for private enterprise.
Both are promising dramatic cuts to development charges, which is essential. Poilievre is promising to eliminate the federal sales tax on all new homes priced under $1.3 million, whereas Carney wants to do it for homes under $1 million and only for first-time buyers. Carney also focused a lot on increasing construction trade capacity as a way to dramatically increase overall supply.
Broadly, Poilievre was more focused on "axing the tax" and removing the barriers to developing new housing. As we have