Deputy Prime Minister and Minister of Finance Chrystia Freeland, along with Sean Fraser, Minister of Housing, Infrastructure and Communities, and François-Philippe Champagne, Minister of Innovation, Science and Industry, announced a new plan on February 27th, 2024 to further address housing affordability issues. This initiative aims to drive the construction of over 5,000 affordable homes.1
It was announced alongside additional measures to foster competition to reduce prices, especially for groceries, for Canadians. These initiatives are aimed at accelerating home construction and alleviating affordability challenges, aligning with Canada’s overall Housing Action Plan. By unlocking more housing options, it is projected that overall affordability will be improved.
“Every week, our government is taking new action to build more homes, faster, and make housing more affordable for Canadians. This week, our economic plan is unlocking more affordable homes and creating new pathways to homeownership for Canadians. Today’s investment through the Affordable Housing Innovation Fund will enable innovative homebuilders to scale-up their revolutionary techniques and build more than 5,000 new homes, faster,” commented Freeland.
The government will be allocating $123 million via the Affordable Housing Innovation Fund. This significant investment is aimed at boosting the construction of affordable housing. This funding will be channelled towards supporting eight pioneering homebuilders, to assist them in pioneering and integrating new homebuilding technologies, supporting them in developing, testing and streamlining potential innovative techniques. As a result, the implementation of these advanced technologies is expected to not only accelerate the pace of construction and mitigate costs, but also expand the pool of affordable housing options available to Canadians.
According to reports from the federal government, investments at the federal level have already begun to enhance housing construction activities nationwide.2 There have been record-breaking numbers of housing starts in major urban centers, including Toronto and Vancouver during 2023. This surge in construction activity has been bolstered by a concerted focus on accelerating rental construction initiatives.
The federal investment in housing in 2023 is significantly higher compared to the 2013 to 2014 investments, with $9 billion more being allotted to help address housing and affordability challenges. The average annual federal spending on housing since 2015 has more than doubled, compared to the levels of investment seen from 2007 to 2015.
Such initiatives are likely to have an impact on the real estate market and may impact investors’ plans. Increased construction of affordable housing may lead to a more balanced market, potentially reducing upward pressure on housing prices. Investors may need to adapt their strategies to account for these developments, considering the evolving landscape of housing policies and market dynamics.
