Immigration part of solution to Canada’s housing crisis, minister says – Financial Post

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Cities must also relax zoning policies to tap into $4 billion in housing funds, Sean Fraser says

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Canadian cities need to relax their zoning policies if they want to tap into billions in federal funds available for new home construction. That was one of the messages delivered by Sean Fraser, the federal minister of housing, to a lunchtime audience at the Empire Club of Canada in Toronto on Jan. 17. Here are three key take-aways from the event.

Open up zoning to access funds

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In March 2023, the federal government launched the $4-billion Housing Accelerator Fund to fast-track the construction of at least 100,000 new homes countrywide by 2024-25. On Wednesday, Fraser had a message for municipalities trying to access that support.

“If you want to tap into the fund, be more ambitious than your neighbours,” Fraser said. Specifically, be more ambitious when it comes to zoning.

If you want to tap into the fund, be more ambitious than your neighbours

Sean Fraser

The Canada Mortgage and Housing Corp. — the fund’s administrator — has made the elimination of exclusionary zoning as a key best practice for successful applications. That means abolishing low-density zoning and regulations that restrict affordable and social housing in residential areas. Instead, the agency suggests the focus should be on embracing mixed-use development and high-density residential projects near urban cores and transit corridors.

Fraser told the audience that he’s noticed a sudden shift in cities’ attitudes toward reforming zoning due to increased competition for funds, prompting greater openness to change, though some regions remain resistant.

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“There are cities who won’t receive funding because they don’t want to end exclusionary zoning in Canada,” Fraser said. “I know who some of them are and maybe they’ll change their ways.”

Immigration is part of the solution

Fraser acknowledged that high levels of immigration have been intensifying Canada’s housing crisis, in particular in the fall when hundreds of thousands of international students arrived to attend school.

Some, he said, were coming to institutions that were exploiting the international student program for financial gain, something the government needed to address.

Federal Housing Minister Sean Fraser.
Federal Housing Minister Sean Fraser. Photo by Darren Calabrese/The Canadian Press

“I do think there are bad actors in the space who are seeking to personally profit on some occasions under the false promise of permanent residency for students where that will not be the case,” Fraser said. “It’s created a scenario where we’ve seen several 100,000 additional people come to Canada, sometimes under false pretences. This is a challenge we need to address.”

But building more homes and immigration go hand-in-hand, he said.

“We also need to continue to use targeted immigration programs, including some of the changes we made to the express entry system, to allow people who have talent in the skilled trades, where we have a shortage in Canada, to come to Canada and contribute their talents to our communities,” Fraser said.

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Last summer, the National Housing Accord proposed a strategic plan to address Canada’s housing crisis. The “blueprint” recommends an immigration plan to attract workers and an innovation strategy to expedite housing construction, aiming to combat rising rents and home prices.

Moving toward mass production

Fraser also looked to both the past and the future when considering solutions for housing construction, pointing to factory-based mass production as one option that needs to be explored.

“The reality that I see when I talk to people in communities is that if we continue to build homes the way we have for the past century, we will never get out of the situation that we’re in now,” Fraser said.

Regional development agencies can be incentivized to help scale up existing factory based production, but that alone is not enough, he said.

“When I talk to people in the sector, they tell me they need consistency of demand. They need to know if they’re making the investment to build that factory, that they’re going to have orders that will justify the investment they make,” Fraser told the audience.

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A month ago, Ottawa announced plans to initiate consultations in early 2024 for a catalogue of pre-approved designs, aiming to expedite the construction of multiplexes and senior and student residences.

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The plan mirrors a post-Second World War federal policy that utilized straightforward blueprints to accelerate the construction of much-needed homes.

“We also believe it’s going to reduce the barriers for entry for smaller players in the market, who may be looking to avoid the cost of an architect for that first four-plex that they put up as they seek to start building homes and contributing solutions,” Fraser said.

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