2023-06-18 01:12:18
With a vacancy rate of 1.7%, its lowest in more than 20 years, Quebec is far from being the only Canadian province to face a housing shortage.
Indeed, the Canada Mortgage and Housing Corporation (CMHC) estimates that 3.5 million additional units will have to be built across the country to restore market balance. [avec un taux d’inoccupation de 3 %] and affordability.
The problem is that housing starts fell 25% last month compared to the year 2022.
% decrease in construction in May compared to last year. And since the beginning of the year, it’s 54% less”,”text”:”In Montreal, there was a 73% drop in construction in May compared to last year. And since the beginning of the year, it’s 54% less””>In Montreal, there was a 73% drop in construction in May compared to last year. And since the beginning of the year, it’s 54% less
noted Maxime Rodrigue, President and CEO of the Provincial Association of Home Builders of Quebec (APCHQ), in an interview on the program Facts first.
It’s screaming, he continued. We must have immediate measures to get the construction sites back in motion.
According to Mr. Rodrigue, it is possible to act on certain structural causes that are holding back housing starts. For example, in reducing regulations, mainly the rules for issuing permits; by modernizing the law on labor relations in the construction industry to be attractive to the workforce; and also by ensuring sufficient funding to support social and affordable housing
.
The Mayor of Laval, Stéphane Boyer, believes that cities do have a role to play in promoting the resumption of housing construction by reducing the administrative burden on real estate developers.
“We don’t want to lower the standards of our regulations. We want to make sure that the projects that are being built fit well into the city, meet [aux impératifs de] sustainable development and are safe,” insists Mr. Boyer.
« But we can have criteria that are clear and predictable for manufacturers. Most importantly, the licensing process should be easy. This is rarely the case in cities. »
We must, according to the capacity of our municipal administration, contribute to things going quickly and smoothly, he continues. We can set up automated permits, make the process simpler, faster. It’s important because for promoters, it’s part of their financial risk.
The fight once morest inflation hurts
Maxime Rodrigue believes it is absolutely necessary to tackle the heart of the problem, what has caused the rout of the construction industry in recent months.
What caused the stoppage of construction sites was really the fight once morest inflation
explained the President and CEO of theAPCHQ.
The increase in interest rates and the tightening of financing conditions stopped the machine. No one can buy homes anymore because they no longer qualify. On the other hand, there is no rental project that is set in motion because the financing conditions are no longer there. Math no longer works.
Two years ago, despite disruptions in supply chains and labor shortages caused by the COVID-19 pandemic, 68,000 housing units were built in Quebec. This year, it is expected that there will be less than 40,000.
000 units two years ago, I don’t see why we wouldn’t be able to build as many today”,”text”:”If we were able to build 68,000 units two years ago, I don’t see why we wouldn’t be able to build just as many today””>If we were able to build 68,000 units two years ago, I don’t see why we wouldn’t be able to build just as many today.
believes Maxime Rodrigue. There is room to increase the pace of housing starts for the second part of the year.
« It’s regarding restoring market conditions. This might be done quickly if there was a desire to extend the mortgage amortization period, review the stress test conditions and adjust the tax credit threshold. Instantly, the construction sites would get back into motion. »
A predicted storm
For Adam Mongrain, responsible for the housing file at the organization Vivre en Ville, the storm that is currently raging was announced a long time ago.
million more new units to break even by 2030. This reflects the deficit accumulated year following year.”,”text”:”We might see it coming from afar. The reason we have such a shortfall in terms of supply is that we underbuilt for a very long time. We don’t suddenly need 3.5 million more new units to break even by 2030. That shows the deficit accumulated year following year.””>We might see it coming from afar. The reason we have such a shortfall in terms of supply is that we underbuilt for a very long time. We don’t suddenly need 3.5 million more new units to break even by 2030. That shows the deficit accumulated year following year.
It also speaks to the structural nature of the problem, which the legislative initiatives currently under consideration do not address. According to Mr. Mongrain, the provision of Bill 31 of the Legault government which provides for the end of lease assignments should even contribute to the increase in prices throughout the housing market.
« In the market conditions we’re going through right now, that’s going to increase construction costs. We don’t have to pretend we can’t see it happening, it’s written in the sky. »
$ for a specific location in Quebec, all surrounding rents adjust. The acquisition price of the land is adjusted according to the income from the rent”,”text”:”The residential rents are what dictate prices in the rest of the market because it is the fair measure of what that a household is willing to pay to live in a specific place. If, for example, rents increase to $2,000 for a specific location in Quebec, all surrounding rents adjust. The acquisition price of the land is adjusted according to the rental income””>Residential rents are what drive prices in the rest of the market because they are the fair measure of what a household is willing to pay to live in a specific location. If, for example, rents increase to $2,000 for a specific location in Quebec, all surrounding rents adjust. The acquisition price of the land is adjusted according to the rental income
he explains.
Adam Mongrain, housing director for the organization Vivre en Ville (File photo)
Photo : Radio-Canada
According to Mr. Mongrain, the cessation of lease assignments when the vacancy rate is very low will open the door to the renegotiation of leases to make up for the delay between the old rent and the market rent
.
And in doing so, we will allow an upward adjustment of all markets in Quebec, which will increase all new construction costs, he said. This is an example of the lack of depth in the thinking we currently have regarding housing.
The federal government recently announced $4 billion in assistance over five years through its Rapid Housing Initiative program to help municipalities deal with the crisis. But the complexity of the problem makes some believe that the money will not be enough to solve everything.
It’s not just a question of putting the money in, says Mayor Stéphane Boyer. It casts a much wider net than that.
We are going to have coherent responses and substantial measures to restore the situation when we are going to make housing a priority subject.
concludes Adam Mongrain.
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