Just one small problem, though: 90% of what he proposes is Provincially regulated, not Federal at all, so watch for Quebec, Alberta and Ontario to tell him to go take a flying leap.
On to top that, one of the main problems with building new houses or renovating them these days is a compound of two matters (I know, because I work for BMR, one of Quebec's major Hardware/builder's yard): First, the contractors have a hard time hiring enough trades; second: the Covid crisis around the world ( and particularly in China) means that the prices of building materials have shot up by more than 100% over the last year, and shortages will remain for a few years yet (I work in receiving. Before Covid, I used to have about 10% back-orders on most of my orders at delivery time. It has gone all the way up to near 60%, and now I am getting back to about 40%). We have client contractors right now who are taking 3 to 6 months pauses because their clients refuse to let them continue on a contract that would see the house delivered at 50 to 60 % higher price than the one evaluated a year ago when they contracted.
Also, and Trudeau seems to ignore that fact: House flippers are not the cause of house prices inflation running rampant. They are, in fact, one of the main source of renovated house and gentrification of dilapidated buildings. I can't even comprehend how a government run program could do the same. Flippers just know by experience what renovation make economic sense and sell. Similarly, they know which buildings can be so renovated as opposed to demolished. I am not convinced any government run program can figure that out ... unless they use flippers.
So this is the plan as far as I can gather.
- new savings account for under 40s to buy their first home - they can save up to $40k and withdraw it tax free to buy
- double first time home owners tax credit from $5k to $10k
- force CMHM to slash mortgage insurance rates by 25%
- rent-to-own program with $1 billion to create a pathway for renters to own in 5 years or less
- build or repair (?) 1.4 million homes in four years by giving cities "new tools" to speed up constructions
- $4 billion fund cities can use if they build "middle class homes"
- $2.7 billion over 4 years to build or repair more affordable homes
- money to convert empty office space to housing
- some tax credit so people can add a 2nd unit to their home
- more money for indigenous housing (no $ figure in article)
- ban blind bidding, establish a legal right to "home inspection", demand banks give mortgage deferrals of up to 6 years if someone loses their job
- 2 year ban on foreign buyers
- expand the upcoming tax on vacant housing owned by non-resident and non-Canadians to include foreign-owned vacant land in large urban areas
- anti flipping tax that requires properties to be held for at least 12 months
The savings plan needs more details.
Double first time home owners tax credit is decent, but we are working around the margins right now.
Slash mortgage insurance rates is decent, but so far these are all demand side issues, and if the under 40s start rushing the market, this will only drive up the prices more, throwing gasoline on the fire.
Rent to own worked in the UK, surprised to see them lift it from there.
If flippers go corporate and work with the cities, the major source of holding up rezoning and holding up development, this would be huge.
4 billion to fund cities might get cities on board, again, one of the chief architects of this crisis.
Convert office space to housing might be a good idea going forward with office spaces hollowing out due to the pandemic.
Ban blind bidding is provincial, but I think if the PM gets on the bully pulpit and blames provinces for the issue ( which is it) then that may force the provinces to budge.
2 year ban on foreign buying is stealing straight from the CPC, but a good optics policy. Might not help much, but its a big visible sign that they are trying to do something.
Taxing vacant housing is a no brainer right now.
Anti flipping is questionable. Not sure how this works, but again, if flippers go corporate then the effect might be mitigated.
nationalpost.com
