The federal government is adding another $15 billion to its apartment construction loan program, the latest incentive to create more housing in the multifamily market, where vacancy rates are at all-time lows.
Officials in Ottawa said the budget this month would include the money it expects to facilitate an extra 30,000 new apartments and that the program's financing is on track to build over 131,000 new apartments within the next decade.
"We're making it easier, cheaper, and faster to build more homes in Canada," Prime Minister Justin Trudeau said in the announcement. The additional funds are expected to "cut red tape, speed up development, and build more homes, so that Canadians from teachers, to nurses, to construction workers can afford to stay in the communities where they work. It's making the housing market fairer for every generation," Trudeau said.
The program, which already has committed $55 billion to the apartment industry, will also introduce reforms including:
- Extending loan terms;
- Extending access to financing to include housing for students and seniors;
- Introducing a portfolio approach to eligibility requirements so builders can move forward on multiple sites at once;
- Providing additional flexibility on affordability, energy efficiency, and accessibility requirements; and
- Launching a new frequent builder stream to fast-track the application process for proven homebuilders.
Ottawa's announcement comes on top of a proposed new $6 billion Canada Housing Infrastructure Fund, a move rejected by both Ontario and Quebec this week because it came with strings attached, requiring certain densities of housing developments before the federal government would transfer money to a province.
"It's not up to the province to dictate where every building is going to go," Ontario Premier Doug Ford said at a press conference this week. "I believe in letting municipalities determine what is good for their communities and what is not good for their communities."
The premier of Canada's largest province has adamantly rejected forcing municipalities to allow fourplexes in existing residential neighbourhoods dotted with single-family homes.
The Federation of Rental-Housing Providers of Ontario welcomed the announcement by noting it will provide "much-needed" funding to build more rental units across Ontario. It also said it supports the infrastructure fund.
"The $15 billion boost to the Apartment Construction Loan program will help incentivize purpose-built rental construction," said Tony Irwin, president of FRPO, in a statement.
He said changes to the program structure, including term extensions and expedited applications, will help with the housing shortage across Canada.
Canada Mortgage and Housing Corp. has said the vacancy rate across the country dropped to a new low of 1.5% in 2023.