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Overview of the new $4 Billion Housing Accelerator Fund
Canada's dream of affordable home ownership and comfortable rental living is facing significant challenges. The federal government's 2023 Housing Action Plan aims to address these issues head-on. This article takes a closer look at the plan and its implications for the real estate market.
The Ambitious Goal: Building More Homes
The heart of the plan is an ambitious goal set by the Canada Mortgage and Housing Corporation: constructing 3.5 million new homes by 2030. This move comes in response to the rising housing demands in both urban and rural areas of Canada. The plan also highlights a considerable increase in federal housing investments, which have more than doubled since 2015.
Breaking Down Barriers to Construction
One of the major hurdles in housing development has been zoning and regulatory barriers. The plan addresses this by introducing the $4 billion Housing Accelerator Fund, which incentivizes municipalities to eliminate prohibitive zoning barriers and facilitate faster construction.
Focus on Rental Housing
Approximately one-third of Canadians rent their homes, yet the supply of rental apartments has not kept pace with demand. The plan aims to change this by removing the Goods and Services Tax (GST) from new purpose-built rental housing projects. This tax exemption, effective from September 2023 to the end of 2030, is expected to expedite the construction of rental homes.
Supporting Builders with Low-Cost Financing
To encourage more rental home construction, the government has revamped the Rental Construction Financing Initiative into the $25 billion Apartment Construction Loan Program. This program offers low-cost financing to builders, supporting the construction of over 46,000 new rental homes since 201.
While the 2023 Housing Action Plan outlines a promising path towards addressing Canada's housing crisis, it is not without its challenges. The success of these initiatives depends on effective implementation and cooperation across various levels of government. As real estate professionals, it's crucial to stay informed and adapt to these changes, ensuring our clients are well-equipped to navigate the evolving real estate landscape.