Federal government loans $20M to P.E.I. to build dozens of rental units

A national housing promise is breaking ground in P.E.I., where a $20-million federal loan is helping build 60 new rental units in Stratford.

Ottawa wants to build 500,000 homes per year, a pace and scale it says hasn’t been seen since the Second World War. The project in Stratford is a small step in a bigger push to double the national rate of homebuilding.

Federal Housing and Infrastructure Minister Gregor Robertson was on the Island for the announcement, saying the homes will be in the budget for many families.

“Not exclusively affordable housing or deeply affordable, but coming in below median incomes, which is what’s critical,” Robertson said.

Under federal guidelines, affordable housing refers to units that cost no more than 30 per cent of median household income - a threshold that qualifies this project for funding under the Apartment Construction Loan Program.

“(The program) eases developers’ barriers to provide affordable housing amid rising demand for population and economic growth,” said Steven Jackson, president of JCJ Properties and Development.

According to the Canada Mortgage and Housing Corporation, the country needs between 430,000 to 480,000 housing starts annually to restore pre-pandemic affordability. But the national housing agency is projecting a slowdown later this year.

Experts say higher land and construction costs, plus tariffs on steel, are squeezing developers.

“I think the challenge is for the government just to tread water, let alone experience a big increase in housing starts,” said Mike Moffatt, director at the Missing Middle Initiative. He says the annual number of new builds needed is closer to 330,000 units.

In P.E.I., housing starts reached a record last year, and the province is building faster than the national average. But to meet Canada’s mark, the Island will have to surpass historic highs and maintain that pace.

Robertson said the way forward is building homes in factories.

“That’s not just entire homes, like modular homes: it’s panels, it’s kitchen and bath pods,” said the minister. “We’re also looking at reducing the development charges across the country.”

Moffatt said the goal is a “moon shot.”

“It’s a very extreme goal,” he said. “We haven’t seen the policy prescriptions to go along with that target.”

The federal Conservatives have criticized the Liberals’ plan, instead proposing measures to speed up permits and cut taxes for both builders and buyers.

“A housing crisis worsens as builders can’t afford to build and buyers can’t afford to buy,” said federal Conservative Leader Pierre Poilievre Monday night after winning the byelection in the Alberta riding of Battle River-Crowfoot.

To support its long-term strategy, the federal government is creating a new entity called Build Canada Homes, which is meant to provide financing for affordable homebuilders to scale up supply quickly.