Fixing the housing crisis requires more buy-in from private sector, CMHC head tells MPs

Achieving housing affordability is an "all-hands-on-deck" effort that will require more buy-in from the private sector, the Canada Mortgage and Housing Corporation (CMHC) says.

On Monday the outgoing head of the CMHC told parliamentarians that governments need to create the conditions necessary to attract more private sector capital.

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"The biggest player in our view, is really the private sector,” said the CMHC's outgoing president and CEO Romy Bowers. "The private sector provides the vast majority of housing in Canada ... But even the private sector won't be able to just buy Canada out of this situation."

Bowers told parliamentarians that skilled labour shortages are hampering efforts to speed up the construction of new homes and that innovation in the industry is key. She said that while Canada's National Housing Strategy includes collaboration with the private and non-profit sectors, more needs to be done.

"We can't keep building houses the way we have for decades," Bowers said.  

Unveiled in 2017 and passed in 2019, the National Housing Strategy recognizes housing as a human right and committed Ottawa to take steps to further that goal by committing tens of billions of dollars to build new homes, renovate existing homes and cut homelessness in half.

Since then, Ottawa has announced it will remove the GST on purpose built rental homes and has created a multi-billion dollar Housing Accelerator fund to fast track the creation of 100,000 new homes.

Still, the CMHC says there is a need for 3.5 million additional housing starts above what is currently planned.

ADDING SUPPLY BY TURNING EMPTY OFFICES INTO HOMES

One way to increase the housing supply could be to turn empty office buildings into rental apartments. Many companies have gone virtual or offered remote work options to employees since the pandemic began leading to higher office vacancy rates across the country.

The Canadian Urban Institute looked at the possibility of turning of office space into homes in Canadian downtowns and found that while complex, conversions can offer new revenue models, quicker timelines for developers, and can help revitalize downtown cores. Their April report estimated there is an opportunity for at least 18,000 to 22,000 units through conversion in the cities it studied.

Jennifer Barrett, the managing director at the Canadian Urban Institute, estimates there is at least two million square feet of empty office space in the nation's capital, which has an office vacancy rate of about 12 per cent.

"We don't have an office space crisis we have a housing crisis," Barrett said.

Ottawa's plethora of brutalist, post-war buildings could be a good start. The style's construction relies heavily on concrete and cement, and most of the buildings are now in need of repair or update.

"Our downtowns were for a single use which was the office worker and now that we aren't seeing individuals return to the downtown at the same rate as they were before its really an opportunity to re-think how our downtowns become twenty-four hour neighborhoods," she said.

That work has already started, with one such building opening recently in downtown Ottawa.

"Depending on the building, most of the time a conversation to house is quicker, particularly in a case where you have to demolish and rebuild a building, Barrett said. "It could be an opportunity to bring housing to market more quickly."

That could help the low-income Canadians supported by affordable housing advocacy group ACORN. On Monday, armed with more than 400 tenant testimonies, the group marched to the CMHC's office demanding more options for affordable housing.

Amanda Teske, a local Ottawa ACORN chair, says many of its members have been kicked out of their apartment so their landlords can renovate their units. Others, she said, tell stories of living with cockroaches, mould and water damage.

"We are trying to get some new affordable housing in place, not market value so people have a chance to afford the places they live instead of being driven out," Teske said. "It's pretty unaffordable out there."

According to rentseeker.ca, the cost of a one bedroom apartment in Ottawa has gone from $1,378 a month in 2019 to $1,700 a month in 2023. In Toronto, a one bedroom apartment that cost $1,690 in 2019 is now $2,188.