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



Addressing Canada's escalating housing affordability crisis demands a collaborative, "all-hands-on-deck" approach, with a primary focus on attracting greater investment and involvement from the private sector, says the Canada Mortgage and Housing Corporation (CMHC).


Romy Bowers, the outgoing President and CEO of CMHC, emphasized the pivotal role the private sector plays in providing housing across Canada during her recent testimony before Parliament. She stressed that even the private sector, while essential, cannot single-handedly resolve the housing crisis, highlighting the need for a multifaceted solution.


Bowers also noted that skilled labor shortages have hindered efforts to expedite new home construction. In this context, fostering innovation within the industry becomes crucial to increase efficiency and productivity.


While the National Housing Strategy, unveiled in 2017 and passed in 2019, acknowledges housing as a fundamental human right, Ottawa has committed to investing billions of dollars in building new homes, renovating existing ones, and reducing homelessness. Despite these substantial efforts, CMHC believes more needs to be done to meet the housing demand. The agency asserts that an additional 3.5 million housing starts are required above current plans.


To bolster housing supply, one promising avenue is the conversion of vacant office buildings into rental apartments. The rise of remote work and virtual offices during the pandemic has resulted in elevated office vacancy rates throughout the country. The Canadian Urban Institute conducted research into this approach and found that while challenging, office-to-housing conversions can introduce new revenue models, expedite development timelines, and contribute to the revitalization of downtown areas. Their study estimated the potential for 18,000 to 22,000 new housing units through conversions in the cities studied.


Jennifer Barrett, Managing Director at the Canadian Urban Institute, highlighted that there is roughly two million square feet of empty office space in Ottawa, which has a 12 percent office vacancy rate. She stressed that the city doesn't have an office space crisis but a housing crisis.


Ottawa's collection of brutalist and post-war buildings, constructed mainly with concrete and cement, offer an excellent starting point for such conversions. With downtowns initially designed for office workers, the current shift in work patterns presents an opportunity to transform these areas into 24-hour neighborhoods.


The process has already commenced, with some of these buildings in downtown Ottawa recently converted into housing. The conversion of office space into housing typically proceeds more swiftly, especially when compared to demolishing and reconstructing new buildings, which could expedite housing supply to the market.


This transition towards housing conversions can potentially benefit low-income Canadians, who often struggle to find affordable housing. Advocacy group ACORN, armed with over 400 tenant testimonies, recently marched to the CMHC's office in Ottawa to demand more affordable housing options. Many of their members have faced eviction as landlords renovate units, while others have endured living conditions with issues like cockroaches, mold, and water damage.


Amanda Teske, a local Ottawa ACORN chair, stressed the importance of providing affordable housing that allows people to afford where they live, rather than being driven out due to escalating costs. According to rentseeker.ca, the cost of a one-bedroom apartment in Ottawa has surged from $1,378 a month in 2019 to $1,700 a month in 2023, underscoring the pressing need for comprehensive housing solutions.


As the housing crisis continues to deepen across Canada, the collaboration between governments, the private sector, and advocacy groups is essential to find innovative and effective ways to address the urgent need for affordable housing.


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