Proposed Actions to Spur Housing and Apartment Building Construction Are a Good Start
- Carla Louisse
- Sep 28, 2023
- 3 min read
In recent years, Canada has been grappling with a pressing issue: a shortage of affordable housing. This crisis has left many Canadians struggling to find suitable places to live, and governments at both the federal and provincial levels have been under pressure to take action. Recently, there have been proposed actions aimed at spurring housing and apartment building construction, and while they may not be a panacea, they are undoubtedly a step in the right direction.
One significant development in this regard was announced by the Liberal government in September 2023. They revealed plans to remove the Goods and Services Tax (GST) from the construction of new rental apartments as a means to incentivize developers to build more rental units. This move has been met with widespread approval as it addresses one of the critical barriers to construction – cost. By reducing the tax burden on developers, the government hopes to encourage more investment in rental housing, which is sorely needed in many Canadian cities, including Toronto and Vancouver.
Another driving force behind the push for increased housing and apartment building construction is the recognition of the critical need for more rental units. The demand for rental housing has been steadily rising, driven by factors such as population growth, urbanization, and changing housing preferences. In many urban centers, vacancy rates have reached historic lows, driving up rental prices and leaving many Canadians struggling to find affordable places to live. This situation has become particularly acute for young people and low-income households.
The proposal to spur construction aligns with the need to alleviate this rental housing shortage. By making it financially more attractive for developers to build rental apartments, it is expected that more units will become available, helping to balance supply and demand in the rental market. This not only benefits tenants by providing more options and potentially stabilizing rents but also creates economic opportunities in the construction sector.
However, it's important to note that the challenges in the housing and apartment building construction industry go beyond taxation. Various factors have contributed to the difficulties in building housing in Canada. These challenges include regulatory hurdles, zoning restrictions, and the high cost of land. In Toronto, for example, limited available land and strict zoning regulations have driven up land prices, making it more challenging for developers to embark on new projects.
To truly address the housing crisis, it will require a multifaceted approach. While the removal of the GST on rental apartment construction is a positive step, it must be complemented by other measures to tackle issues like zoning reform and the availability of affordable land for development. Additionally, investments in infrastructure and transportation to support new housing developments are essential to ensure that new units are well-connected to job centers and amenities.
In conclusion, the proposed actions to spur housing and apartment building construction in Canada are a promising start in addressing the housing crisis. Removing the GST on rental apartment construction is a significant move that can help make building rental units more economically viable for developers. However, it is essential to recognize that this is just one piece of the puzzle. To truly address the housing shortage, a comprehensive approach that considers regulatory reform, land availability, and infrastructure investments is necessary. The road ahead may be challenging, but these proposed actions are a step in the right direction to provide Canadians with the housing they need and deserve.
Reference:
Comments