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Ottawa has announced a spate of new housing initiatives ahead of the federal budget to address the housing crisis in Canada.Sean Kilpatrick/The Canadian Press

The federal government has set its sights on addressing housing affordability in its 2024 federal budget. Prime Minister Justin Trudeau and his cabinet have been under pressure to deal with the housing crisis, which has largely been driven by supply and demand, immigration, rental inflation, high interest rates, labour shortages and more.

In an effort to address the issues, Ottawa has announced a spate of new housing initiatives, some of them prompting criticism from provincial governments, including Quebec and Ontario. Most of the new initiatives were announced ahead of the budget, and the federal government says they are part of a strategy to add 3.87 million new homes by 2031. Here are some highlights from the budget.

Leasing out federally owned lands to build affordable housing

Mr. Fraser has outlined plans to build affordable housing on public lands, with Ottawa entering into long-term leases over the life cycle of the buildings that will be constructed.

In the budget, the Liberals say they will build housing on “every possible piece” of federal public land, from armouries to office buildings to post offices – a budget proposal that will reverse the long-standing policy of selling surplus government real estate for profit.

This includes, according to the budget, a $1.1-billion plan over the next 10 years to reduce the amount of federal office space by half, and prioritize that land for student or non-market housing. The budget says this equates to the 50 per cent of federal office space that is either underused or entirely vacant.

Mr. Fraser drew a contrast between that strategy and Conservative Leader Pierre Poilievre’s. “It’s fundamentally a different approach. Mr. Poilievre’s plan would simply sell off thousands of parcels of potentially high-value public lands to developers, without the federal government receiving an appropriate value,” Mr. Fraser told The Globe and Mail in an interview.

30-year mortgages for first-time homebuyers purchasing new builds

The federal government announced it is easing its mortgage rules for the first time in a decade. First-time homebuyers who require mortgage insurance – those making a down payment of less than 20 per cent of the purchase price – will now be able to take out 30-year mortgages on a newly built home, up from the previous maximum of 25 years. Some in the real estate industry say the extension could boost demand for preconstruction homes and will help make mortgage payments more affordable. In the budget, the Liberals say they will monitor whether inflation and supply would allow them to broaden access to 30-year mortgages.

Multibillion-dollar fund toward housing infrastructure

Mr. Trudeau announced a fund to pay for the infrastructure – for waste water, storm water and solid waste – necessary to build new housing developments. But the government says that in order to access the money, which could amount to as much as $6-billion, provinces would have to agree to a list of conditions, including eliminating single-family zoning and allowing fourplexes by default.

Several provinces, including Ontario and Quebec, have rejected the conditions. But Housing Minister Sean Fraser said the government is prepared to bypass the provinces and deal directly with municipalities to push the infrastructure development through. Ottawa is giving provinces until Jan. 1, 2025, to secure a deal; for the territories, the deadline is next April 1.

A new fund to protect existing apartment buildings

The $1.5-billion Canada Rental Protection Fund is designed to save existing apartment buildings from being sold and converted into higher-priced units. As high home costs have driven more prospective buyers to renting, prices in the rental market have gone up across the country. Many Canadians are struggling to keep up with those rising rents, and a demand for more affordable rental units has continued to grow.

The federal government said the new fund will provide $1-billion in loans and $470-million in contributions to non-profit groups and other partners so they can acquire rental units and preserve the rents in the long term. The upcoming fund will be similar to a rental protection fund recently launched in B.C., which has seen overwhelming demand.

Funding for a housing design catalogue to fast-track new home builds

Back in December, Ottawa announced it was going to revive an old technique to ramp up housing construction: a catalogue of pre-approved home designs. The old catalogue was implemented after the Second World War, when homes were badly needed.

On April 5, the government said it was pledging $11.6-million to produce the catalogue, which will standardize as many as 50 home blueprints and will include frames for modular homes, row houses and fourplexes.

Ottawa hopes the catalogue will help simplify the construction process and make it easier for builders to get approvals for new homes.

Boost to the apartment construction loan program

The existing Apartment Construction Loan Program (ACLP) offers loans to developers who reserve at least 20 per cent of a rental project’s units for affordable housing. The federal government announced it will be adding $15-billion to the loan program and offering developers more “flexibility” on what constitutes an affordable build, as well as energy efficiency and accessibility rules.

In his April 3 announcement, Mr. Trudeau said the changes are intended to fast-track new apartment construction projects, with the extra funding helping to build at least 30,000 additional units through the ACLP. The loan program will now total $55-billion and aims to build 131,000 rental units by 2031-32.

A $100-million incentive for new homebuilding technology

The government announced a $100-million fund designed to push the construction industry toward implementing new methods and materials to build homes, such as modular and prefabricated housing units.

Half of the money will go to the new Homebuilding Technology and Innovation Fund – which will support new projects experimenting with different construction methods – and the other $50-million will help fund existing homebuilding projects that are already using those innovative methods.

The government said $500-million from the ACLP will also be going toward supporting new rental projects that use prefabricated and modular building techniques.

With files from Rachelle Younglai, Ian Bailey, Laura Stone, Oliver Moore, Erin Anderssen, Jeff Gray and Kelly Cryderman

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