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John’s doctor just told him that he has high blood pressure, is seriously overweight and is on the verge of becoming a diabetic. This was not his first warning.

In response, John finally decided to do something. He promised to stop smoking. He promised to cut out junk food. He promised to eat more vegetables. And he drew up an exercise program, with a schedule of workouts mapped out to 2030.

He also proudly announced that, as a result of these changes, he’ll be winning the gold medal in the marathon at the 2028 Olympics.

That’s how I see the Trudeau government’s housing plan, which was released piece by piece in advance of Tuesday’s federal budget. It’s ambitious. It’s aiming in the right direction. It’s needed. And in the long run, it is going to encourage more building in the right places. All of which is good.

However, the Liberals are also overselling how much it can do, and how quickly.

Prime Minister Justin Trudeau’s April 12 news release says that, thanks in part to the housing plan’s incentives, Canada will build 3.87 million new homes by 2031. That’s almost 500,000 homes a year.

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Since 2010, Canada has averaged about 215,000 annual housing starts, according to the Canada Mortgage and Housing Corp. In 2021, there were 271,000 starts, the highest level in nearly half a century. The numbers fell slightly in 2022 and again in 2023, as a function of higher interest rates and rising costs. CMHC expects 224,000 starts this year, and 232,000 in 2025 and 2026.

All of which means that the Trudeau government is claiming its prebudget housing announcements will double housing construction.

Or perhaps more than double. Ramping up new construction takes time, so if we assume that the CMHC’s forecast holds until 2026, then hitting the target of 3.87 million new homes would necessitate more than 600,000 annual housing starts in the late 2020s. That’s almost a tripling of the pace of building.

If this promise were a real estate listing, it would be described as “adjacent to impossible.” Housing starts are already near their cyclical peak, and housing employment is at its historical peak.

Federal budget will include $15-billion boost to apartment construction loan program

To give the federal government its due, the housing plan is being cheered by progressive urban planners, and with reason. And in the two jurisdictions with the most extreme housing unaffordability, local authorities are a step ahead of Ottawa. In British Columbia and Toronto, federal demands for greater density near transit, and fourplexes by right in all neighbourhoods, is pushing against an open door.

Building more housing where housing is most needed – established communities rather than greenfields – is already becoming easier, thanks to loosening zoning from Vancouver to Edmonton to Toronto. The federal plan will add to the momentum. Plus new federal incentives to build more rentals and low-income housing will get more of those types of housing built, too.

Liberal plan to build 3.87 million homes by 2031 includes new pledge to stem real estate fraud

But homes can’t be built as quickly as promises.

Consider the Apartment Construction Loan Program. Launched back in 2017, the feds have now added another $15-billion to its pot, bringing the potential portfolio of loans to developers to $55-billion.

The aim is to finance 131,000 new apartments by 2031. That’s a tiny fraction of the national housing shortfall, and the program appears to be well behind schedule. Seven years ago, its goal was 71,000 new rental units. The most recent progress report says only 11,208 have been completed.

In any case, the promise of 3.87 million new homes – which the government breaks down as 1.87 million “being built anyway” per CMHC estimates, 1.2 million owing to “federal actions in this plan,” and calling on provinces and cities “to build at least 800,000 more” – may significantly underestimate how much construction is needed.

The Parliamentary Budget Officer released a study last week whose analysis of the housing shortfall is roughly in line with the federal plan.

But a frequently cited 2022 study from CMHC found that achieving “levels of affordability last seen in 2004″ would mean building around five million new homes by 2030. The agency revised its analysis last year, and concluded the number could be as high as six million.

When CIBC economist Benjamin Tal updated the CMHC estimate earlier this year, to account for recent unprecedented population growth because of immigration, he pegged the shortfall at closer to seven million homes.

If that’s true, then getting to housing affordability doesn’t just mean a doubling of the pace of home building. It would take a quadrupling.

The Trudeau government’s sudden burst of furious housing announcements – plus the suggestion that the resistance of some provinces is all that stands between Canada and sweet affordability – may deliver political dividends in the run-up to a 2025 election.

However, the overnight erection of a glittering skyline of new housing policies comes after the government spent years ignoring the growing stresses caused by its immigration choices. That’s partly what got us here.

The Liberals are now saying a lot of the right things on both housing and immigration. It’s a start. But to quote a handwritten note from the PM’s chief of staff, Katie Telford, which was entered into evidence last week at the foreign interference inquiry: “Bragging is not doing.”

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