Canada’s Prime Minister, Justin Trudeau, launched the Housing Accelerator Fund (HAF), a $4 billion initiative, in March 2023. The fund seeks to provide aid for local governments to fast track the creation of 100,000 new homes across Canada. What might that mean for your city? Let’s look at how it may help the housing shortage Canadians have been grappling for the past few years.

How does HAF help cities accelerate housing construction?

Prime Minister Justin Trudeau and his Liberal government announced the design of a program that aims to help the housing shortage. How? By building more homes in Canada. He, along with Housing Minister, Ahmed Hussen, introduced the $4 billion Housing Accelerator Fund on March 17, 2023. In a news release, it states funding will help cities, towns and Indigenous communities unlock new housing supply by speeding up development and approvals.

Guelph Mayor, Cam Guthrie, is perhaps the biggest voice on the housing crisis. It is facing not only Guelph, but other towns and cities in Ontario. “Leaders have been pleading for true partnerships with upper levels of government on the housing crisis,” says Guthrie. “This announcement is phenomenal.”

According to a news release from the Prime Minister’s office, the fund will help increase supply of homes by:

  • Speeding up development and approvals, like fixing out-of-date permitting systems
  • Introducing zoning reforms to build more density
  • Incentivizing development close to public transit

The Government of Canada aims to double the rate of housing construction over the next decade. While annual construction has increased in recent years, it is not enough to address affordability challenges to keep up with the housing demands of a growing population.

The Housing Accelerator Fund election promise

In their election platform, Liberals describe the goal of the fund. It is a fast track on the creation of 100,000 new homes and units across Canada. The Liberals also state, “Overly complex, backlogged, and under-resourced municipal zoning and permitting systems are slowing the pace of building much-needed homes.” On his official website, Prime Minister Trudeau states that Canada has the fastest growing population in the G7. Sadly, the housing supply isn’t keeping up with demand. “The Housing Accelerator Fund will help local governments cut red tape and backlogs, build the housing we need, and give more people in Canada a safe and affordable place to call home. We will continue to work to make life more affordable and create stronger, more prosperous communities from coast to coast to coast.”

Key points of the Housing Accelerator Fund plan

There are several factors making housing more expensive, but the biggest issue is supply. Put simply, Canada needs to build more homes. Increasing housing supply will help make housing more affordable for everyone. This Accelerated Housing Construction Fund is available to municipalities that are willing to:

  • Bring forward innovative solutions
  • Remove barriers to housing supply
  • Accelerate the growth of supply
  • Support the development of complete, low-carbon and climate-resilient communities that are affordable, inclusive, equitable and diverse

Each year, Canada constructs about 200,000 new housing units—standalone houses, individual condos, and other types of homes alike.

Eligibility for the fund

The HAF will not only provide upfront funding to support implementation, but will also offer additional funds upon delivering results. In order to be eligible, municipalities must:

  • Develop an action plan as part of their HAF application. The purpose of the action plan is to outline supply growth targets and specific initiatives to grow housing supply and speed up housing approvals.
  • Commit to a housing supply growth target within the action plan that increases the average annual rate of growth by at least 10%. The annual growth rate must also exceed 1.1% (the national average).
  • Complete or update a housing needs assessment report. This requirement may be waived if the applicant recently completed or updated a housing needs assessment.

Local governments are now invited to develop innovative action plans, in line with the flexible criteria, to remove barriers to building more homes, faster. The application portal for the Housing Accelerator Fund (HAF) will open in June 2023.

However, it is not clear that the Fund is meant to assist in speeding up the approval of market rental homes, just as much as it is meant to speed up the approval of single-family homes and condominiums.

A home for everyone

The Government of Canada has a plan in place to build more homes and increase supply with programs like the Housing Accelerator Fund. Its goal is to help Canadians save for a down payment for their first home, and to fight speculation. The Liberals claim to be able to put Canada on a path to double its housing construction over the next decade and make it affordable for people of all income brackets. If you have questions about home or rental insurance, our isure brokers can help you find the best rates for your coverage needs.

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