This week, the Canada Mortgage and Housing Corporation (CMHC) released its data for the month of June. What portrait can we draw from this for the first half of the year?
For the first half (January-June) of 2023 compared to that of 2022, what strikes first is a dramatic drop in housing starts that has been observed, i.e. 44% for Quebec and 58% for the metropolitan region (CMA) of Montreal.
Note that these declines follow those recorded in 2022, i.e. 16% for Quebec and 25% for Montreal.
Thus, according to the data compiled, the number of housing starts in the Montréal CMA in 2023 could be at its lowest level in 25 years.
Accelerate construction starts
We are therefore dangerously far from the levels of housing production prescribed by recent studies such as Housing shortage in Canada CMHC, Rental housing in Quebec of the Corporation of Quebec Real Estate Owners and Building more, faster and better. For an intelligent densification strategy for Greater Montreal of the Board of Trade of Metropolitan Montreal.
The affordable Chantier Montréal also agrees that we must “build more and faster”.
During its Great Conversation focusing on housing, held last May, Centraide of Greater Montreal pointed out that to close the gap that separates the greater Montreal area from the OECD average for the proportion of subsidized housing, it would be necessary to multiply by 3.6 the rate observed since 1995.
The Board of Trade estimates that 23,100 housing units should be started per year between now and 2041 to restore a certain balance within the Montreal Metropolitan Community. It is very likely that we will achieve less than 50% of this target this year.
Take inspiration from Corvée-Habitation
In 1982, faced with the rise in interest rates, the deep recession and the housing crisis that prevailed at the time, the Government of Quebec, a few weeks after the holding of a socio-economic summit and despite public finances under great pressure, implemented a bold program to promote housing construction.
This program was named “Corvée-Habitation” and required the collaboration of multiple partners. He counted on cyclical help to lessen the shock of the rise in interest rates. It was effective in reviving residential and short-term construction.
Still, there are similarities to the current housing crisis and lessons to be learned.
Following the example of what happened in 1982, the government of Quebec should convene all the partners concerned as quickly as possible to jointly define an action plan to meet the current challenges.
Substantial budgets must be allocated to it. Acceleration mechanisms must be put in place. Structural actions must be deployed. Short-term actions must also be taken to offset the rise in interest rates and inflation; especially since in its Monetary Policy Report unveiled on July 12, the Bank of Canada predicts that inflation will return to 2%, its target, only around the middle of 2025, which does not suggest significant interest rate cuts by then.
For Montreal, the rapid implementation of the revitalization of major sites, such as East Montreal, Bridge-Bonaventure, the Hippodrome, Lachine East and Louvain East, represents unique and exceptional opportunities to be seized quickly, to face not only the housing crisis, but also that of climate change.
The governments of Quebec and Canada must make financial contributions to support the revitalization of these major sites, particularly for soil decontamination, the development of resilient infrastructure, the protection of heritage and the development of public transit.
For its part, the City of Montreal must streamline its processes in order to accelerate these developments. The recent establishment of the facilitation unit and the deployment of structuring actions to optimize the progress of real estate projects bode well, as well as the recent establishment of a working group for the development of the racetrack and the adoption of the Specific Urban Planning Program for the Lachine-Est eco-district sector.
Initiate the exit from the crisis
Like the cities of Gatineau and Rimouski, which recently introduced innovative and bold programs to facilitate housing construction, notably by offering significant property tax credits, when will the implementation in Montreal of such programs for the construction of sustainable residential buildings or the conversion of buildings for residential purposes?
Also, the Chantier Montréal Affordable Advisory Committee must quickly follow up on its joint statement, ideally before the Quebec government tables the Housing Action Plan, in order to be able to influence it or be ready if the government agrees to this idea of convening all the partners.
The acuteness of the crisis calls for immediate and vigorous action. The Chantier Montréal Affordable rightly points out that “the future of affordable housing in Montréal is being played out before our very eyes. Let’s act now”.