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The federal government’s $4 billion national Housing Accelerator Fund (HAF) is “just a drop in the bucket” say stakeholders who agree much more needs to be done.

The City of Toronto, which received promises of $471 million over the next three years if certain deadlines and milestones are met, agrees, noting it will still need to raise $800 million a year to meet its goal of 65,000 affordable rental units.

And that’s just to meet the current backlog of demand. The Canada Mortgage and Housing Corporation says the federal government’s plan for 3.8 million homes by the end of the decade would only be treading water and that up to six million are required.

RBC warned a year ago that despite purpose-built rental housing stock growing at its fastest pace since 2014, vacancy rates fell to a two-decade low as high levels of immigration and higher costs pushed demand and by extension rents.

It says Toronto and Montreal have not built housing fast enough and there’s no end in sight as eight per cent more immigrants are targeted to come to Canada and needing housing though 2026.

If the HAF doesn’t boost the rental stock significantly, RBC says, Canada’s rental housing gap could be greater than 120,000 in two years adding to the backlog.

Infrastructure has also been the missing part of the overall discussion, he adds, something echoed by the Federation of Canadian Municipalities in a recent campaign, noting there’s no housing development without the basics of sewer, water, power and roads.

That in turn has prompted the federal government to announce more funding for infrastructure and other incentives to build more.

To catch up CMHC says up to six million new homes are needed in addition to the current level of housing starts and insurance company Desjardin agrees.

It’s a dichotomy those in the construction industry know all too well.

While the federal government’s lead ministers are frantically crossing Canada to announce millions of dollars to municipalities who agree to tailor their development strategy to ensure the government’s goals of more housing starts sooner are met, the key issue of uncontrolled immigration swamping demand for homes, education and health care remains unresolved, says Richard Lyall, president of the Residential Construction Council of Ontario.

“The $4 billion for Toronto is a drop in the bucket, though it is partly useful in demonstrating a call for real action on the supply of housing and modernizing approval systems,” he states. “This is where we’re really behind other jurisdictions.”

They key issues remain around the cumbersome nature of approvals in Canada, he says.

The increases in taxes and levies over the last 20 years is partly to blame on locking people out of the housing market. They struggle to save and even if they raise, say $200,000 he says, that’s eaten up by the escalating cost of housing and the increasing taxes and levies.

He notes U.S. housing construction is picking up as our neighbours experience robust economic growth but that hasn’t translated into higher rents.

In Ontario, he says, especially urban centres, “too many people don’t realize how big and serious these numbers are,” Lyall says. “We can’t build for the middle class.”

Meanwhile, Tridel president Jim Ritchie says the company will stick to its longer term strategy regardless of the federal money and continue to develop and build projects that are several years deep in the pipeline. However, with the city planning to act as a developer and lead construction at five sites, he says, Tridel remains open to P3 and collaborative partnerships and opportunities through its Deltera subsidiary, a construction management company.

Brian Teefy, vice-president at StrategyCorp’s Public Affairs practice, which has been working with private, non-profit and government sectors on issues related to land development, affordable housing, clean energy, procurement and community safety agrees with Lyall in that the HAF won’t have an immediate impact and that much more needs to be done.

“It’s a start, though,” he says.

The city is also ambitious beyond the 11,780 units funded by the $471 million from the federal government’s program, planning 52 locations it owns and says are ready for housing development of up to 17,500 rent-controlled homes. Further, it’s identified another 40 sites that could be earmarked for future development.

The issue is money. The HAF monies will be dispensed over three years as the city hits milestones and deadlines imposed by the agreement.

The city also plans to act as a developer and lead construction at five sites on Sherbourne Street, Queens Wharf Road, Dundas Street, Brock Avenue and Bellevue Avenue which opens up opportunities for construction managers like Deltera.

The risk developers like Tridel are watching is around a sudden uptick in demand for skilled labour and materials if market-priced housing, especially condos, comes roaring back to peak as interest rates fall just as the public housing projects pick up and add to that demand.

As it stands, Ritchie thinks the two streams will balance themselves out but there’s always the risk of external upheaval impacting local markets.