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Government takes steps towards accelerating student housing development

The government has announced further initiatives aimed at expediting the construction of additional housing units, particularly focusing on student housing. This objective will be realized through the provision of low-cost loans, aimed at fostering the development of student housing both on and off-campus. The Apartment Construction Loan Program will be reformed to help more students find affordable housing, thereby contributing to a more accessible living environment near their educational institutions. This comprehensive plan is designed not only to meet the housing needs of students but also to enhance the availability of residences for families residing in these communities throughout the year. The Apartment Construction Loan Program, previously recognized as the Rental Construction Financing Initiative, is valued at over $40 billion. It is offering affordable financing to facilitate the construction of over 101,000 new rental residences throughout Canada by the fiscal year 2031-32.

Modifications to the Apartment Construction Loan Program will empower post-secondary institutions to secure cost-effective loans dedicated to the construction of student housing. The application process is slated to commence in 2024. The government’s dedication to supporting student housing construction is an integral component of its broader economic strategy, which seeks to address housing affordability. The 2023 Fall Economic Statement not only reaffirmed the commitment to these reforms but also allocated an additional $15 billion in low-cost loans for the Apartment Construction Loan Program, coupled with an extra $1 billion in new funding for the Affordable Housing Fund. Furthermore, Canada’s economic blueprint encompasses a $10.7 billion allocation for housing initiatives benefiting First Nations on reserve, Inuit, Métis, and First Nations Self-Governing and Modern Treaty communities. This commitment extends to the implementation of the “for Indigenous, by Indigenous” Urban, Rural, and Northern Indigenous Housing Strategy.

Discussing the government’s multifaceted approach, The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, articulated, “As part of our economic plan, today we are announcing more action to help tackle housing challenges and make housing more affordable for all Canadians by increasing supply on- and off-campus—particularly helping students and younger Canadians. We will continue to take action to invest in supply and more homes and housing affordability right across the country in communities large and small.”

Furthermore, the federal government is actively assisting prospective homeowners in realizing their homeownership aspirations. The Department of Finance Canada reports that over 500,000 Canadians have already opened tax-free First Home Savings Accounts, a financial instrument aimed at facilitating homeownership, especially among young Canadians. These accounts enable individuals to contribute up to $40,000 towards their initial down payment, with the advantage of tax-free contributions and withdrawals. To assess the potential savings through this mechanism, individuals can access the newly introduced tax-free First Home Savings Account calculator.

The federal government initially introduced a $4-billion accelerator program in the 2022 federal budget, although formal applications were only accepted starting in July. Leveraging the $4 billion Housing Accelerator Fund, the federal government has engaged in 31 agreements with municipalities spanning the nation, with the shared objective of streamlining processes and augmenting Canada’s housing supply. These agreements are poised to expedite the construction of over 500,000 new homes across Canada in the ensuing decade, with additional agreements currently in progress.

Source: Government of Canada