I'm ready to go.
Thank you very much for including me in today's meeting.
My name is Carmen Wyton and I'm the CEO of BILD Alberta, which is the Building Industry and Land Development Association of Alberta. BILD Alberta represents more than 1,800 member companies involved in residential construction, land development, renovations, trades, consulting and material supply.
I'm here to discuss housing affordability in Alberta, the implications of the national housing strategy and federal policies that are impacting jobs, the economy and the environment. The industry I represent is mostly small to medium-sized privately held businesses that employ more than 120,000 Albertans, provide $8.3 billion in wages and contribute $18.6 billion in economic activity.
These are Canadian employers whose livelihoods are being put at risk by policies created to address issues that are not relevant in Alberta.
Alberta's residential construction industry is in crisis. The majority of our members have reported layoffs of more than 20% of their staff and have significantly reduced work orders, while some have simply gone out of business.
There are three conditions that have resulted in a significant contraction of business, job loss and economic uncertainty. These are the 2017-18 mortgage rule changes, a historic oversupply of new housing inventory and building codes changes, especially related to energy efficiency.
With respect to mortgage rules, housing in Alberta's major cities is not the same as it is in Vancouver and Toronto. We are facing a historic high rate of unabsorbed housing. Since the introduction of those mortgage rules, the number of newly built but vacant homes has increased by 44%. The majority of these homes are single-family, semi-detached and row houses designed for young families, first-time homebuyers and those looking to moderately move up in the market.
We also know that 70% of Alberta households can comfortably afford homes priced at $300,000. Unlike Toronto and Vancouver, there are many desirable housing options in Alberta's major cities within that price range, but new mortgage rules are preventing working Albertans from qualifying. As a result, Alberta has a record high of 5,400 newly built unsold homes and a year-to-date decline in housing starts already reporting at 22% lower than in 2017.
If people don't buy, builders don't build and Albertans won't work.
As you consider housing for all Canadians, we ask that you bring back the 30-year mortgage, implement incentives for first-time homebuyers and facilitate regional variances in mortgage rules that will allow provincial financial institutions to provide for their local markets.
With respect to building codes, maintaining housing affordability is a central focus for BILD Alberta. We have concerns with the speed with which substantial shifts in building codes relative to energy efficiency are occurring. Alberta builders are already leaders in energy efficiency and have been providing innovative options that consumers want, and more importantly, that they can afford. The challenge with the current trajectory for energy efficiency and net zero by 2030 is the pace and uncertainty of associated costs.
It is essential that a thorough cost-impact analysis is undertaken and variables associated with climate conditions across Canada are considered to avoid costly unintended consequences to home owners. We calculated that every $10,000 increase to a home removes 20,000 Alberta households from entry-level housing. A net zero ready home in Edmonton will be tens of thousands more and in northern Alberta it will be still more.
BILD Alberta fully supports a path to net zero homes. However, before moving forward with drastic shifts in energy efficiency, we need to take a prudent approach to determine cost impacts, implications on building science and consumer interests. Industry and government need to innovate together to find more cost-effective means to reach such levels of efficiency before they can be regulated.
Albertans simply cannot afford to go to such extremes without proof that there is market capacity, technical capabilities and consumer willingness to adapt.
In closing, the national housing strategy is largely focused on social and subsidized housing without consideration for the consequences of other federal policies, such as mortgage rules and building codes. Federal policies must reflect conditions relevant to all of Canada's largest cities and support housing for all Albertans and all Canadians.