From what promoters tell us on the ground, borrowing costs are really the main factor putting a brake on most pending projects. The problem with CMHC's currently available programs is that they lack predictability. It takes months to get a response. We all know it's all about the delays. Time is money for the promoters; not knowing whether they'll have access to the programs prevents them from closing their financial packages. Requirements are also too restrictive. So more flexible arrangements are needed to help the promoters.
Earlier I said that the banks should play a greater social role. We know that financial institutions currently lend approximately up to 70% of the total costs of rental projects. It would be false to say that they're risky projects in the present circumstances. Couldn't financial institutions lend a larger percentage of project values?
We also know that interest rates influence discount rates, which also restricts promoters' borrowing power. Once again, this has a major effect. You can't expect private projects to go ahead when the numbers don't add up. That's often what you hear on the ground from that promoters we cooperate with in our cities.