Thank you, Mr. Chair.
Good morning, everyone.
I thank the members of the committee for inviting me to testify.
Bâtir son quartier is a social economy enterprise and a non-profit organization whose mission is to meet the housing needs of low and moderate income households through the construction of community housing. To date, we have completed 450 projects totalling 14,000 housing units.
The current context is a great source of concern. The last 20 years have been good for housing, due to low inflation and low interest rates. Despite this, there are currently more than 1.8 million Canadian renter households paying more than 30% of their income for housing, including nearly half a million in Quebec. We have entered a less favourable period that could last. This is therefore a great source of concern for the poorest in society, who are already struggling to find adequate housing and food.
Concretely, in the Montreal metropolitan community, we are talking about a 4.2% increase in rents, which is the highest increase since 2003. The vacancy rate for affordable housing and family housing is barely 1%, whereas the normal break-even rate is 3%. This is compounded by rising construction costs due to supply difficulties, high market activity and labour shortages.
In our projects in 2019, the average construction price was about $180 per square foot. Now, in 2022, it is over $270 per square foot. This means that for a two-bedroom unit, it costs just over $100,000 to build the same unit.
In addition, there is the increase in financing costs due to rising interest rates. For example, for a 1% increase in the interest rate, although there are many nuances in life, you will still have to increase the rent on a unit by $52 per month to not run a deficit, not to mention the increase in heating and insurance costs and other housing-related expenses.
There are therefore consequences for the development of real estate projects, but also for the organizations managing low-rent buildings. In Quebec, the mismatch between rising costs and government funding is paralyzing the delivery of 10,000 housing units, nearly half of which are in Montreal. We sincerely believe that low and modest income households are bearing the brunt of rising costs.
The national housing strategy is an achievement that we can count on, but the investments that flow from it require adjustments to allow us to act adequately and protect the most vulnerable households from a rising cost of living. It would be desirable to reallocate funds to target these households and adapt the design of some existing programs.
We believe that housing production must be accelerated and increased. We want a major housing project, and we believe that cohousing can play an important role as a bulwark against the precariousness of Canadian households by intervening in a sustainable manner.
Thank you for your attention.