Human Resources Committee on May 12th, 2022

[Daniel Rubinstein]

Thanks very much.

Yes, we did propose ahead of the budget a longer-term time frame for the rapid housing initiative. I really welcome the additional funding in the budget. I think we're still hopeful that this kind of program will be on a longer-term track that allows our members to find the investments in permanent supportive housing and other homelessness interventions over a five- or six-year period. That's certainly the most effective way to go.

We also see a tremendous amount of value in this program. It's an additional funding element in the national housing strategy. Ideally, our members can fund their interventions on homelessness through RHI. They can fund greater affordability through co-investment if they have access to that, right, and through the rental construction financing initiative can see market rental through that program. Then, through HAF, they can tackle other areas of supply, as I talked about before, and then stack them together and have a suite of programs that work.

If you don't mind, regarding the previous question from Mr. Collins on delivery, this is the essence of why we're recommending using the major city stream for those cities with the greatest capacity. Provide those cities with up-front predictability. Let them look at an investment plan. CMHC can review that. Then, let them flow that money quickly to their non-profit partners and their own delivery agencies to make decisions on where to invest in land, where to put in an incentive program, where to put in capital dollars and where to improve their planning processes. We know what needs to be done and we can move quickly, and that's a mechanism that we know works quite well.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

We have Mr. Morrice for two minutes.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, Chair.

I also thank Mr. Trudel.

Thank you to all of the witnesses.

With the limited time I have, Mr. Rubinstein, you specifically mentioned a huge challenge in my community with respect to multi-bedroom and multi-unit options for families in particular. This is about not only the supply of housing but also the kind of housing that's getting built.

Could you share more about your specific recommendations for the housing accelerator fund? Perhaps if it were designed in a way that would lead not only to what we have being built, which is a lot of one-bedroom condos that are fairly high-end, but also to deeply affordable two- and three-bedroom units for families as well over the long term....

[Daniel Rubinstein]

It's a great question. I might approach it philosophically to start.

I think we need all levels of government to agree on the kind of housing we're trying to produce. I think we've heard today that one of the primary gaps is, in the market side, where do we create the appropriate family-sized units? I know it's in the reporting that CMHC has had recently, too, so it's not just our view. I think that's widely held.

Then the question is, how do you solve for that? I think HAF has the ability, one, if the policy objective is clear about the kind of housing we're creating—and not just supply but the targeted supply—and, two, there's an ability, and I think cities are experimenters, right? We experiment with partnering to achieve certain objectives.

Cities have the predictability up front to say, “Here's a pot of money and what's the bang for the buck?” If there's a lack of appropriately sized market rentals and family-sized rentals are one of them, let cities experiment with solutions to that. That could be creating incentive programs to help address some of that cost differential. It could be pitching at land; it could be a range of things.

Thanks.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Rubinstein. We're over time.

Madam Zarrillo, you have two and a half minutes.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you, Mr. Chair.

I am going to go back to Mr. Hahn. I said I would ask some questions about expiring operating agreements, and operating agreements in general, but I wanted to add a question for Mr. Hahn, if you wouldn't mind.

I'm getting a sense there is some thought that federal land will be available for sale for private development that partners with not-for-profits. I want to understand from Mr. Hahn how selling that land would impact operating agreements, and the length of operating agreements, with private partners in the not-for-profit community.

[Brian Hahn]

To be clear, our members aren't typically social housing members, so by “operating agreements”, I take it your context is one where developers would pay for operating agreements on lands that would be developed. I hope I'm gathering that correctly.

Generally speaking, our membership believes that municipal taxes should cover the cost of development operations. Only in the rarest of circumstances would we endorse adding operating costs to the cost of development. In the long run, developments need to go around on the capital cost and tax collections that would come from new housing and new development to offset municipal operating costs.

Much like what has been talked about with regard to improving processes around development approvals and the automation of those processes, there also needs to be an incentive for efficiency in all aspects of that. In the context of our Calgary members, developers install significant assets on their own, then pay for the capacity of off-site assets. Essentially, the municipality gets the new capital for free and inherits a whole bunch of taxpaying and municipal utility rate-paying customers. All of that needs to be taken into account, particularly the fact that new assets are lower-cost assets to operate. From our perspective, we're not as keen about an operating agreement after development.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

That's interesting, Mr. Hahn, because some of those assets—

[The Chair, Liberal, Bobby Morrissey]

Madam Zarrillo, you have 20 very short seconds.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Can I ask Mr. Reisman to answer the question about the underwriting of risk by municipalities, when there are no pre-sales involved?

[The Chair, Liberal, Bobby Morrissey]

Yes.

Please give us a short answer.

[Sam Reisman]

They're putting up development charge money. It's registered against the property that received the money by way of tax, under any circumstances, but after the period of time of affordability—10 or 20 years.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Who takes the risk?

[Sam Reisman]

You'd have to have an apartment building fail, and I don't know when that last happened in Canada.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Madam Zarrillo and Mr. Reisman.

Madame Kusie, you have five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Mr. Chair.

Mr. Hahn, thank you very much for joining us. I'm so very sorry I missed the BILD dinner last week. I always enjoy it, and I always appreciate the way we recognize the great Calgarians who are building our city. Thank you very much for that.

Mr. Hahn, in your opinion, how does the Calgary market supply compare with that of other major centres?

[Brian Hahn]

The evidence about the Calgary market supply is somewhat reflected in my opening statement. Our market-based pricing is competitive with pretty much any major metropolitan area in Canada.

However, that's going in the wrong direction. Prices are going up for an assortment of reasons, but supply is one of them. While we enjoy this competitive position right now, it's important that supply keeps moving forward and investment in the hard assets I referred to, which unlock supply, continues.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

What are the most significant things Calgary City Council, for example, could do to help our industry increase supply?

[Brian Hahn]

To be clear, Calgary City Council has done a number of positive things. We've heard about the automation of processes. Certainly, throughout the pandemic, we've seen the automation of processes in Calgary: the ability to submit development applications remotely, and remote inspections, for that matter, which are done by telephone. All of that has been positive.

I think it's important for Calgary City Council—which is in a new community business case process as we speak—to look very seriously at the supply issue, and by that I mean the fully serviced lot supply issue, to ensure there's an adequate supply of fully serviced lots to build, going forward. That will be key to ensuring we don't run short of supply and that there is a wide array of developers who have approved land supply to develop upon, so you have the diversity of developers and builders required to meet market demand.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

In the implementation of the Government of Canada's housing plan, I recall a few announcements over the last seven years for which we would have certain ministers come to the city and make announcements with municipal officials in regard to certain developments or housing developments or pieces of housing being handed over to the government or sold to the government relatively inexpensively for the housing plan itself. Why do you think these dwellings were made available and what impact do you think they have on the Calgary housing market?

[Brian Hahn]

Well, I'm not sure specifically which ones you're referring to, but I'm going to make a leap of faith that they were handed over in terms of what I think we refer to as the affordable housing end of the spectrum here. I can't quarrel that affordable housing is an issue that needs to be dealt with. Certainly we want people to have the dignity and security of a roof over their head at a price they can afford.

But I will say for sure that if the only issue that the housing accelerator fund goes to tackle is affordable housing and not the market-price housing affordability that Mr. Lee and others have talked about, we will find ourselves at whatever point in time in the future facing an even more daunting task in terms of market-price housing affordability and we will have inadvertently driven a number of folks who would otherwise have been in the market-price housing into the affordable housing market. We need to make sure that the full continuum of housing is addressed by this funding and that we cover the wingspan of that and ensure that middle-class families have access to market-price housing affordability.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

A significant problem for many years in Calgary was the release of land. Does this continue to be an issue for development?

[Brian Hahn]

I would say that if we don't see reasonable approvals of business cases before city council in the current intake that's there, we will very shortly be into a supply crunch.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Mr. Hahn.

Thank you, Chair.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Madame Kusie.

Now we go to Madame Martinez Ferrada to conclude with five minutes.