Human Resources Committee on May 19th, 2022

[The Chair (Mr. Robert Morrissey (Egmont, Lib.)), Liberal, Bobby Morrissey]

I will call the meeting to order.

I welcome you all, including new members qt the committee, to this 25th meeting of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Today's meeting, as you are aware, is taking place in a hybrid format according to rules adopted on November 25. I would expect all members attending in person to follow the pandemic protocols that are in place.

To ensure an orderly meeting, I would like to make a few comments. Today's meeting is available in both official languages. To get interpretation if you're appearing virtually, simply go to the bottom of your screen and click on the interpretation icon. I would ask each presenter to speak slowly so that the translators can properly interpret what you're saying.

If any member of the committee loses interpretation, please notify me by using the “raise hand” icon if you're appearing virtually or by raising your hand if you're in the House. I would also ask that during the meeting, all comments be addressed through the chair.

As you are aware, pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, February 3, the committee will resume its study of the housing accelerator fund.

I would like to welcome our witnesses to begin our discussions with five minutes of opening remarks, followed by questions. As individuals we have Edward Goldstein and Steve Pomeroy. Mr. Pomeroy is a consultant and executive adviser with the Canadian Housing Evidence Collaborative at McMaster University. From the Smart Prosperity Institute, we have Mike Moffatt, senior director.

I will now begin by asking Mr. Goldstein to present his opening comments for five minutes.

I will time you, Mr. Goldstein. As you get close to your five minutes, I will give you a 10-second notice to conclude your comments.

The floor is yours.

[Edward Goldstein, As an Individual]

Thank you, Mr. Chair and members of the committee.

My name is Edward Goldstein. I'm the president of Redwood Corporation, a family-owned business that develops land and builds subdivisions, plazas and purpose-built rentals.

In trying to prepare my presentation to this committee, I reviewed the comments of some of the other presenters and some of the questions that followed. One of the questions was in regard to a statement from CIBC that questioned the ability of the construction industry to be able to respond to the increased demand for housing and the resulting supply shortage. I believe that the question should have been about the ability of municipal governments to respond to this shortage by providing approvals in a timely and efficient manner to address the lack of supply.

I understand that there are currently shortages of labour and materials, but construction cannot occur until approvals have been obtained. My experience is that approvals are rare and require an inordinate amount of time to achieve. For instance, one of our developments is waiting for comments from the heritage group in a municipality, which sat with it for 18 months before deciding it had no comments. The site plan approval process was unable to continue during this time. This seems to be occurring on regular basis these days with many municipal departments.

There is an obvious shortage of purpose-built rentals in many of the large urban areas in Canada. My company had to rezone a site across from a regional shopping mall. It was a 4.8-acre site with 700,000 square feet of residential building area for rental housing in three 20-storey towers, and it attracted only 50 people to the public meeting, all of whom were interested only in when it was going to be built and when they could get a unit. That was five years ago. Currently the application is still being reviewed by staff and the project cannot begin construction. This is for a project to which there have been no objections from the public or any ratepayer groups, and the demand for the units has been demonstrated. Costs have risen dramatically during this time.

In addition, municipalities are inconsistent with their use of lot levies to generate income from developments. Some municipalities understand that the way in which they assess levies allows them to influence the areas and types of developments that developers propose. They understand that by paying levies on behalf of projects they wish to encourage, they achieve a payback in terms of the ability to obtain property taxes quicker than they would otherwise. This results in a quick return of their investment. This kind of forward thinking should be used more often and by more municipalities.

Some municipalities and regions charge different levy rates for units in multiresidential buildings based on their square footage. Developers are therefore discouraged from building larger, family-sized dwellings, of which there is little supply. Levies in one region in the greater Toronto area are expected to rise 16% for units under 700 square feet and 30% for units over 700 square feet at the next bylaw review. This seems to be counterintuitive to increasing the supply of affordable family dwelling units. I would also like to note that there are no size qualifications for levies charged on single-family, detached dwelling units.

The goals of the three levels of government must be aligned when money is given for large infrastructure projects. There's no point in funding rapid transit or highways when municipalities don't take full advantage of these expenditures in their planning process. Arbitrary height restrictions along subway or LRT routes should be less restrictive and allow more density. This would allow better access and more usage. It seems to me that the relationship between federal and provincial governments and developers is much more constructive than that between the developers and municipalities. This relationship seems to be adversarial in many cases. Much of the work done by the municipality is redundant and inefficient and adds excessive cost to projects. It exposes the municipality to additional liability as well.

The term affordability is misleading. I believe that what we are experiencing is a lack of availability of certain housing types that are required by different people. For instance, we think that affordability applies to home ownership, so we make funding available to allow more people to purchase their own homes, such as single-family, detached houses, townhomes or condominiums. In reality, many people, such as seniors or people who no longer require their own homes and are on a fixed income, would like to get out of the responsibilities of home ownership. They opt for a rental property because there's no requirement for a down payment or monthly condominium fees. There is a critical shortage of this product at this time. Municipalities should be sensitive to the needs and requirements of all people. This would increase the supply of resale homes as people move to a product more suitable to them.

Let's not forget that any two people making the same amount of annual income could have different ideas as to what is affordable or not, based on the lifestyle decisions they make. Any program that tries to define units as being affordable runs the risk of supplying units to persons for whom it was not invested in.

In summary, I believe that the committee should address the standardization of procedures with which municipalities examine development applications and the use of deadlines to speed up the process, the relationship between infrastructure spending and how municipalities utilize it, re-examination of procedures used to set levies and the uses for which they are required. In addition, consideration should be given to the fact that existing rental stock is aging and that much of it was built with data technology that doesn't meet our current carbon use and safety technology.

Thank you for your time.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Goldstein.

Now to Mr. Pomeroy. You have the floor for five minutes.

[Steve Pomeroy, Consultant and Executive Advisor, Canadian Housing Evidence Collaborative, McMaster University, As an Individual]

Thank you for having me here today.

I'm a long-time housing policy consultant and also am affiliated with research centres both at McMaster University and Carleton. I've spent about 40 years studying housing issues, particularly housing affordability issues.

In response to a call for ideas from CMHC back in January, I did submit a detailed brief discussing the issues of housing supply, the relationship between housing supply and affordability and the recent escalation in home prices and rents and provided some suggestions on how to structure the proposed accelerator fund. I've shared that with the committee. I think it's in translation. You'll get it in a week or so, I think.

I'd like to take one step back, though, from this question of how to actually use the fund and ask a more fundamental question: Do we actually need it? Do we need to spend $4 billion on an issue that has been defined as supply?

I'm not convinced that the issue that's causing home prices and rents to go up is primarily caused by supply issues. I think it's caused more by issues on the demand side of the market. Therefore, if we've diagnosed the problem incorrectly, spending money to fix the problem isn't going to actually solve the problem. I think there's a lack of evidence.

The corollary is, if we have a lack of supply, will increasing supply actually fix the affordability, this issue of excessive rents and excessive home prices? The evidence I present in the brief suggests that wouldn't actually be the case.

In terms of the argument that we have undersupply, certainly if we look at it over the last 20 years, we've actually had a fairly robust supply response. For every 1,000 people that we increase our population by, we've been building 540 homes on average. That's 1.85 people per home, compared to a national average of 2.4, so we've actually built enough to meet this.

We did have a surge in population growth in 2017-20 just before the COVID crisis, which did cause some pressures on the housing market. However, most of that increase in population at that point in time was from non-permanent residents—temporary foreign workers and, particularly, international students—which would have had more effect on the rental market and rents than it would have had on home prices in causing that particular problem.

I think that what has caused the double-digit increase in prices we've seen over the COVID period in two years has much more to do with the demand side, particularly the access to cheap financing, which increased significantly with the decline in interest rates. More particularly, as house prices have gone up, three-quarters of the people buying a home are existing homeowners. If the value of their equity just doubled, their ability to bid when they go out and purchase their new home is significantly enhanced. This concept of supercharged demand, enabled by these bagfuls of equity and windfall gains from sleeping in their beds at night, along with low interest rates, is really a much more significant factor in pushing up home prices—and, to some extent, rents—than is the lack of supply.

If the cause of increases is more on the demand side, will an initiative that actually increases supply solve the problem of excessively high home prices?

If we look at housing stocks last year, we saw a peak level up 33% over the average of the last 10 years to 271,000 units nationally, so the industry has responded and municipalities have responded. I think the issue now is, how do we sustain that level of supply as opposed to having to double the supply, as was proposed in the budget?

In the kind of supply we're seeing, though, the median price of new homes completed in 2020-21 was up 40%. We increased supply by 33% and prices went up by 40%. In the rental market in the last five years, we have seen a very significant increase in rental supply, which we saw very little of for about 15 or 20 years prior to 2016, but along with that, the average rent of rental units completed since 2016 nationally is 45% higher than the average market rent. Here in Ottawa, it's 65% to 70% higher than the average market rent.

So we're producing new supply, but we're not addressing the fundamental issue of whether that supply is affordable to lower- and middle-income renters or enables young households to access the home ownership market.

I think my first suggestion to the committee would be to actually define the problem correctly and see if this is the right kind of response. If indeed we do want to go forward with the accelerator fund, then I think it has to be very surgically targeted to specifically address the affordability issues.

Basically, incenting municipalities and rewarding municipalities for increasing the supply of family-oriented, ground-oriented homes below certain price criteria would be an effective way to do that. We had a similar initiative in 1975 under the federal housing assistance program, and it provided municipal incentive grants to municipalities to do just those types of things.

The issue here is really about defining the problem correctly. If we want to address affordability, let's be very precise about that and design the programs to come up with ideas that specifically address affordability.

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Pomeroy.

Now we'll go to Mr. Moffatt for five minutes.

Mr. Moffatt, you have the floor.

[Dr. Mike Moffatt, Senior Director, Smart Prosperity Institute]

Thank you for having me here today. My name is Mike Moffatt and I'm the senior director of the Smart Prosperity Institute, a clean economy think tank housed at the University of Ottawa.

Over the past five years, home prices have doubled in Halifax, in Kitchener-Waterloo and on Vancouver Island. They're up a whopping 164% in my hometown of London, Ontario. Despite that, they've not risen at all in Regina. They're up marginally in St. John's, Newfoundland, and are up less than 40% in Winnipeg and Quebec City, just a bit above inflation.

Why are home prices skyrocketing in some parts of Canada but not others? The answer is simple. In regions where housing completions cannot or are not allowed to keep up with population growth, we have skyrocketing prices. Southern Ontario is one such region. Before 2016, Ontario's population grew by roughly by 120,000 persons per year every year, and house price growth outside the greater Toronto area was relatively modest. The oil price crash of 2014-15 and the liberalization of federal policies governing international students caused an overnight population boom in Ontario centred around Toronto, and population growth rates nearly doubled overnight, as we detail in the report “One Million New Ontarians”.

In response to this population boom, Ontario changed almost nothing. Municipal planners all but ignored increased population growth. The 2017 revision to the provincial growth plan ignored the issue entirely, using population growth estimates that were several years out of date, which we detail in our report “Forecast for Failure”.

High population growth and low housing completions lead to housing shortages, skyrocketing prices and an exodus from the Toronto region. In the year before the pandemic, 60,000 people, on net, moved out of the city of Toronto and Peel region to other parts of the province. Last year, that figure rose to 72,000. Most of those migrants were between the ages of zero and four and the ages of 28 and 32. It was young families that were priced out of the Toronto region and were forced to “drive until they qualified”, going to other parts of southern Ontario. This exodus caused Toronto's population of children under the age of five to drop to levels not seen since the 1970s.

Because of the restrictions on building child-friendly, climate-friendly homes in our cities, those young families were often ending up in small-town Ontario, where family-friendly housing was allowed to be built. In our report “The Growth of London Outside London”, we show that historically roughly 20% of housing completions in the London, Ontario, area were outside of the city of London. Over the last decade, that figure has steadily risen to 41%.

While there are many benefits to small-town living, and while those homes may be child friendly, they're not particularly climate friendly. Families are being pushed into neighbourhoods that are not walkable and will never have access to public transit. This sprawl leads to increased infrastructure costs and it strains big city municipal finances. Those families will visit London to shop, work and learn using local infrastructure, but they will not pay municipal taxes to the City of London. With increased immigration targets and rising numbers of climate refugees and refugees from Ukraine, Ontario's population growth will remain strong, creating a further need for family-friendly housing. Regions that cannot build this housing should expect to see population outflow and labour shortages, leading to slow economic growth.

The federal government and all four major Ontario provincial parties have been committed to setting a target of 1.5 million net new new housing units in Ontario over the next decade, a doubling of housing starts from the previous decade. We believe at SPI that this is an appropriate target. However, we caution against the thinking that a unit is a unit is a unit. Ontario has been able to increase the construction of small high-rise apartment units in our major cities and single detached homes in our exurbs and small towns. What is missing is child-friendly, climate-friendly housing within our cities. Whether through the housing accelerator or other policy levers, the federal government should not just ensure that it is incenting more of the same, but instead ensure that its housing policies are compatible with its economic and climate goals.

I look forward to your questions.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Moffatt.

We'll now open the floor to questions from committee members, beginning with Madam Kusie for six minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Chair.

Thank you to our witnesses for being here today.

I'm finding this study incredibly frustrating because I'm hearing about so many of the problems. Yet it seems to me, in addition to the current federal solutions that we have that are not solving the problems, the problems that the federal programs are built upon originate in municipalities from which a large part of the current coalition government comes. I'm very confused about what the solutions will be.

Respectfully, Mr. Pomeroy, it seems to me that even if I have three people who own a house and they buy another house, the rent will be less for someone looking for an option for three houses rather than one house. I do believe, if it was just one house that was built rather than three, it is still a supply issue.

Then when I go on to the testimony of Mr. Moffatt, I'm wondering, Mr. Moffatt, what the shirts are in the background. If you would allow me, after I finish this line of thinking, to ask if you could explain that, I would be interested in hearing about that as well.

I'm hearing you say that you are seeing the current government programs pushing Canadians out of major centres into smaller centres. At the same time, I'm hearing you say that the government needs to do more of the same bad programming to keep the individuals in the centres. That's really what I'm hearing you say. I was with you until about three quarters of the way through your testimony.

Mr. Goldstein, your testimony is the one that's resonating with me the most, even though, apparently, you're not our witness. I will say, I do like your name. That is the name of my son, “Edward”. That's a great name.

When I evaluate what has gone wrong in my city of Calgary—and it's certainly not to the same extent as the examples provided by Mr. Moffatt in the GTA and other examples of Vancouver Island—it's three things that you touched upon, Mr. Goldstein. The first is approvals by municipal governments. There is one person to do retaining walls, for example, so you are waiting endlessly for an approval.

Second is the land supply. It think that in a coalition mentality there is a hesitancy to release land, which is just not realistic.

Finally, there are the levies, whereby municipalities think that if they stick it to the developers, that will solve their problems. However, the developers pass it on to the consumers rather than work collaboratively and intelligently with municipalities in an effort to not only economize those costs in the greatest possible capacity, but intelligently collaborate in an effort to avoid passing on those costs.

Mr. Goldstein, I'm hoping you'll be able to further address my comments about supply and those three things I mentioned—the approvals, the land supply and the levies. As well, I agree with your comment around affordable housing. I think this is a term that is continuously used disingenuously. People think, "We're a young couple; we want affordable housing", when really it's initiatives for a smaller segment of the population that the rest of the population will somehow have to pay for or subsidize.

I'd like your comments, please, Mr. Goldstein. Thank you.

[Edward Goldstein]

Thank you very much for your comments.

I could go on for hours about specific examples where I feel that the supply of developable land is being held up and is not able to proceed to the construction stage because the bureaucracy in the municipalities doesn't want to process those plans and they're not doing it in a timely fashion. I believe that's creating the supply issue. I think there's always a demand for housing. The demand is going to get better. We're actually going to be losing supply due to the fact that existing supply deteriorates. People are ignoring that fact, again, in the municipalities.

There really seems to be a disconnect between federal objectives and provincial objectives and municipal objectives created by political Nimbyism. I guess that would be the way to put it. Municipalities could be more constructive than they are in solving that problem. I mean, everybody stands to gain by supplying housing to all levels of society and making the communities work better within.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Goldstein.

Madam Kusie, your time is up.

Mr. Collins, you have six minutes.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thanks, Mr. Chairman.

Thank you to the witnesses for you attendance today and for the information you are providing.

I'll start with you, Mr. Pomeroy. Welcome, sir. Building new can be quite expensive. We've had certain witnesses come in to talk about retrofits and buying existing stock. It's cheaper and renovations can happen more quickly than new builds. The Parkdale Neighbourhood Land Trust was in front of us recommending an acquisition stream. It's really along the same theme that you adopted earlier in terms of a targeted approach.

Mr. Chair, if you remember, at the last meeting I talked about how it's not just about creating supply; it's about creating affordable supply.

I'd like to hear your comments about an acquisition stream, how that might help with either retaining affordable units that are in competition with the private sector or up for grabs for REITs and others, and how that might assist with a targeted approach to assist with our goal and objective of providing affordable housing.

[Steve Pomeroy]

I'd be happy to comment.

Mr. Goldstein mentioned the issue about the existing stock and about losing it. We haven't seen the data yet from 2021, but from 2011 to 2016 in this country we lost 322,000 units that were renting below $750 a month. That was 60,000 units a year of very affordable existing housing, most of which was in the private sector. It didn't entirely disappear. Some of it was demolished for redevelopment as a result of intensification policies. For most of it, though, the rents simply went to a higher rent level and they were less affordable to the folks living there.

That process, which is generally referred to as “financialization”, has various capital funds. I think REITs have been targeted in this, but it's not just REITs. It's a variety of investors, including individuals, buying three- or four-unit properties. They're seeing opportunities, because of high rent pressures and opportunities to increase the rents, to simply increase the rents. As a consequence, that stock moves out of it, and then we try to build new affordable housing for low-income people at $400,000 a unit.

The idea of the acquisition fund is to enable non-profits to emulate the behaviour of REITs, essentially non-profit REITs, and go and acquire some of these existing older, as in from the sixties or seventies generation, relatively affordable market rental properties that are renting at close to the average market rent. With a small amount of equity assistance and some financing through the federal government—by repurposing, for example, the rental construction financing initiative—they could actually acquire those. Because they're non-profit, they would tend to preserve the lower rents rather than push them upmarket.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

That's great. Thanks for that answer.

Along the same lines, in terms of a targeted approach for affordable housing, almost a third of Canadian households live in inadequate or unaffordable or unsuitable dwellings, and one-tenth are in core housing need. Can you advise us on how to assist those who are renters in this category with the accelerator fund?

[Steve Pomeroy]

The issue I was focusing on there was that housing need has those three categories. Is the unit big enough or suitable? Is it in good enough condition? Is it affordable? Of those folks in core housing need, 92% have only an affordability problem. They're living in a house that's adequate and suitable. Actually, taking the Canada housing benefit, for example, expanding it, and increasing the level of assistance to more households, for all those folks who are paying too much of their limited income for rent we could be giving them some help with the rent. We don't need to build them new housing. We could actually help them where they currently are.

I think we haven't traditionally in this country utilized those types of demand-side subsidies. The Canada housing benefit edges into that, but I think it's grossly underfunded relative to the level of need. We need about $4 billion a year rather than $4 billion over 10 years to really address housing affordability issues for existing renters, leaving aside any building.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thanks, Steve.

Mr. Chairman, I will switch gears now to Mr. Moffatt.

One of the unintended consequences of pushing density is that we see fewer family-friendly units constructed. I know, as past president of CityHousing Hamilton, that we had families on our affordable housing wait-list who wait anywhere between five and seven years for an affordable housing unit.

I would like to know from Mr. Moffatt how the accelerator fund can help support families who are in need of an affordable housing unit.

[Dr. Mike Moffatt]

The first thing we need to look at are all of the disincentives in the system to building larger units.

I agree with Mr. Goldstein that a lot of the tax and development charges we have at a municipal level incentivize the building of many smaller units rather than family-sized units. It's important, when spending this $4 billion and creating incentives for municipalities, to make sure that we are incenting the type of behaviour that we want. One way we can do that is by ensuring that municipalities are not putting their thumb on the scale and giving certain advantages to building very small units rather than two and three-bedroom units that meet core housing needs as described by Mr. Pomeroy.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thank you for that.

Here's a subsequent question, Mr. Chair, through you. The accelerator fund was advertised and marketed through the election and subsequently as helping municipalities with some of the issues that have already been noted today and by previous witnesses.

What role do you see the private sector and not-for-profits playing in co-operation with municipalities as it relates to utilizing those resources through partnerships?

That's to Mr. Moffatt.

[Dr. Mike Moffatt]

I certainly think there is a role. For the lower end of the population, it's just going to be too expensive to assume that they play in the market rate space. With that said, I think a lot of the barriers to doing that are regulatory ones that hit both market rate housing and subsidized housing.

Frances Bula at The Globe and Mail has a number of pieces in which she talks about the issues of building affordable housing in Vancouver and how Vancouver's municipal government is getting caught up in some of its own rules. I think we need to address those barriers that are preventing the entire spectrum of housing being built. When we look at more nimble regulatory processes, we have to realize that we're doing that not just to help the market side but also to accelerate the building of houses.

[The Chair, Liberal, Bobby Morrissey]

Mr. Moffatt, we've gone over the time. You can catch up during another question.

Ms. Chabot, you may go ahead. You have six minutes.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

I'd like to thank the witnesses.

These are not only major issues, but also complex ones for those who may be watching today's proceedings. The situation is more or less the same in every Canadian city. It's a problem in Quebec as well. It was just featured on the midday news, in fact. Vacancy rates have never been lower, while prices continue to rise. The housing out there is not meeting the needs of an average family with children.

I may be mistaken, but it seems to me that we are still adopting a supply and demand mindset. In other words, if we increase supply, costs will come down. I don't think that reasoning is entirely valid. We saw supply grow, and yet, costs continued to rise.

As I recall, the $4‑billion in new funding is spread over five years, so all of that money is not being invested now. On top of that, the fund does not set out a definition for affordability, which I see as a major shortcoming. It's important to define what is affordable.

How can this new fund truly meet the needs? What conditions need to be put in place to meet those needs? In my view, we need to do the following things: keep growing the supply of social and community housing; clearly define affordability; and, above all, determine the proportion of funding that will go towards so-called affordable housing.

What do you think, Mr. Pomeroy?

[Steve Pomeroy]

It is a complex problem. I think there are two elements here. One is this definition of affordability. As the member from Calgary mentioned, it means all things to all people. We don't really know what affordability is. The term “affordable housing” really focuses more on low-income folks and housing affordability is whether or not our kids can afford to buy a house. We really have those two different segments.

I don't think the housing accelerator fund is the right answer for the very low-income people. I think we need to basically increase the funding in the national housing strategy, which is targeted to the specific issues of addressing homelessness and very low-income need.

If the accelerator fund wants to address the second issue of housing affordability for middle income kids trying to get into the housing market and moderate income renters, then we have to look at what kind of incentives we're getting to. The other speaker, Mike, mentioned the issue of size. We had a very similar program in 1975. One thing it created was the assisted rental program. It was municipal incentive grants. The grants were unit-based and they were a specific number. The builders built a whole bunch of bachelor and one-bedroom units. If we actually do want to address the affordability in the rental market, and particularly for families who can't afford to buy, I think the accelerator fund does need to be quite prescriptive. It should say that it will give incentives to municipalities if they approve this type of unit, and certainly family-oriented units for that particular issue.

I think it's probably inappropriate to skew the accelerator fund to address the deep need issues which, as I mentioned, should be done through the national housing strategy.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

We nevertheless believe that a portion of the funding should be dedicated to affordable housing.

We need to define what affordable housing means, and that definition should include the percentage of the overall market it accounts for. Affordable housing could be considered to be $2,200 in a city like Montreal, which makes no sense. When we talk about affordable housing, we are talking about a place where people are going to live, so it can't be affordable for just one year; it has to be affordable on a lasting basis. It has to meet the needs of the middle class, so that those people can afford it.

If the new fund can't do that, it won't do what it's supposed to. If the goal is simply to create housing without taking affordability into account, the initiative is missing the mark.

The committee heard from witnesses who said that funding should be project-based, a bit like the process for the rapid housing initiative, which was quite effective. Do you think that's a good idea?

We are in the middle of a study where we can assess options. That approach worked well for organizations, even though the process was such that they had to submit their projects quickly.

Does a project-based approach sound like a good idea to you, Mr. Moffatt?

[Dr. Mike Moffatt]

I think we need to focus more on tying these funds to outcomes and particular reforms. I know a number of parties, for instance, have talked about how if cities are getting transit funding, they should be required to allow a certain height, duplexes or triplexes by right.

I think this money could be best spent by helping municipalities with regulatory reform to allow the market to build more family-friendly and climate-friendly houses, rather than paying to actually get homes built. As Mr. Pomeroy mentioned, I think that type of approach would be better on the national housing strategy or other federal projects.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Moffatt.

Now we go to Madame Zarrillo for six minutes.

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

Thank you, Mr. Chair.

I really appreciate opening up this conversation around demand. I agree that it's been largely ignored in this conversation.

I have a question for Mr. Pomeroy and potentially for Mr. Moffatt on what they see as the goal of this housing affordability accelerator and what they're hearing in their circles on the interpretation of the goal.

I really appreciate the comments on tying it to outcomes.

Before I get into it, I would like to share with you some of the things I have seen on the demand side. For example, we have created demand with low interest rates, with immigration services centralized in large urban centres, and with OCP changes that encourage intensification—which are in fact creating gentrification and renovictions, or destruction of purpose-built rentals. This also includes the short-term rental market like Airbnb. These are all of the demand-side pieces that I've seen.

I've even heard today some talk about the family-friendly and the larger [Technical difficulty--Editor]. I can tell you that in my experience we got transit funding along the route, and the development community said they were going to take the incentives they got for three bedrooms, but then came back and asked to turn them into lock-off suites so they could also rent out one or two of those bedrooms. Moreover, they then wanted interior bedrooms and didn't want to put windows on these bedrooms. It actually drove up the price. I'm really, really worried about this.

I want to dig in more on this demand side.

Mr. Pomeroy, I'm going to start with you. You named a few of the ones that you feel are driving demand.

Can you say what you think we need to focus on with the demand side? Also, what do you think is the goal of the housing accelerator fund, and what are they saying in your circles on what they think this is?