Real estate: A hot topic this year

As we approach the end of 2023 and reflect on the year that was, affordability and housing were at the forefront of all governments and political stripes, spanning the nation. 

Cited as a housing crisis, the national and local news saw much discussion surrounding inflation, interest rates, labour shortages, a foreign buyers ban, and the federal Housing Accelerator Fund (HAF), to name a few. 

After multiple interest rate hikes in 2022 to curb inflation, the Bank of Canada made three more interest rate adjustments in 2023 to take us from the 4.25% where we began the year, to the 5.00% where we stand now. Interest rates are always one of several factors at play in the real estate industry, like the economy, job outlook, immigration, government policies, supply and demand, and personal financial circumstances, as examples. There is little doubt, however, that interest rates and inflation were contributing factors in the Winnipeg Regional Real Estate Board’s market region and across the country. With costs on seemingly everything rising from groceries to electronics to gasoline and automobiles, it is understandable that consumers were cautious in 2023.

When Canadians woke up on January 1, 2023, there were new federal regulations in place which prohibited the purchase of residential property by non-Canadians. The Canadian Real Estate Association (CREA) was on the frontline in advocacy efforts on this, as the initial regulations left a lot to be desired. In March, however, there were amendments announced to enable more temporary worker permit holders to purchase a home while working in Canada, to repeal the existing provision so that it did not apply to the purchase of vacant land zoned for residential and mixed use, an exception for non-Canadians to purchase residential property for the purposes of development, and increasing the corporation foreign control threshold from 3% to 10%. 

While we’re in the federal realm of jurisdiction, in mid-October, real estate boards, associations, and REALTORS® from across Canada gathered in Ottawa for the Canadian Real Estate Associations Annual Political Action Committee (PAC) conference to advocate to federal Members of Parliament on the current housing crisis. At the heart of the discussions at this year’s event were three recommendations to help address the current housing crisis:

1. Establish a permanent National Housing Roundtable to bring together housing stakeholders to help address the housing crisis through an inclusive, holistic approach that emphasizes collaboration, innovation and policy coordination. 

2. Leverage federal infrastructure funding with municipal, provincial, and territorial partners requiring the creation of more housing supply. 

3. Develop a housing workforce immigration strategy to attract tradespeople from abroad, while streamlining the immigration process for qualified professionals willing to work in the construction industry. One of the reasons the construction industry has struggled to keep up with the soaring demand for housing is a lack of labour needed to build homes.

As we shift our focus from the federal realm to municipal jurisdiction, the $4 billion Housing Accelerator Fund (HAF) which was launched in March provides the perfect segway because it’s a federal incentive program for municipalities. There is an oft-cited CMHC report that underscores the need for a program like this and it estimates that an additional 3.5 million homes need to be built nationwide in order to restore affordability in 2030. Here in Winnipeg, local City Council approved a plan for a $192 million application to the Fund with a goal of creating 5,277 units by Fall 2026 with 25% targeted as affordable. The City also has an overarching goal with the Fund of creating 15,000 units over the next decade to improve affordability, address homelessness and ensure there are enough homes for current and future Winnipeggers. The City of Winnipeg’s overall objectives for applying to the HAF are for:

• Implementation of initiatives to get more homes built faster.

• Accelerating approvals and building processes.

• Development of complete communities.

• Development of affordable, inclusive, equitable and diverse communities.

• Development of low-carbon and climate-resilient communities.

Meanwhile, the goals of the City of Winnipeg’s application to the HAF include:

• Rapid zoning by-law amendments;

• Rapid amendments to local area plans;

• Incentives to support multi-family housing development downtown and along commercial corridors;

• Creation of a land enhancement office;

• Creation of a concierge program to support affordable housing development;

• Infrastructure supports to increase residential development; and

• Digitization and facilitation of faster development and permit approvals.

On October 24, 2023, the Government of Canada’s Minister of Housing, Infrastructure and Communities, Hon. Sean Fraser, wrote to Mayor Scott Gillingham to encourage the City of Winnipeg to bolster its application to the Housing Accelerator Fund (HAF) by including:

• Legalizing four units as-of-right city-wide;

• Legalizing up to four storeys as-of-right within 800 metres of transit; and

• Ensuring that new mid-rise housing zoning reforms targeted for mall sites and commercial corridors — as proposed in City Council’s Strategic Priorities Action Plan — allow for as-of-right development to facilitate quick approvals and construction of new rental housing.

Cities across Canada have already made similar changes, including Calgary, Edmonton, Vancouver, Toronto, Brampton, Halifax and Hamilton. In the end, Winnipeg City Council voted in favour of the changes on November 23, 2023, by a vote of 13-3 to ensure the City of Winnipeg remained in the running for their $192 Million application to the HAF.

As Mayor Gillingham said: “Winnipeg is growing, and with that comes an increased need for affordable housing.”

A federally approved $192 million HAF application would certainly go a long way in helping Winnipeg create more affordable housing spaces while modernizing the City’s zoning and permitting and increasing density.  If the City receives funding from the HAF and is successful at achieving the results outlined in their application, the subsequent benefits could be transformative both for the City’s processes and for Winnipeg’s housing supply. Winnipeg continues to be one of the most affordable real estate markets in Canada. Actions like those included in the City’s HAF application can only work to protect our affordability advantage.

One thing you can say with certainty about 2023 is that housing was an issue of great focus across our nation, and until the gap in supply can be eliminated, it is likely to be a topic of discussion in 2024 and beyond. Another thing you can say with certainty is that REALTORS® will be at the heart of those discussions advocating on behalf of current and prospective homeowners now and into the future.

Jeremy Davis is the Winnipeg Regional Real Estate Board’s Director External Relations & Market Intelligence.