The 2016 federal budget, released on Tuesday, promises to set aside $2.3 billion over two years for new and existing affordable rental housing, including doubling spending on a federal affordable housing program and adding $111.8 million to help 61 cities tackle the ongoing challenge of homelessness.
From that amount, $200 million will go toward repairing and building affordable housing units for more than 5,000 low-income seniors and $739 million over the same time for housing for First Nations, Inuit and northern communities.
In addition, the Government will provide ongoing support to 570,000 social housing units across Canada. Many of these units are older and urgently in need of repairs. To support the necessary retrofits and renovations, Budget 2016 proposes to provide $573.9 million over two years toward upgrades that would improve efficiency, reduce energy use and lower utility costs. By improving water and energy efficiency, this investment will also help the social housing sector contribute to Canada’s overall plan to reduce greenhouse gas emissions.
Affordable Rental Housing Innovation Fund
To encourage the construction of affordable rental housing, Budget 2016 proposes to invest $208.3 million over five years, starting in 2016–17, in an Affordable Rental Housing Innovation Fund, to be administered by the Canada Mortgage and Housing Corporation.
Funding would be used to test innovative business approaches—such as housing models with a mix of rental and home ownership—to lower the costs and risks of financing affordable rental housing projects. This investment is expected to support the construction of up to 4,000 new affordable housing rental units over five years, and is being made over and above investments in affordable housing under the Government’s social infrastructure commitment.
Going forward, Canada Mortgage and Housing Corporation will also consult with stakeholders on the design of an Affordable Rental Housing Financing Initiative to provide low-cost loans to municipalities and housing developers for the construction of new affordable rental housing projects. Up to $500 million in loans would be available each year for five years. This initiative would encourage the construction of affordable rental housing by making low-cost capital available to developers during the earliest, most risky phases of development. This initiative could support the construction of more than 10,000 new rental units over five years.