Will unlocking public land effectively create affordable housing?

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In a landmark move outlined in its 2024 federal budget, the Canadian government plans to lease public lands to developers in order to slash capital costs and expedite construction nationwide. The measure would be a transformative leap towards broader housing accessibility for Canadians. The Financial Post’s Shantaé Campbell explores how the move could help kick-start affordable housing projects.

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How does the government plan to transform public land into affordable homes?

At a press conference in April, Prime Minister Justin Trudeau announced plans to address housing affordability in the upcoming federal budget and said unlocking surplus government land could alleviate pressure on the housing market.

“We have a lot of public land in Canada that’s underused or vacant. With budget 2024, we’re unlocking this land for construction and building thousands of new homes – so that you have a good place to call your own, at a price you can afford. We’re cutting red tape, building more homes, and making the housing market fairer for every generation,” Trudeau said.

The plan to lease public lands to developers is a bold departure from traditional housing development strategy in Canada. Historically, high land acquisition costs have been a significant barrier to building affordable housing. By offering public lands at reduced costs through long-term leases, the government aims to incentivize developers to launch projects that prioritize affordability.

This initiative is what’s known as a leasehold infrastructure delivery model, which is particularly useful for large-scale housing and other development projects.

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EllisDon, a prominent player in infrastructure development, views the leasehold infrastructure delivery model as pivotal for maximizing land potential for residential purposes.

Nicholas Gefucia, senior vice president of EllisDon Community Builders, elaborated on the significance of this approach. “Our perspective is centred on the effective utilization of underutilized lands, particularly those held by federal agencies,” he said.

The government will initially unlock five federal properties for lease, with a view to building more than 800 new homes, including approximately 100 in Montréal, 500 in Ottawa, 100 homes in both Toronto and Calgary, and at least 40 in Edmonton.

How soon can Canadians expect to see affordable homes from this initiative?

According to the government, the first task is reviewing its entire portfolio of federally owned land and properties to identify sites where new homes can be built.

“It could take some time,” Gefucia said, acknowledging that this will be a gradual process, requiring patience and persistence. In anticipation of the subject lands being released, EllisDon has begun modelling scalable and replicable building solutions for residential development on government lands.

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How does the leasehold model contribute to housing affordability?

The long-term lease agreements will provide developers with the stability and predictability crucial for planning and executing large-scale housing projects. By saving on outright land purchases, developers can allocate more resources toward construction, building more units at a faster pace, with higher-quality materials and sustainable design features.

What other financial support is the government providing?

To address the housing crisis, budget 2024 allocated financial resources across several initiatives.

A $500 million Public Lands Acquisition Fund will purchase land from other government entities and make them available for affordable middle-class housing developments.

The Federal Lands Initiative will receive an additional $117 million to release additional public lands for the construction of at least 1,500 new affordable homes.

A $20 million investment in the Centre of Expertise on Disposals will streamline administrative processes to reduce delays and accelerate the construction of new homes.

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The government will spend $15 million to develop a comprehensive public land bank, including an interactive mapping tool to enhance planning and decision-making. This will enable more efficient use of public assets for housing needs.

Lastly, a $5 million investment will expand the capacity of the Canada Lands Company to develop homes on public lands.

What types of land is the government making available for affordable housing?

According to the government website, Canada Post has more than 1,700 post offices across the country, many of them one-storey buildings that can be redeveloped to accommodate new homes while maintaining postal services.

National Defence lands are also listed as valuable space for housing. The Department of National Defence owns underutilized properties in every province and territory. Redeveloping these for both military and civilian use and divesting surplus properties not needed for defence operations can support new housing projects.

Additionally, half of federal government-owned office buildings are either underused or vacant. Reducing the feds’ office footprint and repurposing these buildings, especially in urban areas, can create new affordable and student-focused housing.

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What challenges must Canada overcome to scale up its housing goals?

Canada faces a daunting task of adding 3.87 million new homes by 2031 to meet its housing strategy targets. Gefucia underscores the role of innovative delivery models in achieving this scale, stating, “Our goal is to demonstrate through pilot projects that the leasehold infrastructure model can effectively contribute to scaling up housing production.”

However, scaling up to this degree will necessitate a larger workforce of skilled tradespeople. Recognizing this need, the federal government is launching new initiatives to attract and train more post-secondary graduates for careers in the trades. These efforts will include targeted recruitment campaigns, enhanced training programs, and partnerships with educational institutions to ensure that students are aware of the opportunities and pathways available in the trades.

• Email: shcampbell@postmedia.com

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