Growth in new home construction won't change Windsor's funding access, minister says
Housing starts for the first half of 2024 are eclipsing numbers for the same period in the previous five years
Canada's housing minister says a recent boom in housing starts in the Windsor area is "unabashedly good news" — but he still expects the city to get more ambitious in planning for growth if it wants to access federal Housing Accelerator funding to support new home construction.
Sean Fraser told CBC that several factors have contributed to recent growth in new home construction in Windsor, including lower interest rates and major projects in the city such as the Gordie Howe International Bridge and the Stellantis-LG Energy Solution EV battery plant.
But with the Housing Accelerator Fund, he said, the government is looking for "ambitious, systemic reforms that will pay off over the short and long term."
"The Housing Accelerator Fund is not meant to simply show its value over the first few months," Fraser said. "But that's meant to change the systems over a matter of many years."
In January, the federal government rejected Windsor's application for up to $70 million in Housing Accelerator money saying that the city stopped short of implementing the best practices the government had published to encourage new home construction.
Stiff competition for funding
Particularly contentious was a suggestion to allow fourplexes across the city as of right, something the mayor and council have rejected.
The federal government does not require the zoning change in order for municipalities to qualify for Housing Accelerator funds, Fraser said.
But the program is competitive, and other municipalities have been willing to implement a wide array of best practices to spur development.
"So if the borrower is raised beyond what certain cities are willing to do, those cities who aren't willing to do all of the things are not likely to qualify, Fraser said.
"Because I can tell you the demand for this fund with cities who are willing to do all of the best practices that we've identified publicly are outstripping the actual supply of funds in the program."
Housing starts in the city of Windsor totalled 693 for the first half of 2024, according to data from the Canada Mortgage and Housing Corporation.
That's up more than 200 per cent from an average of less than 240 during the same period in the previous five years.
The chair of the Windsor Essex Home Builders' Association said the numbers reflect optimism among developers over Windsor's future, rather than robust demand at the present time.
"The market-driven stuff that you're seeing is still pretty dry," said Brent Klundert, who also owns BK Cornerstone Design Build Ltd.
Optimism, rather than market conditions, driving development
"We haven't seen a huge bump in sales, right? … Usually, the market does kind of drive the investment and the housing starts. In this case, what you're seeing I think is, you know, a bet on the Windsor market as a whole in the next couple of years and what's coming to the area."
The numbers are also bolstered by some significant projects that have recently gotten underway, in part because of the decline in interest rates, Klundert said.
Klundert, whose company is involved in development, doesn't believe the city's decision to limit fourplex construction in some areas is having a significant impact on developers, he said.
But he added, "As land becomes continuously more expensive, these infill projects — if four units are available on them, it does become a better opportunity for the developer."
The city could also further aid development with the money it could receive if it changed its zoning in order to compete for the Housing Accelerator funds, he said.
Fraser noted that the Housing Accelerator is not the only federal initiative aimed at supporting new home construction.
The government has also eliminated the GST on some new purpose-built rental housing construction, offered low-cost financing for some development, and created funding programs for social housing and coop housing.
It can also offer public land for development, Fraser added.
"I'm going to continue to work alongside the city of Windsor, despite the fact that they may not be availing themselves of this particular funding opportunity," he said.
"But there are other tools that we want to make available to be a good partner to ensure that we see the housing growth in this city."