Financing 2% of the interest rate for 100,000 housing units would cost the state around $1.6 billion over two years, estimates Vincent Chiara. (Photo courtesy of Le Cercle canadienne)
Vincent Chiara believes that only one thing can convince real estate developers to restart housing construction and that is financial support from the provincial or federal government, which could come in the form of financing part of the interest rate.
The president and founder of Mach Group believes that neither the simple abolition of the QST, nor regulatory improvements in terms of obtaining residential building permits, nor raising zoning limits or granting tax breaks are measures that could, in themselves, “move the needle.” for developers to get their pending projects back on track.
“We see these types of measures being implemented in places like Longueuil or Gatineau,” he explained during a speech at the Canadian Club. And yet in these places there are no queues to start projects. There was also no massive construction work in other provinces because the sales tax on new buildings was abolished there. Because these measures alone are not enough. »
Financing 2% of interest rate
What Vincent Chiara proposes instead is temporary financial support for project promoters.
He suggests that governments (provincial or federal or both) temporarily fund 2% of the current interest rate until interest rates fall below 4%, which he believes is the financial equilibrium point for a housing project.
“In my opinion, that alone is a game changer,” he says.
The president and founder of Mach Group estimates the average cost of a door (house or house) in Quebec to be $400,000.
“If we fund 2% of $400,000 for 100,000 doors, it would cost the state $800 million a year,” he points out. So maybe $1.6 billion over two years until interest rates fall back below 4%. »
Serious problem
That amount may seem staggering, he admits. But he points to the Northvolt factory and the billions of dollars in funding provided by Quebec to put things in perspective.
“In most major cities in Quebec, the vacancy rate is below 1%,” he notes. It is a serious problem, but governments seem unaware of its extent. We need to accelerate the pace and build more than 150,000 homes per year (Editor's note by 2030), and last year we started with less than 40,000. Thousands of projects are on the shelves and promoters are just waiting for the numbers to make sense before launching them. »
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