The Multigenerational Home Renovation Federal Tax Credit: What effects will it have on the housing crisis? – Community Housing Transformation Centre – Centre de transformation du logement communautaire
7 Feb, 2023

The Multigenerational Home Renovation Federal Tax Credit: What effects will it have on the housing crisis?

By Centre

As part of its plan to make housing more affordable, the federal government implemented a new refundable tax credit for multigenerational home renovations on January 1, 2023.

This contribution to finding a solution to the housing crisis, in particular to the housing problems for seniors, has attracted the attention of the media and members of the middle class, but its impact on the housing crisis remains marginal.

Good news for the middle class, especially seniors

Demand for multigenerational housing appears to be rising in some provinces. The high cost of property values is certainly a contributing factor to this trend, as are impact of the pandemic, as well as cultural values.

In terms of individual solutions, this new measure has an obvious financial advantage by reducing the cost of construction, since building on land that already belongs to a family helps remove 30 or even 40 per cent of this cost,” says Stéphan Corriveau, Executive Director of the Centre in an interview with Radio-Canada Vancouver.

In addition, this proximity between generations is useful in both directions for some families. Parents benefit from the presence of grandparents to help with childcare, for example, while seniors are less isolated.

A solution with modest effects in the fight against the housing crisis

At the broader level of the housing crisis, the solution remains marginal because it proposes individual solutions to a collective problem.

In order to think of solutions on a social scale, and for questions of environmental efficiency, economy, organization of the land, we must not consider that a single-family house and a small suite attached to it on a large lot is the solution in itself. We remain in a very low density. It would be more advantageous to develop land to accommodate two- or three-storey buildings. This would allow for higher density, better quality of life, and more sustainable solutions to current needs,” says Corriveau.

The counterproductive effect of individual solutions is fueling the rise in home values. A house is more often seen as an investment rather than a home. This view disadvantages the following generations who end up buying at higher rates. A different approach to the whole housing issue is needed.

Across Canada today, two million households have to pay up to 80% of their income to cover rent. The solution for these people lies in community housing, both to meet the housing needs of Canadians and to curb the financialization of real estate. The city of Vienna is often cited as an example of the strength of this approach, with 60% of the city’s residential assets being part of the community domain. Access to housing is easier in Vienna than in most major Western cities, and the large number of community apartment buildings significantly curbs the harmful effects of speculation.

Listen to Stéphan Corriveau’s interview on Radio-Canada’s Panorama in French.

Are you interested in ambitious solutions to the housing crisis?

Learn about Plancher: an initiative led by the community housing sector to multiply the construction of affordable and sustainable housing in Quebec.

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