Montreal is building less housing than other Canadian cities, report says

The construction of new apartment buildings surged by an average of eight per cent in major Canadian cities last year except in Montreal, according to a report by the Canada Mortgage and Housing Corporation (CMHC).

With a provincewide housing crisis and critically low vacancy rates, Montreal is going in the wrong direction, says the report.

The city only got started on 15,000 housing projects in 2023, an eight-year low.There were 30,000in 2022. The CMHC says this is mainly due to high interest rates and rising construction costs.

But other major cities like Calgary, Toronto and Vancouver saw record-high levels of housing construction despitefacing the same high interest rates and construction costs.

Francis Cortellino, a CMHC economist, says Quebec has a lot of red tape that discouragesdevelopers.

In Toronto, a lot of projects are condos and high-rises while Montreal has more low-rise and mid-rise structures. The rental market isn't as profitable as condos for developers, said Cortellino.

But he says policy moves, like the one Quebec implemented allowing municipalities to approve projects that deviate from urban planning regulations, could help accelerate building starts.

Cortellino also said that once interest rates drop it will be a good time for developers to build more housing projects.

Guillaume Houle, a spokesperson forthe Association de la construction du Qubec (ACQ), says Quebec will need to do more to support developers financially. For example, the association asked the government to drop taxes for new developments, a moveOntario has already made, but "the government doesn't think it's profitable" to do so, he said.

"Quebec doesn't have the best economic conditions to compete with other provinces right now," he said.

"If interest rates go down, maybe the optimism will show up again but we don't see how the situation is going to change in the near future."

Cortellino says all three levels of government need to be involved in improving Montreal's housing, along with developers and non-profit organizations.

"Everybody must be part of the solution," he said.