A new report by the Canadian Urban Institute highlights the significant infrastructure costs tied to building new homes in Canada. Funded by the Canada Infrastructure Bank, the report estimates that each new home requires over $100,000 in infrastructure spending. This includes essential services like public transit, roads, water lines, schools, and recreational facilities.
Michael Fenn, the report’s author, emphasizes that while some infrastructure is immediately necessary, like water and sewage, other aspects can be developed later. However, without proper infrastructure, efforts to speed up housing production will fall short. Canada aims to add 3.5 million housing units by 2030, alongside the 2.3 million already planned, to restore affordability to 2004 levels. This means constructing over 500,000 homes annually.
Municipalities face challenges in financing new infrastructure, often hesitating to incur debt or raise property taxes. The report suggests alternatives like secured payments over an asset’s lifetime and developing new financing tools to share costs among beneficiaries, including developers. It also calls for collaboration between public, private, and institutional capital to address these challenges.
