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Tag: housing crisis
Two reports were released by the PLACE Centre at the Smart Prosperity Institute about the state of housing, both nationally and in Ontario specifically. It’s also the subject of some actual policy ideas within the Ontario Liberal leadership race, which seems to have its participants largely stepping up on a file that has been largely marginalized by Ontario Premier Doug Ford, at least in a substantive way—he has certainly used the rhetoric about the housing crisis as cover for the corrupt dealings that happened as part of the Greenbelt scandal that the province’s Auditor General outlined in no uncertain terms last week. While both reports—one on the rental housing situation in the country, the other about needing a plan to build 1.5 million homes in Ontario over the next decade—do contain a certain level of overlap between them, the key recommendation between both is coordination, not only between all levels of government, but also with industry and labour. And that’s the part that I worry the most about.
“No one actor in the system can ensure that housing completions keep pace with population growth,” the Ontario report recommends about coordination. “All orders of government, the higher education sector, builders, developers, and the non-profit sector all play a vital role.”
“Create a coordinated plan with all three orders of government and create an Industrial Strategy led by a roundtable of public and private builders, the non- profit housing sector, investors and labour,” the rental report states in its coordination recommendation. “The federal plan should include targets and accountability measures. The plan should include enhanced data collection, more robust and frequent population forecasts and better research to understand Canada’s housing system. The plan should also include a blueprint to fund deeply affordable housing, co-operative housing and supportive housing, along with seniors housing and student residences and double the relative share of non-market community housing.”
The housing crisis is one of the most pressing domestic issues the country faces, the notion of a national round-table discussion that involves the federal government, provinces, major municipalities, and representatives of labour, higher-education and developers seems unwieldly. I have no doubt that these conversations need to happen, and that it would probably help if most, if not all, of the players were in the same room together, but we have had a pretty terrible run lately in this country when it comes to calling big meetings to coordinate things. If you add in the Indigenous component that the rental report recommends, that may be an impossible task—not because they shouldn’t be included, but because their housing needs are so much vaster and more specialized in many cases (such as dealing with the challenges associated with remote communities who are only accessible by ice road for a few weeks out of the year) that it may strain the ability to come to any kind of joint resolution for action to its very breaking point.
Trying to salvage our failing public healthcare systems, particularly after the height of the COVID pandemic, has given us a taste of just how able our federal and provincial governments are when it comes to even trying to work together in order to solve what is a particularly existential crisis for one of Canada’s defining intuitions (well, according to public opinion surveys in any case). In that particular instance, you had provincial premiers who were willing to let the system collapse because they thought that it would give them additional leverage with the prime minister, whom they insisted on sitting down with in order to personally demand more money from, with no strings attached. It didn’t help that these same premiers were also in the thrall of a normalcy bias that had them believing that a healthcare collapse wouldn’t be that bad, because after all, the system didn’t collapse at the height of COVID, so why would it now? Suddenly emergency rooms were being force to close in some hospitals, and the premiers found out just what their unwillingness to do anything about the system was costing the public.
In the end, prime minister Justin Trudeau simply dictated terms to the provinces because they had caught themselves out, and he gave them some money—not nearly as much as they were demanding—with some of the tightest strings that have ever been attached to healthcare dollars, because the federal government had been particularly burned at the height of the pandemic when emergency dollars sent to the provinces didn’t go toward testing, tracing, nurses salaries, or shoring up the healthcare system in anyway. Rather, most provinces simply put the money directly onto their bottom lines in order to eliminate their deficits as their healthcare systems continued to deteriorate past the point of collapse.
I worry that the housing crisis will be little different—particularly as premiers are already demanding a face-to-face thirteen-on-one meeting with the prime minister on infrastructure and housing, which is transparently an attempt to try to bully him into simply turning over more money to them with no strings attached—the way they like it. Not to mention, the provinces already have a history of taking federal transfers intended for social housing, and much as they have done with healthcare dollars for decades, spent them on other things. And while the PLACE report recommendations do talk about targets and accountability measures, that is unlikely to happen without some pretty powerful incentives from the federal government, which is likely to mean money—a lot of it at a time when the federal government is trying to at least look like they’re interested in fiscal restraint.
None of this is to say that the different levels of government shouldn’t be meeting to try and hammer out some kind of coordinated effort on the housing crisis, because they absolutely should. My biggest worry, however, is that too much expectation is going to be placed on the federal government to do the lion’s share of the heavy lifting, the work, and the financing to do what needs to be done, while premiers can feel content to not hold up their end of the bargain and put all of the blame on the federal government while legacy media says things like “nobody cares about jurisdiction.” We are in a housing crisis. We do need all hands on deck. But we also need to ensure that premiers or mayors can’t shirk their duties without consequences from the public, because that is where the pressure needs to come from.
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.
Because we are living in an age of deeply unserious politics, we have seen yet another example of how correctly stating whose jurisdiction a particular constitutional responsibility lies becomes the dumbest political scandal. To wit, on Monday, prime minister Justin Trudeau stated that housing is primarily not a federal responsibility, but that the federal government was going to step up and do what they could do help provinces and municipalities with the crisis that we have collectively been sleepwalking into for a couple of decades now. Immediately, opposition leaders, the pundit class and much of legacy media all declared that these words would haunt Trudeau, because as we are all well aware by now, the discourse in this country is completely dysfunctional when it comes to discussions about jurisdiction—something that the premiers have long been able to take advantage of in order to avoid responsibility for the messes that they’ve created and refuse to clean up.
As legacy media has declared that “nobody cares about jurisdiction,” it has given tacit permission for opposition politicians to simply lie about what the government is doing, and should be doing—not to mention about what they would do if they were in government. To that end, Pierre Poilievre summoned journalists to a scrum outside of the West Block on Tuesday, and tried to ridicule Trudeau’s assertion about federal responsibility, pointing out that policies around immigration, infrastructure and taxes are things the federal government has power over, and that the Canada Mortgage and Housing Corporation is federal (ignoring of course that it operates at arm’s length from government). None of these, however, are an actual constitutional responsibility around housing, and none of these addresses any of the root problems around the housing crisis.
Yes, the federal government could and should create tax incentives for purpose-built rental housing, but that won’t help if you can’t get a permit or zoning for a rental property, whether a low-rise gentle-density building on a single lot or a high-rise. We cannot forget that in some cities like Vancouver, there are tens of millions of federal dollars for affordable housing projects that are languishing because the city won’t issue the permits for them. The federal government has already mandated housing and density around infrastructure projects they help fund, and they are already finding federal properties that they can either sell or develop into housing—things Poilievre says he would do if he were to form government (but more likely would just take credit for the work already done).
What Trudeau cannot do, which Poilievre pretends he could if he were in government, is force municipalities to give out more building permits. There is no constitutional power to do so, and if you think that picking fights with mayors and threatening to withhold federal infrastructure dollars to do so is a winning gambit and not a recipe for prologued court battles, well, you’re in for a surprise. Trudeau’s government is trying to use a carrot approach with their $4 billion Housing Accelerator Fund to incentivize municipalities to use that money to streamline their processes or undertake other processes that can get more housing projects started, but it also took them a year to start getting that money out the door, so there is a lengthy turnaround time for any of these kinds of policies.
Trudeau also cannot force lower rents or stop “corporate landlords” or the practice of renovictions, as Jagmeet Singh demands, because landlord/tenant legislation is entirely provincial. Yes, the Liberals did make some kind of a promise around “renovictions” in the last election, but they have never laid out just what mechanism they hope to use to stop them, which is as much of a problem in terms of the misleading processes that other parties are making on the housing file. Singh also accuses Trudeau of not showing leadership and simply pointing fingers at provinces and municipalities, but he has never articulated just what “showing leadership” is supposed to look like when you don’t have the federal levers to fix the root problems, which are very much about cities refusing density, and the NIMBYism that pervades this obstruction.
Another sub-plot to this crisis has been the concern-trolling around immigration numbers, and how “irresponsible” it is for the federal government to maintain high levels when we have a housing shortage. Frankly, this is not only a gateway to racist commentary (and believe me, I see it all the time in my social media), but we continue to need these high immigration levels because of our labour shortage and aging population. If anything, this should be a kick in the ass for the provinces to do something about the housing crisis, especially as provinces like Ontario demand more control over the immigrants they want to settle in the province. The added issue of international students not being able to find housing is a crisis that the provinces entirely created for themselves by cutting funds to post-secondary institutions and freezing tuitions, which forced those institutions to seek more international students (whom they can soak for much higher tuition). They should be held to account for this.
Because housing is a provincial responsibility, and because municipalities are creatures of the provinces under the constitution, premiers have the power to do something about this crisis, whether it’s abolishing R1-zoning in municipalities, forcing density targets, or using their own resources to build and maintain social housing (particularly in light of the fact that many provinces took federal dollars intended for that housing and then spent it on other things). We should also have legacy media demanding accountability for this from provincial governments like they’re supposed to do. Instead, we get them saying things like “a federal responsibility is what voters tell the federal government its responsibility is,” or demands that the federal government “force the provinces to force municipalities” to do something—because apparently the prime minister can just Green Lantern away Sections 91 and 92 of the Constitution. If the premiers are going to be forced to move, it’s because their voters are demanding action, and that can’t happen so long as we collectively keep making excuses for them and trying to blame the federal government instead.
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.
This content is restricted to subscribers
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.
This year’s federal budget tries to position itself as one focused on the crisis of housing affordability in this country. The entire first chapter of the budget was focused on housing. It was the first section in Freeland’s speech on the specific measures being taken. The problem is that there are very few levers at the federal government’s disposal when it comes to actually doing much about said crisis, particularly in attacking the root causes of it, which is of course the shortage of supply, and the fact that municipalities simply aren’t building enough of it. But how can a federal government push provinces and municipalities if their sales job consists of crowing about how much money they are sinking into solving the problem, and when some of their measures simply exacerbate the problem while simply trying to look like they’re helping?
In her speech, Chrystia Freeland acknowledged the supply problem, but quickly moved to back-patting about what the budget hopes to do.
“This must become a great national effort, and it will demand a new spirit of collaboration—provinces and territories; cities and towns; the private sector and non-profits all working together with us to build the homes that Canadians need,” Freeland said.
And a necessary note was in the prose as well: “But on housing, I would like to offer one caution: There is no silver bullet which will immediately, once and forever, make every Canadian a homeowner in the neighbourhood where they want to live.”
The document itself is far clearer that this is largely a problem that the federal government has too few tools at its disposal.
“To fill the gap that already exists—and to keep up with our growing population over the next decade—Finance Canada and the Canada Mortgage and Housing Corporation estimate that Canada will need to build at least 3.5 million new homes by 2031,” the document reads, and notes that currently, only about 200,000 new housing units are being built in any given year, and that we need to double that rate.
“Neither the federal government nor developers can solve this issue alone—provincial, territorial, and municipal governments also have a significant role to play,” it reads, and I’m surprised that this is not bolded, highlighted, and used as a pull-quote, because this is precisely the issue that we face.
Most of the logjams we face with building new housing is happening at the municipal level, particularly around zoning and permitting, with local councillors pandering to NIMBYs who are more concerned about their property values than in the housing crisis facing the country—because they want their votes—and many are financially beholden to kinds of developers whose bread and butter are urban sprawl and the blight of McMansions on winding, cul-de-sac streets, with the only nod to density being the single apartment building at one corner of the development, and calling it a day. Provinces could play a more robust role in clearing these bottlenecks, but most have very little interest in doing so. Ontario recently tabled legislation that claims to speed up approvals for new housing, but blatantly ignored their own task force’s recommendations on affordability, particularly around forcing cities to accept more density.
And this is where I’m not sure what particularly the federal government proposes to do in order to “incentivize” municipalities to fix the problems sitting on their front lawns. The $4 billion pledged in the platform was billed at helping cities deal with their permitting problems, but in the budget, the fund is to be administered by the CMHC and doesn’t much sound like the kind of financial incentive to drive structural change that it did in the platform.
“The fund will be designed to be flexible to the needs and realities of cities and communities, and could include support such as an annual per-door incentive for municipalities, or up- front funding for investments in municipal housing planning and delivery processes that will speed up housing development,” the document reads. “Its focus will be on increasing supply, but government supports will be targeted to ensure a balanced supply that includes a needed increase to the supply of affordable housing.”
The target of said fund is 100,000 net new housing units, and proposes to include assurances for small towns and rural communities that they can access it. This does not sound like it’ll help municipalities make the kinds of changes that will help permanently clear the permitting and zoning logjams that are preventing denser, more sustainable neighbourhoods from being built, but rather it sounds more project-specific. I hope I’m wrong about that.
And then there are the first-time home buyer programmes, which frankly just pour gasoline on the fire. Their “Tax-Free First Home Savings Account” does precious little for actual affordability, and favours those who are higher income, particularly given the size of the deduction allowable. (As Jennifer Robson has pointed out, this replicates a government program from 1974 until the mid-eighties, that also skewed to being used by people in higher income brackets and it sounds like they didn’t learn a single lesson). This, along with the decision to double the First-Time Home Buyers’ Tax Credit, merely juice demand when they just went on at length about inadequate supply, and will only serve to drive prices up. There is a fundamental incoherence here that sure looks like the government was far more concerned about the optics of being seen to “do something” rather than ensuring there was good policy.
Yet another example of simply looking like they are doing something is around “renovictions.” The platform had promised to crack down on them, which was constitutionally dubious considering that it’s provincial jurisdiction, and we can see in the budget that they have decided to get cute about it by tying the practice to corporations and investors who acquire large portfolios of residential housing using the disclaimer of “many believe.” Their solution? A federal review of housing as an asset class. I’m not sure this quite fulfils the bogus promise.
While I get the political imperative to do something about housing, and while it’s great to see that they acknowledge the jurisdictional tangle to the problems at hand, I’m not seeing how they are offering much in the way of solutions that will actually work. Talk about “incentivizing” municipalities, or the provinces to force the hands of those municipalities, needs some specifics, and that’s not what this budget offers.
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.
There are a lot of alarm bells sounding across the country in relation to the housing market, as prices have skyrocketed in the past few months, pricing a generation of first-time homebuyers out of the market. This past week, the mayors of the largest cities in the country met virtually in their annual meeting to discuss their issues, and predictably, there were renewed demands that the federal government to something about housing, while they paid particular attention to things like housing for urban Indigenous populations as part of their commitments to tackling homelessness. But in the communiqués the mayors put out, there was a massive lack of basic self-awareness on display, which is that the federal government has very few levers in the housing space.
First of all, we need to raise the point that some of this price acceleration is likely temporary. As Tiff Macklem, Governor of the Bank of Canada pointed out two weeks ago in his speech on the Financial Systems Review, the pandemic created a surge in demand for single-family housing in suburban and outlying areas of major cities, combined with the fact that households were saving more because they couldn’t spend on things like travel. Not unexpectedly, supply has not been able to keep pace with demand, creating the spike in prices, and this is very much a problem of supply. But we also have to recognize that there has been a supply crunch going back years, exacerbated by the fact that immigration levels have grown higher than earlier projections.
“Even without a shock, some of the factors that caused prices to rise fast could reverse later, and that could leave some households with less equity in their homes,” Macklem warned. “And interest rates are unusually low. Borrowers and lenders both have roles in ensuring that households can still afford to service their debt at higher rates. Counting on ever higher house prices to build home equity that can be used to refinance mortgages in the future is a bad idea.”
In recent weeks, the Office of the Superintendent of Financial Institutions (OSFI) increased the qualifying rate for uninsured mortgages, and the federal government also introduced some new mortgage rules designed to help cool demand, along with measures like the foreign buyers’ tax in the federal budget, but these are only among the very few policy levers available at the federal level.
Yes, the federal government can supply funding to municipalities for housing projects – which they have been – along with other rental subsidies to individuals once they come to bilateral agreements with provinces, which helps with affordability issues for renters, but even federal dollars have a limited impact. As much as those dollars have been allocated toward building new affordable housing units and repairing existing ones, there have been lags in the construction because of bottlenecks at the municipal level, particularly around things like issuing permits.
When Trudeau met with the mayors this week, he did make this point – that the federal government alone can’t cool housing costs, as policy levers exist at all levels of government, such as zoning rules and consumer protection regimes. And he’s absolutely right – there are so many problems at the municipal level with fights around zoning, basic NIMBYism, and people fighting over the “character” of neighbourhoods, including parking lots that they refuse to see developed. There is a desperate need for density and infill developments, rather than simply building new single-family housing subdivisions by paving over more farmland, however that’s part of the problem – in many cities, councillors are beholden to developers committed to sprawl. It makes it very difficult to force through the kinds of developments that these cities need, which doesn’t help the problem of supply.
And this is where the provinces need to come in. Housing is a provincial responsibility (though, as stated, the federal government has reclaimed a funding role in this space by means of bilateral agreements), and cities are creatures of provincial legislation. Provinces have the ability to do things like setting minimum standards on zoning, or using municipal orders that can help break logjams, going over the cities’ heads to use carrots and sticks more effectively because they have the most policy levers at their disposal. But in Ontario, there is the added problem of externalities – as soon as one municipality starts to solve its supply problems with housing, people flood into the region and drive the prices back up again. This makes it all the more important for there to be broad-approaches in this province to help slow down that migration effect at least, because there is a monster of a problem centred around Toronto, and it’s going to take a regional solution to deal with it.
With all of this in mind, the fact that the FCM’s communiqué was focused solely on chirping at the federal government rather than any admission that the hard work falls on their own shoulders when it comes to dealing with affordability – the bulk of which is to massively increase housing supply – was rather telling. While appealing to the federal government has long been the policy tool of choice in this country, it has become exacerbated over the course of this pandemic, to the point where you might not think that we have a division of powers in this country’s constitution. There has been no problem for which the federal government hasn’t been called on to solve, regardless of whether or not they have the actual levers to do so (and they mostly don’t, in spite of kludging together a few temporary solutions).
There aren’t any easy solutions to this housing crisis, but the most important thing is that the people who have the levers actually need to use them, and that means the provinces and the municipalities. They can’t simply expect more federal dollars to solve this problem – they need to actually show leadership and do the hard work of zoning and permits – damn the NIMBYs, and full speed ahead.
Photo Credit: The Canadian Press
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.
