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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.



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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.