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The approximately $113-million for Mississauga is among the largest funding agreements signed between the federal government and about a dozen Canadian cities.J.P. MOCZULSKI/The Globe and Mail

Mississauga on Monday inked a deal for federal housing money that council had originally rejected, only days after another Southern Ontario city balked at Ottawa’s demand for more density.

The approximately $113-million for Mississauga is among the largest funding agreements signed between the federal government and about a dozen Canadian cities. In each case, money distributed under the Housing Accelerator Fund is intended to streamline growth.

But the process has not been without bumps. Windsor, Ont., is the latest city to push back at Ottawa’s demand that it allows more density. North American cities have traditionally reserved much of their land exclusively for single-family homes and the requirement to allow four-unit buildings in all neighbourhoods has proved particularly contentious.

This issue threatened to derail Mississauga’s housing funding. With Mayor Bonnie Crombie on leave as she pursued the Ontario Liberal leadership, council was deadlocked and could not agree to support the greater zoning. Ms. Crombie returned and used her strong-mayor powers to ensure the change was made, paving the way for Monday’s deal.

At an announcement, Ms. Crombie called it a “monumental” deal.

“This marks an important milestone in our city’s commitment to building more homes,” she said. “It single-handedly represents the largest investment any level of government has ever made in housing in Mississauga.”

The same concern about zoning is now jeopardizing Windsor’s bid for housing money. At a special meeting of council last Wednesday evening, Mayor Drew Dilkens led opposition to allowing more density.

In a statement Monday, Federal Housing Minister Sean Fraser warned that the housing accelerator fund is “oversubscribed” and that Windsor’s decision undermined the city’s application for funding.

“Only the most ambitious applications will be successful,” said the statement, forwarded by his office.

“With so many other cities, big and small, choosing to adopt more aggressive zoning reforms, it will be tough to make a case that Windsor ought to nevertheless be chosen for funding in the absence of moving to the same standard.”

Mr. Fraser held out the possibility of meeting with Mr. Dilkens and a local Liberal member of Parliament to find a way to an agreement.

If no deal can be reached, Windsor’s vote could cost the city between $40-million and $70-million in federal funding. However, local media reported that Mr. Dilkens argued he had to protect existing homeowners.

“For us to wholesale say, you know what, we don’t mind if a four-plex is built next to you, I think that’s disrespectful to people in neighbourhoods throughout the city,” the mayor said in a report by CTV in Windsor.

Mr. Dilkens was not available for interview Monday, according to staff who cited a family emergency.

Anneke Smit, the director of the University of Windsor’s Centre for Cities, said she wanted to know what the mayor had meant by such comments.

“What actually is the issue with having a four-plex next door or having rental accommodations next door?” she said. “I think we have to be really careful that we’re not preferencing the voices of some over the voices of all.”

Prof. Smit, who focuses on equitable and sustainable city-building, called the anti-density vote a disappointment and an unfortunate message to send to young residents of Windsor or people who might want to move there.

“This is a city like many in the depths of a housing crisis, perhaps one of the worst in the country,” she said.

Mr. Dilkens floated the possibility of allowing some four-unit buildings, but only in areas where he believes they make sense. This would fall short of the federal requirement that they be allowed citywide “as of right,” meaning without special permission.

Halifax also pushed back on this requirement, though the city managed to propose a plan for density that satisfied the federal government. In October Ottawa awarded the city about $80-million.

In other cities the requirement has proved a step too far.

“I’m not sure, in Oakville, we’re ready for four units as of right,” Allan Elgar, a councillor for the city west of Toronto, said during a recent budget meeting that turned into a debate on the accelerator fund.

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