A crane stands between condo buildings in Toronto's Liberty Village neighbourhood on July 13, 2022.CARLOS OSORIO/Reuters
Throughout the 2010s, as the price to buy or rent a home shot higher, the political response was muted. Eventually there were marginal moves, such as speculation taxes, but leaders across the country ignored the main problem: there was simply not enough housing.
A decisive political shift happened over the past year. Governments are taking action. Opposition to new homes remains part of Canada’s political culture but the build-more ethos is, finally, winning.
Justin Trudeau’s Liberals are helping lead the shift. Ottawa’s housing accelerator funding has convinced dozens of previously recalcitrant cities to loosen zoning rules that restricted new homes. This week, in a blitz surely motivated by abysmal polling numbers, Mr. Trudeau’s government released a suite of new policies and added funding, ahead of the federal budget.
One item announced Tuesday is of particular importance: Ottawa put $6-billion into a housing infrastructure fund – think sewers and the like – and will deliver it to cities that agree to key conditions such as increasing density and bolstering building codes.
The work to build more is only starting. Many challenges are ahead. On Thursday, Canada Mortgage and Housing Corp. predicted housing starts through 2026 would average about 230,000 annually. This is close to a record of 271,198 starts in 2021 and better than the past – the 2024-26 outlook is about 15 per cent higher than during Stephen Harper’s decade in power – but the policy push to build more is clearly needed.
Cities have spent too little on infrastructure such as sewers for too long. As city councils and planners restricted new housing, they were able to artificially keep taxes too low as they underinvested in new sewers. This went on for years. Consider Vancouver. Three years ago, a Globe feature revealed a lack of sewer capacity forced housing plans to be delayed. “The city under the streets, it’s colossal,” said Vancouver’s head of engineering. And yet Vancouver spent barely half of the minimum required on sewers each year.
Cities like Vancouver failed to plan for growth. Not enough homes, not enough sewers. Planning needs to focus on a future of abundance. As one Vancouver housing activist said: “If we, as a society, can no longer build new sewers as the city grows, then we really are in trouble.”
As cities kept property taxes too low, they overly taxed new housing. Consider Toronto. City development taxes on a new two-bedroom condo, for example, have quintupled over the past decade. One key element of Mr. Trudeau’s infrastructure money is a requirement that cities enact a three-year freeze on development taxes. This space strongly supports a recalibration of how cities pay for new infrastructure. Too much is unfairly forced onto new owners. That mindset must change.
After Ottawa announced housing money, some provinces were upset, claiming jurisdictional umbrage. Ontario Premier Doug Ford said city councils “know best.” This is flat-out wrong. Cities are at the root of the problem, having wielded local rules to slow new construction. Provinces could have stepped in – British Columbia did with groundbreaking legislation – but most others didn’t.
Given this lack of leadership on housing, Ottawa’s heft is welcome. And if provinces don’t like Mr. Trudeau’s ideas, Pierre Poilievre likewise plans to use Ottawa’s spending power to achieve national aims on a local level. Cities themselves are not unhappy. The Federation of Canadian Municipalities said the money is a “vital stepping stone.”
Also on Tuesday, an idea long in the works seems to be finalized: tying federal transit money to cities agreeing to housing density around new stations. This has bipartisan backing and a prototype deal in Vancouver for the Broadway subway shows how such agreements can be successful. And Ottawa’s details are on the mark: Transit funding will not allow what are called parking minimums near stations. Cities require builders to include too much parking, which unnecessarily inflates the cost of new homes.
The transit plan appears modelled on recent B.C. legislation. This is good news. B.C.’s policy plan is the right one. This space late last year advocated for other provinces to copy it.
The blueprints to build more housing have come into focus. There’s a lot of work ahead to build millions of new homes – and the effort includes all the sewers we cannot see below our feet.