Saturday, June 15, 2024

Even before the release of the federal budget, Ottawa’s pro-housing agenda is changing the country

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Sean Fraser, Minister of Housing, Infrastructure and Communities, speaks during an announcement outside a rental housing building being developed by the University of British Columbia Properties Trust in Vancouver on Aug. 16, 2023.DARRYL DYCK/The Canadian Press

On housing, the Trudeau government gets it – finally. A flurry of prebudget announcements have pushed housing to the top of the national agenda. With the release of the budget Tuesday, the Liberals will prove they are prepared to spend political capital and money on finding solutions.

Unfortunately, many of those policies could be kiboshed by a Conservative government within a year. The good news is that the government has staked out a clear and correct position: Housing is a national issue, and Ottawa must speak loudly for reform.

The government’s housing plan, released Friday, is a bold document that suggests federal money and political rhetoric – Ottawa’s main tools – can make a dent in the problem.

We’ve already seen those tools at work. Since his appointment last year, Minister of Housing, Infrastructure and Communities Sean Fraser has been a force – coaxing, cajoling and pushing cities into making it easier to build housing, using the $4-billion Housing Accelerator Fund as a carrot.

It has worked. One hundred and seventy-nine municipalities have signed HAF agreements with Ottawa, each promising to amend their planning rules to make it easier to build housing – apartments – in more places.

And this is the heart of the issue. No progress on housing is possible unless you make housing legal to build. Given today’s high costs, most new housing will inevitably be in some sort of apartments. Yet in many cases, cities have made apartments illegal. This has to change.

Mr. Fraser understands this and has achieved remarkable results. In less than a year, his office has profoundly changed land-use planning in Canada. Unlike his predecessors, the minister demonstrates a deep command of housing policy and a willingness to get in the weeds of council subcommittees.

He has prompted extensive pushback from premiers who see the federal government’s action as meddling. But he’s right. And the idea that “fourplexes” should be legal just about anywhere is now, basically, settled in Canadian politics. This is a big victory.

Toronto will get nearly half a billion dollars in federal funding for housing

It is bigger, in the long run, than anything Ottawa has announced in the past month. Technical innovations and financial increments will only get you so far if every single apartment building has to run a gauntlet.

To complement this theme, the prebudget housing announcements imply a detailed agenda for addressing the crisis. The housing plan sets out three goals: encouraging new construction, supporting tenants – especially those with low incomes – and, less usefully, supporting first-time homebuyers.

Two-thirds of this makes a lot of sense.

On housing supply, Ottawa has added $15-billion to a fund supporting apartment construction and has pledged $1-billion to support new homebuilding technologies, a long-term effort that could eventually pay off. The plan also makes changes to tax law, increasing the “capital cost allowance” for rental apartments. That is arcane but consequential: It should make rental housing much more attractive to build, just as it was half a century ago.

The truth is that in Canada almost all homes are provided by the private sector. This has always been the case, even in the co-op heyday of the sixties and seventies. Today’s crisis cannot be solved without the building industry.

At the same time, to support tenants, the government has announced the $1.5-billion Canada Rental Protection Fund to help non-profits acquire existing rental homes and keep them affordable. This move, long suggested by affordable-housing advocates, echoes similar moves in B.C. and Ontario. It is short-term triage and very valuable as such.

However, supporting first-time homebuyers is good politics and dubious policy. This week the government announced they will be able to choose longer mortgage amortization periods. Such measures are routinely dismissed by experts as counterproductive because they inflate home prices. This is the sort of thing the Trudeau government has pursued in previous years, and it deserves to be jettisoned. Similarly, the promise to combat “financialization,” by preventing large corporations from buying houses, is pandering. A similar measure in the Netherlands has benefited wealthier buyers at the expense of tenants.

With Tuesday’s budget we will see just how far the government will go to build new housing itself, including details of an initiative to build social housing through land leases of public property. That could be another big, welcome intervention. But the Trudeau government has already changed the conversation in important ways. Canada needs to build. Not-in-my-backyard attitudes have to go. Apartments belong everywhere, and the people who live in them deserve security.

It’s utopian to think that all this will survive a change in government. But to solve a crisis, you have to start somewhere, and ideas have a way of sticking around.

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