Two years after their election victory, the federal Liberals finally presented their National Housing Strategy in twin announcements in Toronto and Vancouver on Wednesday. The headline numbers are encouraging: a $40 billion spending plan, with a projected 100,000 units of new housing to be built over 10 years. The plan includes a portable housing benefit to help low-income Canadians afford shelter and puts housing co-operatives on a more solid financial footing, after years of uncertainty under Justin Trudeau’s predecessor.
All good things. All worthy. It’s genuinely heartening to have a federal government that takes housing seriously — and tens of billions of dollars is a serious commitment indeed. But parts of the plan are underwhelming, and the strategy leaves plenty of questions to answer at both the federal and provincial levels.
For starters, the strategy relies on billions in shared funding from provinces and municipalities. Anyone who’s been paying attention knows that neither Toronto (the city in Ontario with the most dire housing needs) nor the province has billions of spare dollars lying around. Will the city and/or province be able to come up with their share?
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Here, there’s reason for optimism — if only because the strategy defines that share pretty generously: “Contributions from other partners could include provincial, territorial and municipal lands, inclusionary zoning provisions, accelerated municipal approval processes, waiving of development charges and fees, tax rebates, and other government loans.” So it’s possible Toronto could meet its commitments under the plan without actually spending any new money, which is good, if the priority is getting federal dollars flowing. (City council talks a big game about housing but always quails when it comes to spending actual tax dollars.) The provincial situation is slightly better, but not much: the recent fall economic statement showed the Liberals walking away from the housing file.
Another big question: Why is so much of the spending going to wait until after the 2019 federal election? That includes not just spending on brick-and-mortar buildings (which takes time to ramp up), but also on the marquee item from this plan, the National Housing Benefit. It’s a substantial expansion of the federal social safety net — up to $2,500 annually for people in need — but voters are going to have to return the Liberals to government to see it.
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As for the underwhelming aspects of the plan: the pledge to build 100,000 housing units over a decade is… fine. It’s fine. But it’s not particularly historic. Greg Suttor, a researcher at the Wellesley Institute, determined that during the golden years of social housing (from about 1970 to 1990), Canada repeatedly built 25,000 new units per year, and consistently built more than 15,000. On average, the Liberal plan unveiled this week will — if everything goes right — build an annual 10,000 units, not all of which will meet everyone’s definition of “affordable.”
Our economy is much more robust now than it was in the ’70s and ’80s, and we’ve got more people to house. And yet the most ambitious federal housing policy in a generation — which this is — will still build fewer new homes than we did back when the hot new technology was the touch-tone phone.
That’s not entirely the Liberals’ fault. Any number of things have conspired to make it harder to build housing today than it was in 1970. Municipalities are more aggressive about planning control, the provinces spend less subsidizing necessary infrastructure, and both building codes and customers have raised the bar for the kind of new housing they’ll accept. But the feds need to deal with it, or accept that it’s going to be harder for everyone, government or otherwise, to collectively dig the country out of the current housing shortage.
One final disappointment is that some big things only the federal government can do are entirely absent from this plan. Housing advocates have been begging for developers to build more purpose-built rental projects instead of condos, but builders maintain that one of the biggest obstacles to new rental housing is federal taxes. The strategy proposes some programs that would spend federal money to encourage new rental housing, but no structural changes to the federal tax code that could make it easier to get developers building.
If you’re skeptical that more generous tax treatment for developers is the answer, it’s also worth noting that Ottawa isn’t taking British Columbia’s or Ontario’s lead by introducing anti-speculation measures. Earlier this year, Ontario’s Finance Minister Charles Sousa asked Ottawa to change its treatment of capital gains when people sell their second homes. So far, there’s no sign that the feds are considering it.
There’s nothing actively bad in the National Housing Strategy, and quite a lot of it’s good. And $40 billion wrapped up in a relatively coherent long-term plan is nothing to sneeze at — nor is the promised requirement that all federal governments maintain a housing plan going forward. But in the midst of a housing crisis that exists now, here, today, the plan Trudeau unveiled Wednesday puts too much spending past the next election, and leaves too many important questions unanswered and too much important work undone.