Trudeau wants to bribe cities to build housing. He should bribe provinces instead

OPINION: The Liberal party’s housing platform includes $4 billion for cities to get more housing built. That money could be better spent
By John Michael McGrath - Published on Aug 24, 2021
Prime Minister Justin Trudeau speaks during a press conference at an under-construction affordable-housing complex in Hamilton on July 20. (Cole Burston/CP)

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The federal Liberal party’s housing platform, released Tuesday morning, is a grab-bag of ideas: some have merit (introduce a federal agency tasked with investigating money laundering in the housing market); others not so much (the criminalization of blind bidding would face a rocky journey through the courts). A few align with proposed Conservative policies: supporting the conversion of unused office space into new homes, for example, appears in both parties’ platforms. But the biggest single-dollar figure in the backgrounder provided by the Liberal party is earmarked for something novel: bribing cities to get more housing built.

They don’t call it that, naturally — that would be too vulgar. But there it is, number one on their list of proposed policies to build more homes: “Make $4 billion available to challenge the country’s largest cities to accelerate their housing plans, creating a target of 100,000 new middle-class homes by 2024-25.” That’s an effective subsidy of $40,000 per unit built, so one would hope that would move the needle somewhat in terms of speeding up approvals.

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The problem for the Liberals is more or less the same one Sidewalk Labs faced when it tried to sell Toronto on its vision of a city of the future on the waterfront: it’s actually really hard to get cities to buy into things they don’t want. And, to put it concisely, cities don’t want even more housing than they’re already building — certainly not if it would mean shortened approval timelines or fewer public meetings during which local busybodies get to exercise their right to scream about increased shadows or traffic or the unbearable noise of children being dropped off at daycare.

Would billions of dollars change the minds of city councils? Maybe. But there’s good reason for skepticism: $4 billion over four years divided among the dozen or so largest municipalities in the country — the ones sitting at the most critical chokepoints for new housing supply — simply wouldn’t add up to that much for any one council’s budget. And that’s before we face the bleak fact that our cities are as exclusionary as they are because municipal voters value that exclusion and vote with that in mind. A city councillor who took federal dollars to accelerate housing approvals in their city could still find themselves out of a job in the next municipal election.

Which isn’t to say the fundamental concept is unsound; it’s just poorly targeted. There’s an order of government that has even more control over land-use policy than municipal councils do, would be happy to take billions of dollars in federal cash, and is politically more insulated from the reactionary forces that dominate municipal politics. They’re called “provinces,” and the federal government should try bribing them instead.

The logic here is pretty simple: municipalities have only as much power to approve new housing as a provincial legislature gives them. In Ontario, the powers of the city are defined by such things as the Planning Act, the Municipal Act, and the City of Toronto Act. If the federal government believes that meaningful amounts of new housing can be accelerated by encouraging faster approvals, the province can do the work of cutting through red tape at least as well as municipal councils can — and almost certainly better.

This could look like a minister making eager use of zoning orders, the way Minister of Municipal Affairs and Housing Steve Clark has. Or it could look more like what the Green party has proposed in its provincial housing platform, which features broadly more liberalized planning rules. But from the federal perspective, the virtue would be that, instead of trying to sign agreements with a dozen or more municipalities (and crossing your fingers they live up to their side of the bargain), you’d need only to sign agreements with two or three provinces to tackle the most problematic housing markets in the country.

There’s a more subtle reason negotiating with the provinces might be more productive. To put it briefly (this column is already approaching the word count that makes my editors cranky), the federal and provincial governments basically agree that more people and more jobs are good things to have in Canada. The biggest municipalities … don’t. Or at least, not until after prolonged arguments of precisely the kind that drag out approvals or create large fees and surcharges that increase costs for new buyers. It’s easier to get an office tower approved in Toronto than it is an condo tower — the city isn’t as hostile to jobs as it is to homes — but it’s harder to get either approved than it would be if cities were as enthusiastic about economic growth as the higher orders of government are.

So if they’re re-elected as the federal government, the Liberals should stick with the spirit of this idea, but, instead of trying to bribe recalcitrant municipalities into getting new homes built, they should bribe the provinces instead. They’ll find governments who already agree with them about the problem, and they might be cheaper dates in the end, too.

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