The Housing Crisis… Solved or What?

The cost of housing in Toronto has exploded in recent years. The median house price has gone from under $600,000 in 2010 to over $1.1 million in 2023, putting the dream of home ownership out of reach for many people. For the past eight years, the Trudeau government has been criticized for not doing enough on the issue of housing affordability. Recently, however, they’ve announced changes in housing policy, aimed at combating the crisis.

On July 26, 2023, Trudeau shuffled his cabinet, putting Central Nova MP Sean Fraser in charge of housing. As housing minister, Fraser has been proactive. He’s called out municipalities for their restrictive zoning laws, which don’t allow high-density housing to be built in many places. He, along with the Liberal government, have also announced new pieces of legislation to increase housing supply.

The first of those came on September 14, 2023, when it was announced that the GST (goods and services tax) would be removed from the construction of new rental properties. By making housing construction cheaper, this move sought to incentivize developers to move back into the rental sector, which many have fled from in recent years.

Another new government initiative, announced this March, is the Housing Accelerator Fund (HAF), a $4 billion program that gives money to municipalities to build homes. It aims to build 100,000 new homes by 2025, mainly by helping to fast-track approvals and remove regulations. Cities with more than 10,000 people can apply to get money, but the funding is conditional; they must show a willingness to build more housing to get accepted.

Measures cities can take to increase their chances of approval were outlined in guidelines that the government published last month. Among other policies, they can legalize housing by loosening zoning laws, make city lands available for housing, loosen parking space requirements, and remove height restrictions.

These are tough sells for historically NIMBY (not in my backyard) municipalities. However, at a time when many cities are strapped for cash, applications have been competitive. The first deal involving the HAF was with the city of London, and was approved in September. In exchange for $74 million to build 2,000 housing units, London agreed to allow for high density housing without the need to rezone, and to also allow four units to be built on one property. Since then, the government has announced deals with numerous cities, including Halifax, Calgary, Vaughan, and Hamilton.

One of the cities missing from that list is Toronto. Toronto’s application, which Mayor Olivia Chow oversaw personally, is still being considered by the federal government. If it’s approved, it would be a big help to Toronto’s housing plans. The city intends to build around 65,000 rent controlled homes, but much of that is reliant on funding from the provincial and federal governments.

Citations:

“Housing Accelerator Fund.” The Atmospheric Fund, The Atmospheric Fund, taf.ca/housing-accelerator-fund/#:~:text=The%20Housing%20Accelerator%20Fund%20. Accessed 22 Nov. 2023.

Hashizume, Ken. “Trudeau in Guelph to Announce $4 Billion Housing Accelerator Fund.” Global News, Global News, 17 Mar. 2023, globalnews.ca/news/9560406/trudeau-guelph-housing-accelerator-fund/.

Zhang, Andre. “The Housing Crisis.” Andre’s Substack, Substack, 27 Oct. 2023, https://ondray.substack.com/p/the-housing-crisis. Accessed 22 Nov. 2023.

“Removing Barriers to Build More Homes, Faster in London, Ontario.” Prime Minister of Canada, Government of Canada, 13 Sept. 2023, www.pm.gc.ca/en/news/news-releases/2023/09/13/removing-barriers-build-more-homes-faster-london-ontario#:~:text=The%20Housing%20Accelerator%20Fund%20helps,Indigenous%20communities%20across%20the%20country.

“Trudeau Announces New Measures to Deal with Housing, Grocery Prices | CBC News.” CBCnews, CBC/Radio Canada, 15 Sept. 2023, www.cbc.ca/news/politics/liberals-gst-rental-apartments-1.6966608.

Stober, Eric. “GST Removal on Rental Builds Won’t Lower Prices Any Time Soon, Experts Say - National.” Global News, Global News, 15 Sept. 2023, globalnews.ca/news/9964405/gst-rentals-canada-housing/.

“What Is the Housing Accelerator Fund?” The Globe and Mail, The Globe and Mail, 20 Sept. 2023, www.theglobeandmail.com/politics/article-liberals-trudeau-housing-accelerator-fund/.

The Canadian Press. “Feds Unveil First Deal for New Housing Accelerator Fund in London.” Yahoo! Finance, Yahoo!, 13 Sept. 2023, ca.finance.yahoo.com/news/trudeau-expected-meet-mps-london-080000867.html.

Vega, Manuela. “How Expensive Has Toronto Housing Become? Take a Look at Today’s Reality Compared to the Boomer Buyers of 1990.” Toronto Star, Toronto Star Newspapers Ltd., 1 Oct. 2023, www.thestar.com/real-estate/how-expensive-has-toronto-housing-become-take-a-look-at-today-s-reality-compared-to/article_04533f63-c208-5ea3-99f5-8d397fb98c98.html.

“Toronto’s New Plan to Build 65,000 Affordable Housing Units Hinges on Billions in Provincial, Federal Funding | CBC News.” CBCnews, CBC/Radio Canada, 24 Oct. 2023, www.cbc.ca/news/canada/toronto/toronto-affordable-housing-plan-1.7006164.