Ottawa’s rushed offer of housing funds too important to pass up

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This article was published 17/11/2023 (736 days ago), so information in it may no longer be current.

It’s unlikely the billions of dollars the federal government is offering Canadian cities to boost housing density in mature neighbourhoods will be available again any time soon.

Winnipeg has to decide whether it wants a piece of Ottawa’s new Housing Accelerator Fund or risk losing out on as much as $192 million. It has to decide soon — like, next week.

There’s no time for the usual Winnipeg ruminations, like drawn-out debates over tearing down an old, empty department store to build a state-of-the-art entertainment facility, or removing barriers at a major intersection so people can cross the street (or if you want to go back further, temporarily removing a dozen trees to support a movie shoot in the Exchange District).

A decision on HAF must be made Thursday at city council’s next meeting.

What the federal government is offering is simple: if a city agrees to change its bylaws to allow for greater densification of older neighbourhoods — including more fourplexes and mid-rise housing near major transit routes — Ottawa will provide tens of millions of dollars to help subsidize those developments.

It would not mean, as some have falsely suggested, that there would be no rules around where such multi-family units could be built. There would still be conditions, such as minimum lot sizes, setback requirements and height restrictions. However, eliminating “exclusionary zoning” would mean builders would no longer have to apply for variances in those cases and the public would lose the input they now have on individual projects.

A proposed infill would be “as-of-right,” the term used to describe the quid pro quo other major cities have already accepted to access the federal cash.

It’s a take-it-or-leave it offer cities will not likely see again for years, if ever.

Why is this being rushed? Federal politics. The Liberal government in Ottawa is getting hammered in public opinion polls and Prime Minister Justin Trudeau is desperate to try to turn his political fortunes around. One of the areas where the Liberals are seeking traction is on Canada’s housing crisis, including the need to build more affordable, multi-family units in mature neighbourhoods.

It’s a response, at least in part, to federal Conservative Leader Pierre Poilievre’s pledge to eliminate the so-called “gatekeepers” he claims are preventing new housing from getting built. Under Poilievre’s plan, cities would be penalized financially by the federal government if they failed to boost housing by 15 per cent a year, while offering cash incentives to cities that exceed that benchmark.

The Liberals first promised a cash-for-housing program during the 2021 federal election campaign. But HAF wasn’t launched until early this year. Cities applied for the money over the summer. Many, including Winnipeg, have been asked by Ottawa to “strengthen” their applications by allowing more “as-of-right” multi-family units.

Not every city will get the cash. The federal government has made it clear there is a limited pot of money — $4 billion — and only the “best” applications will succeed. If Winnipeg’s application falls short, it risks losing out on the funding. Meanwhile, other cities continue to sign deals. Calgary announced Tuesday it’s getting $228 million from the fund.

If all this seems like the federal Liberals are holding a gun to the heads of city mayors to further their own political agenda, it kind of is. But that’s sometimes how high-level politics works. It may not be the ideal way to set housing policy. However, for Winnipeg, there is potentially $192 million on the table that could disappear in the blink of an eye if it rejects HAF.

That money would not likely return under a government led by Poilievre (whose housing policy is more stick than carrot), should the Conservatives win the next federal election. It is, at the very least, a risk cities such as Winnipeg are reluctant to take.

The HAF money could be spent on many things, including subsidizing desperately needed affordable housing, paying for related infrastructure to support densification and to secure land needed for mid-rise buildings.

Under Winnipeg’s proposal, which was approved by executive policy committee Tuesday, 5,277 local housing units would be added by 2026, including 1,342 with rent — based on a yet-to-be-determined formula — set at “affordable” below-market rates. If it’s approved by council, city administration would begin drafting related bylaws, which would be subject to public consultation.

If Thursday’s motion goes through and Ottawa accepts Winnipeg’s application, money could start flowing within weeks.

HAF is, by no means, a panacea to solve Canada’s housing crunch. But it may be the kind of jump-start cities such as Winnipeg need to help densify existing neighbourhoods, expand the tax base and counter the effects of urban sprawl.

There is an upside to this rushed and even haphazard approach to policy-making: it forces cities to adopt new policies that, while imperfect, may be the kind of jolt they need to overcome inertia, particularly in a naval-gazing city such as this one.

If city council attempted to adopt this type of as-of-right change to zoning without the cash-impetus from Ottawa and the rushed timeline, it would probably never get it done. Winnipeg doesn’t like change and often looks for 1,000 reasons not to embrace it.

This may be just what the doctor ordered to break that cycle.

tom.brodbeck@freepress.mb.ca