Poilievre’s housing plan short on details

Opinion

Hey there, time traveller!
This article was published 12/09/2023 (748 days ago), so information in it may no longer be current.

On Saturday, Conservative Leader Pierre Poilievre did something new: instead of merely attacking Prime Minister Justin Trudeau for Liberal policies, he actually offered up some policies of his own.

Though the hour-long speech to the Conservative Party of Canada convention did mention Trudeau’s name 50 times — close to once a minute — there was a bit more substance than usual. In other words, the CPC leader talked about the direction the Tories would take should they get to form government after the next federal election. (So far, the policy platform has leaned on buzzwords like “getting rid of the gatekeepers,” without really spelling out who was to go, what red tape was to be removed, and how particular changes would help Canadians.)

Perhaps the clearest policy points involved housing.

Poilievre says his government would drive a rapid growth of housing, making it possible for Canadians to afford to buy homes.

Part of it involves federal property.

As Poilievre put it, “I will sell off 6,000 federal buildings and thousands of acres of surplus federal land so we can build, build, build.”

It may be a common-sense plan, but economics are anything but simple.

What really hurts homeowners with big mortgages is volatility: the things they didn’t prepare for when they struck a deal to buy their property. After all, reasonable Canadians spend a considerable amount of time deciding what they can manage when it comes to a major investment like a home: they look at price, their ability to pay, the size of monthly or biweekly mortgage payments, household expenses like insurance, heating and municipal taxes and try to calculate not only where they stand at the point of buying a house, but what might happen in the future.

A rise in interest rates can upset the applecart when mortgages have to be renewed, but so can a drop in house prices: people renewing mortgages when house prices drop can actually be required to find new equity to make up for the loss of value of their asset. A drop in interest rates can drive housing prices up, because new players are able to buy and make their way into the market, increasing demand.

But that’s just the start: there are many levers that affect the economy, and they all connect to the same machine.

Bringing 6,000 federal properties to market will certainly make things volatile, especially if there’s no restrictions on the use of that land, or what might be built there.

There’s also the question of value for money: at the current level of interest rates, the only people likely to be ready to buy up surplus federal buildings and land are those who already have cash in hand. The law of supply and demand would suggest that, with bountiful supply of federal land on sale and limited numbers of people in a financial position to buy it, the price the federal government can expect to receive would not be top dollar.

In a back-door way, that would mean the Canadian taxpayer would be giving a hidden and untaxed benefit to developers and investors who simply might want to buy, flip or hold property to sell later at a profit — unless, of course, some gatekeeping rules and conditions are attached to the land sales.

That being said, it’s nice to see some semblance of a policy — something beyond “it’s Trudeau’s fault, it’s Trudeau’s fault, it’s Trudeau’s fault” — from Pierre Poilievre.

But right now, “I’d sell off federal land” reads more like a back-of-an-envelope scratch note than well-thought-out economic policy.

As always, the devil is in the details. Let’s have those, too. Lots of them.