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Housing Accelerator Fund: the details
$20,000 per additional home
A local government which makes policy changes projected to increase housing supply over the next three years can apply to receive $20,000 per additional permitted home, with payments to be made annually, “subject to satisfactory progress reviews.”
Within the action plan submitted as part of the application for HAF, the applicant will be required to provide two projections to CMHC as outlined below. The applicant must calculate their own projections based on reasonable assumptions and data sources, including Statistics Canada and/or its own administrative data . There is no prescribed formula; however, projections should be based on a three-year period ending September 1, 2026.
The total number of permitted housing units projected without HAF.
The total number of permitted housing units projected with HAF.
This second projection is what is referred to as the “housing supply growth target.”
Policy changes which were already planned don’t qualify.
I’m curious how CMHC will assess these projections and do the progress reviews. There’s policy changes that seem likely to increase housing supply, but how do you calculate what the likely impact is going to be? If you look at housing permits after a year or two, how do you disentangle the effects of the policy change versus changes in the broader economy? (Research in this area relies on “natural experiments” where there’s some randomness which you can use to assess the importance of a particular factor.)
I’m also struck by the fact that there’s no explicit targeting of areas where housing scarcity is worst and prices are highest - especially Ontario and BC. The only mention of geographic targeting is a note at the bottom of Table 1: “CMHC will consider take-up across jurisdictions and may adjust application rankings to support a national distribution.” This seems more likely to be about balancing regional interests.
The guide provides a long list of potential initiatives to increase supply, presumably based on both CMHC expertise and public consultation.
Allowing gentle density in residential neighbourhoods:
Allowing increased housing density (increased number of units and number of storeys) on a single lot including promoting “missing middle” housing forms typically buildings less than 4 stories
Promoting infill developments (adding new units to existing communities) with increased housing density and a variety of unit types (e .g ., duplexes or secondary suites)
Reducing and streamlining urban design and character guidelines, i.e., elimination of height restrictions, visual character requirements, view cones, setbacks, etc.
Promoting high-density development without the need for rezoning (as-of-right zoning), e .g ., for housing developments up to 10 stories that are in proximity (within 1.5km) of rapid transit stations and reducing car dependency
Enable mixed-use redevelopment of city-owned properties, while where appropriate maintaining the current government use, e .g., building housing on top of a library or office space
Reducing costs and streamlining processes:
Implementing revised parking requirements such as reduced or eliminated parking spaces for new developments
Ensuring that development and amenity charges – fees that cover necessary infrastructure to support new housing and amenities such as libraries and recreation centres in and adjacent to the communities where development is occurring – are clear, transparent and pre-determined (not subject to negotiation)
Implementing changes to decision making such as delegating development approval authority to municipal staff based on established thresholds or parameters
Implementing new/enhanced processes or systems such as case management, e-permitting, land and building modelling
Encouraging alternative forms of housing construction such as modular housing, manufactured housing, and prefabricated housing
Implementing incentives, costing or fee structures, for example density bonusing, to encourage such things as affordable housing and conversions from non-residential to residential
Promoting regulated multi-tenanted housing forms (e.g., boarding houses or single room occupancy)
Create a process for the disposal of city-owned land assets for the development of affordable housing as-of-right (not requiring rezoning)
Waiving public hearings on all affordable housing projects that conform to the official community plan
Partnering with non-profit housing providers to preserve and increase the stock of affordable housing
There’s a handful of ideas that I’d describe as popular, but that don’t seem likely to increase supply:
Implementing inclusionary zoning (the requirement that a developer builds a certain percentage of their units at affordable (below market) prices or rents in ways that foster development. [This is a significant in-kind development charge, which reduces the number of economically viable projects. Without density bonusing to compensate, this will slow down supply rather than accelerating it.]
Implementing rental only zoning. [People are willing to pay more for condos than for rentals, and so this again reduces the number of economically viable projects.]
Implementing land use changes mandating a minimum number of family units (units with more than two bedrooms) or allowing for office conversions to residential with minimum family unit requirements. [The North American requirement for two exits - everywhere except Washington state - means that apartment buildings tend to be thick, to reduce the overhead of the central hallway and two exits. You get a narrow “bowling alley” layout with the hallway at one end and the windows at the other end. This means that providing each additional bedroom, which has a window, requires a lot of expensive floor space: you’re not just adding the bedroom, you’re adding add all the space between the window and the hallway.]
Implementing measures to address or prevent flood plain or climate change risk for example making flood plains park land and/or creating relocation programs to move housing units out of at-risk areas
Incorporating a climate adaptability plan into Official Community Plan
On the spending side, there’s another list of permitted spending, which seems quite flexible. It includes implementation of Housing Accelerator Fund actions, investments in affordable housing, and investments in infrastructure, with infrastructure covering a wide range of domains.
The applications would be prioritized based on evaluation criteria (scoring) described in Section 9.
Housing Accelerator Fund - CMHC page.
Large/Urban Stream. See the Pre-Application Resources section.
To reduce expectations a bit: Noah Kazis observes that state-level zoning incentives in the US turned out to be insufficient on their own. You need sticks (in the form of provincial overrides or mandates) as well as carrots. Twitter thread.
Odd Lots podcast episode with Bobby Fijan and Stephen Smith, explaining the impact of the North American two-exit requirement on apartment floor plans.