Federal government ties $6B infrastructure funding to housing reforms
Will the provinces say yes?
One of the recommendations of the cross-partisan Blueprint for More and Better Housing was that the federal government tie all funding for infrastructure, transit, and housing to provincial and municipal adoption of the following reforms. The goal is to make it easier to build infill housing where people want to live and where infrastructure already exists.
(a) remove unit maximums (they’re redundant)
(b) remove parking minimums (as Edmonton did in 2020)
(c) legalize construction of CMHC pre-approved designs by right
(d) adopt density permissions near transit similar to BC's
It’s basically a scaled-up version of the Housing Accelerator Fund carrot-as-a-stick approach.
Yesterday Trudeau announced that the upcoming budget will include a new $6B Canada Housing Infrastructure Fund, with $1B for municipalities and $5B for the provinces. The conditions for receiving funding are very similar to those recommended by the Blueprint. They’re also similar to what the BC government is doing.
A new $6 billion Canada Housing Infrastructure Fund to accelerate the construction and upgrading of critical housing infrastructure. This includes water, wastewater, stormwater, and solid waste infrastructure to support the construction of more homes. This fund will include:
$1 billion available for municipalities to support urgent infrastructure needs that will directly create more housing.
$5 billion for agreements with provinces and territories to support long-term priorities. Provinces and territories can only access this funding if they commit to key actions that increase housing supply:
Require municipalities to broadly adopt four units as-of-right and allow more “missing middle” homes, including duplexes, triplexes, townhouses, and other multi-unit apartments.
Implement a three-year freeze on increasing development charges from April 2, 2024, levels for municipalities with a population greater than 300,000.
Adopt forthcoming changes to the National Building Code to support more accessible, affordable, and climate-friendly housing options.
Require as-of-right construction for the government’s upcoming Housing Design Catalogue.
Implement measures from the Home Buyers’ Bill of Rights and Renters’ Bill of Rights.
Provinces will have until January 1, 2025, to secure an agreement, and territories will have until April 1, 2025. If a province or territory does not secure an agreement by their respective deadline, their funding allocation will be transferred to the municipal stream. The federal government will work with territorial governments to ensure the actions in their agreements are suitable to their distinct needs.
To access long-term, predictable funding for public transit through the federal government’s forthcoming public transit fund, municipalities will be required to take action that will directly unlock housing supply. This includes measures to:
Eliminate all mandatory minimum parking requirements within 800 metres of a high-frequency transit line.
Allow high-density housing within 800 metres of a high-frequency transit line.
Allow high-density housing within 800 metres of post-secondary institutions.
Complete a Housing Needs Assessment for all communities with a population greater than 30,000.
Besides the new infrastructure fund, Trudeau announced that the federal government is adding another $400M to the Housing Accelerator Fund, which is now fully allocated.
What happens next?
The next question is, how will the provinces respond? BC is supportive. Ravi Kahlon:
We welcome additional funding to support infrastructure tied to ambitious housing plans.
The goals align with what is already happening in B.C.
If other provinces don’t participate, we hope the allocated dollars flow to provinces that do.
So far it looks like Ontario isn’t on board:
Conservatives: fire the gatekeepers!
Also Conservatives: gatekeepers know best.
More provincial reactions, via Laura Stone.
Freezing development charges
One of the conditions for provinces to receive funding is that a three-year freeze on development charge increases as of April 2, for municipalities of 300,000 or more. This would presumably freeze the Metro Vancouver DCC increases planned for January 2025.
But BC wouldn’t be required to freeze the new Amenity Contribution Charges approved by Burnaby city council that are scheduled to take effect as of June 30 - Burnaby’s population is only 250,000. The DCC + ACC charges are about $40,000 per home, or an additional rent of $130/month using a 4% cap rate (roughly speaking, the rate of return): $40,000 x 0.04 / 12. These costs are passed on to homebuyers and renters for both new and existing housing. City of Burnaby page.
This has the biggest impact on the viability of low- and medium-density projects (which don’t have much land lift), so it seems likely that going forward, Burnaby will only be building high-rise projects.
One suggestion: to ensure that low- and medium-density projects (like multiplexes and small apartment buildings) continue to be viable, the province should set a base density below which ACCs are not charged.
Press coverage
Elizabeth Thompson, CBC. Federal government pledges $6B for housing in new infrastructure fund.
Ian Bailey, Laura Stone, and Oliver Moore, Globe and Mail. Trudeau announces $6-billion housing program ahead of federal budget.
Rachel Aiello, CTV News. Canada to launch $6B housing infrastructure fund, will need provincial buy-in.
Nojoud Al Mallees, Canadian Press. Ottawa to launch $6B infrastructure fund to help build homes - with strings attached.
Kenneth Chan, Daily Hive. Trudeau offers $6 billion infrastructure cash for housing density program.
Howard Chai, Storeys. Trudeau announces new $6B housing infrastructure fund.
Video of the press conference on CPAC.