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Cities also need to relax their zoning guidelines to access $4 billion in housing funds, according to Sean Fraser
Published on January 18, 2024 • 3 minutes reading time
Homes under construction in Ottawa. Photo by Sean Kilpatrick/The Canadian Press
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Canadian cities will have to relax their zoning guidelines if they want to use billions of dollars in federal funds to build new homes. That was one of the messages federal housing minister Sean Fraser delivered to a lunchtime audience at the Empire Club of Canada in Toronto on Jan. 17. Here are three key takeaways from the event.
Open zoning to access funds
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In March 2023, the federal government launched the $4 billion Housing Accelerator Fund to accelerate the construction of at least 100,000 new homes across the country by 2024-25. On Wednesday, Fraser sent a message to communities trying to access this support.
“If you want to use the fund, be more ambitious than your neighbors,” Fraser said. Be more ambitious, especially with zoning.
If you want to tap the fund, be more ambitious than your neighbors
Sean Fraser
The Canada Mortgage and Housing Corp. – the fund's administrator – has made eliminating exclusionary zoning an important best practice for successful applications. This means eliminating low-density zones and regulations that restrict affordable and social housing in residential areas. Instead, the agency suggests the focus should be on mixed-use developments and high-density housing projects near urban cores and transit corridors.
Fraser told the audience that he has noticed a sudden shift in cities' attitudes toward zoning reform due to increased competition for funds, which has led to greater openness to change, although some regions continue to resist.
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“There are cities that don’t get funding because they don’t want to end exclusionary zoning in Canada,” Fraser said. “I know who some of them are, and maybe they’ll change their behavior.”
Immigration is part of the solution
Fraser acknowledged that high immigration rates have exacerbated Canada's housing crisis, particularly in the fall when hundreds of thousands of international students arrived for school.
Some, he said, were coming to institutions that were exploiting the international student program to gain financial benefits and the government needed to address this.
Federal Housing Minister Sean Fraser. Photo by Darren Calabrese/The Canadian Press
“I think there are bad actors in this space who are looking to personally profit on some occasions under the false promise of permanent residency for students where that will not be the case,” Fraser said. “A scenario has emerged in which several 100,000 additional people came to Canada, sometimes under false pretenses. This is a challenge that we must rise to.”
But building more homes and immigration go hand in hand, he said.
“We also need to continue to leverage targeted immigration programs, including some changes we have made to the Express Entry system, to provide an opportunity for talent in the skilled trades where there is a shortage in Canada to come to Canada and contribute “Bring your talents to our communities,” Fraser said.
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Last summer, the National Housing Accord proposed a strategic plan to address Canada's housing crisis. The “blueprint” recommends an immigration plan to attract workers and an innovation strategy to accelerate housing construction to address rising rents and property prices.
On the way to mass production
Even when considering housing solutions, Fraser looked to both the past and the future, pointing to factory-based mass production as an option that needed to be explored.
“The reality I see when I talk to people in communities is that if we continue to build houses like we have done for the past century, we will never get out of the situation we are in now,” said Fraser.
Regional development agencies could be encouraged to help expand existing factory production, but that alone was not enough, he said.
“When I talk to people in the industry, they tell me they need consistent demand. They need to know that if they make the investment to build this factory, are they going to get contracts that justify the investment that they're making,” Fraser told the audience.
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A month ago, Ottawa announced plans to begin consultations in early 2024 on a catalog of pre-approved designs to speed up construction of multiplexes and senior and student housing.
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The plan reflects a post-World War II federal policy that used simple plans to speed construction of desperately needed homes.
“We also believe this will reduce the barriers to entry for smaller market players who may want to avoid the cost of an architect for the first four-family home they are building as they begin building homes and contribute solutions,” Fraser said.
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