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Money comes with strings attached – such as zoning changes that allow uncontested construction of four-houses
Published on April 9, 2024 • 4 minutes reading time
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New homes are being built in a housing development in Ottawa's west end. Photo by Sean Kilpatrick/THE CANADIAN PRESS Files
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Last week, Prime Minister Justin Trudeau unveiled a $6 billion funding initiative aimed at addressing Canada's housing crisis by providing communities with funding to build the infrastructure essential to new developments. But the money comes with strings attached — such as zoning changes that allow uncontested four-house construction — and that's causing excitement in some provinces. The Financial Post's Shantaé Campbell explains the program and what's driving resistance in the province.
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What's in the fund?
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While detailed budget allocations for each year and province are still pending, Ottawa has announced the new fund will be split into two parts as part of the 2024 budget. The fund provides $1 billion for communities to address pressing infrastructure issues such as water, wastewater, stormwater and solid waste projects, directly helping to increase housing stock. Additionally, $5 billion is earmarked for provincial and territorial agreements to strengthen long-term housing priorities. Provinces must complete the agreements by January 1, 2025, and territories have until April 1, 2025.
So what's the catch?
Despite widespread recognition that we need to build more housing, some provinces, such as Quebec and Ontario, have resisted the plan because of the constraints involved. First, to access the fund, provinces must eliminate single-family home zoning and automatically grant permits for four-home construction, a process known as “as-of-right” zoning. This designation would mean that no special permits would be required to build a four-family home in a neighborhood currently zoned for single-family housing. The rules would also make it easier to build semi-detached houses, three-family houses, terraced houses and apartment buildings. The funding also includes a three-year freeze on development fees for cities with more than 300,000 residents.
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Why exactly are the provinces upset?
Ontario Premier Doug Ford during a housing announcement at Ottawa City Hall. Photo by TONY CALDWELL/Postmedia Files
Ontario Premier Doug Ford had previously rejected the idea of eliminating single-family zoning, and his office reiterated its commitment to local decision-making on zoning issues after the Liberal plan was announced. His office even went so far as to say that allowing four-family homes across Ontario was a “massive mistake.” Similarly, Quebec officials criticized the federal government's approach. They accused Ottawa of encroaching on provincial jurisdiction and called on the country to instead address issues such as immigration, which are under federal control. However, Housing Minister Sean Fraser has indicated that the federal government is willing to bypass provinces that do not agree to the terms of the fund and instead work directly with municipalities. This stance reflects previous tensions over housing policy, including over the Housing Accelerator Fund (HAF), which faced opposition from provinces and resulted in threats of legislative action.
What is the Housing Accelerator Fund?
In March 2023, Ottawa launched a $4 billion HAF as part of its $82 billion National Housing Strategy (NHS). The HAF's goal is to streamline construction processes to build 380,000 new homes over the next decade. It provides initial funding to accelerate construction and additional support after completion, but requires innovative proposals from local communities, such as accelerating projects, increasing housing density and promoting affordable housing units. The federal government has already concluded funding agreements with 72 municipalities. These regions have committed to zoning changes that increase density by allowing increased height, reduced parking requirements and immediate building permits for four-complexes. A number of Ontario communities, such as Toronto, Mississauga, Vaughan and Hamilton, already receive funding through HAF.
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If Toronto has already agreed to fourplexes, why is Ontario upset?
In 2022, the Ford government's More Homes Built Faster Act allowed up to three units to be built on residential lots zoned for one home. Instead of mandating sweeping zoning reform, such as “as-of-right” zoning across Ontario, Ford demonstrated a willingness to work with the federal government following Trudeau's recent announcement. However, he reiterated his position that planning decisions for fourplexes remain the responsibility of the city. Last month, Ford said a statewide fourplex policy was “off the table” for his administration and that certain residents opposed the idea of multiplexes in their neighborhoods. He said his administration's focus is on building single-family homes and townhouses. “I can assure you 1,000 percent, if you go into the heart of communities and build four, six and eight story buildings deep in communities, there will be a lot of screaming and yelling,” Ford said at a pre-budget news conference in Richmond Hill.
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