National AffairsPolitics

Trudeau’s grand plan won’t solve housing crisis

By David Olive / National Affairs

Justin Trudeau is not going to solve the housing crisis.

He can’t do it on his own and he can’t seem to recruit the necessary collaborators among Canadian governments to get it done.

For several weeks, culminating in an ambitious set of federal housing initiatives announced last Friday, the prime minister and his cabinet colleagues have crossed the country announcing housing initiatives.

Last Friday, the feds promised to “solve” the crisis, vowing to build “almost 3.9 million” homes by 2031.

But labour shortages in the construction industry, provinces balking at Ottawa’s intrusions on their turf, and the Trudeau government’s inability to deliver on past housing promises suggest that goal won’t be achieved.

Assessing today’s announcement, TD Economics, for one, shrugged and said it “will likely have a limited impact on the housing market.”

Because housing is a municipal and provincial responsibility, their participation is required for Trudeau’s initiatives to work.

And that necessary buy-in is lacking.

To the contrary, Ontario, Quebec, Saskatchewan and New Brunswick have already objected to Trudeau housing plans that they regard as meddling in their jurisdictions.

Alberta Premier Danielle Smith is proposing a law to prevent Alberta municipalities from accepting federal housing assistance without her permission.

Smith says Ottawa should stick to “national” issues.

As if the housing crisis isn’t one of the biggest national crises we’ve faced.

But Smith is right in saying Ottawa’s necessary negotiations with a multitude of municipalities, provinces and territories to get more housing built is going to be cumbersome.

And with his low poll ratings, Trudeau has neither the bully pulpit to rally the public to his “call to action” today on housing nor the backroom powers of persuasion to bend other leaders to his will.

This is not the federation that worked harmoniously in coping with the COVID-19 health emergency. We’re back to business as usual, with pointless sparring matches among governments.

It’s worth recalling how we got here.

The housing industry for decades did not produce enough new homes. And, following market dictates, it built the wrong kind of housing: monster houses and luxury condos for the comfortable, and few of the less-profitable low-cost housing units that we desperately need.

Veteran housing advocates know that Canada has never had sufficient housing. Lately they have been joined by business leaders concerned about housing. Their customers and employees are struggling with a cost-of-living crisis largely driven by soaring prices for shelter. That has cut heavily into consumer spending.
The housing shortage is bad for business.

Reform of the housing industry, one of our biggest economic sectors, is long overdue.

And we have been here before, with government incentives that directed developers to create abundant affordable housing to accommodate the 1960s and 1970s waves of immigration.

So, we can do this. We can better align Canada with international rights law that mandates adequate housing as a basic human right. In fact, maintaining the country’s dignity requires it.

Our mounting concerns about homeless encampments, young marrieds who cannot start a family because they can’t afford a so-called starter home priced at $800,000, and newcomers living three families to an apartment have brought us to this point of needing rapid and forceful action to solve the crisis.
This space is averse to radical actions.

But Medicare was radical, as so many of our American friends still believe it to be.

“The housing crisis is a planning crisis,” CIBC economist Benjamin Tal said in a February report on housing.

He’s right: We can’t solve the crisis because of the inability of the parties to properly plan where and what to build.

In the absence of a master plan, we have interjurisdictional disputes. They include the current war of words between Ottawa and Ontario over housing targets that is holding up $357 million in federal money for affordable housing construction.

We could start by estimating the total cost of providing those 3.9 million new homes, including water mains, power lines and other infrastructure.

And then decide, according to a master plan, who’s going to pay for them, where they will be built, and the mix of housing types to be constructed.

And the feds could provide a good deal of that housing themselves, with their own money and underused federal land, much of it in urban centres. That would get around balky jurisdictions.

Of course, some provinces would see that as heavy handed. But observing the feds in action on federal land in their jurisdictions, they’d have the option of signing on rather than having no say.

One thing we be sure of in this moment still lacking sufficient urgency is that our children will not look back a decade from now and say that the spring of 2024 was the turning point in the housing crisis.

Indeed, at this rate, they still won’t be able to afford a starter home in 2034.

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