Man, last week was a flurry of activity as far as the housing market news cycle was concerned. It all started with a feel good moment in good old London, Ontario where the Liberals were apparently taking refuge from a summer session and decided to “get real” about their recent performance in some polls. Oh and to address their failure to accomplish anything meaningful as far as the housing market, affordability, construction et al.
Last week, the announcement was made that the City of London would be the first municipality in Canada to access funds from the $4B pool of money that the Liberal government set aside as the “Housing Accelerator Fund”. This fund was built into the 2021 federal budget but was only recently opened up for applications, none of which had been accepted until now. So now, $74M of federal funding is coming to the City of London… for what? This money is from the Housing Accelerator Fund, not the Housing Fund. Meaning, this money is primarily meant to cut out red tape at the municipal level and decrease the difficulty and time required to build housing. This money is not set aside for the City of London to jump in and build houses for Londoners.
Then what exactly will this money be used for? Based on an interview with Mayor Josh Morgan earlier this week, it seems like the City of London will be using this money to hire more staff to wade through the endless stream of building applications, increase the efficiency of staff, streamline processes, exploring partnering with non profits to build affordable and transitional housing, and finally, exploring the use of city owned land in the downtown area for high rise construction.
I will say this, I believe that this money is an absolute blessing and a curse. The City has a massive responsibility to use this money for the betterment of all Londoners and to achieve something meaningful as far as housing is concerned. If there are not measured and impactful results that come from this, I would consider it a massive failure by our local government.
The very next day, Trudeau announced that the federal government would be scrapping the GST on new rental apartment buildings to help accelerate the development of rental stock in our country. Good ol’ Dougie jumped on board that same day to say that the Ontario government would similarly waive the rest of the sales tax on these very same builds making it a tax free investment to build new rental units in Ontario. What an exciting announcement this was, and something that has the potential to really help promote development in Ontario and ease the supply constraints in the rental market.
But wait a minute! It turns out that Justin wasn’t really the real originator of this idea. Mere hours before Trudeau made that announcement, his Conservative counterpart, Pierre Poilievre, had already made an announcement with his own ideas for a new national housing strategy, one that also included removing the tax on new rental units at below market rents. So it would appear that Mr. Trudeau just took this idea and made it his own? It’s like in grade 5 when you asked your friend to copy their homework and they said ”sure, just change it a little so we don’t get caught”. You can’t write this stuff folks, it‘s just good entertainment!
I would argue that the timing of these announcements was no doubt pre meditated, at least on behalf of the Conservatives who wanted to get a jump on the Liberals and then point the finger at them as copycats. Nonetheless, it’s not a good look for Trudeau at a time when his Liberal party is lagging in the polls so badly.
Fast forward to this week and Poilievre has introduced a housing Bill that is apparently unlikely to pass, all in the name of getting more municipalities to build more housing, faster. Where have we heard those words before? It’s like these guys all have the same copywriter that is just recycling nonsensical rhetoric. Anyhow, Pierre wants to reward municipalities that meet or exceed housing targets with extra funding (repurposed from the Housing Accelerator Fund) but also to punish any municipalities that don’t hit targets or outright block development by withholding infrastructure money. Very interesting. All these Feds continue to point the finger at municipalities as a means to distract from their own failure to generate positive momentum in housing development.
Wow what a shit show this is. Will any of this talk generate results? I’m extremely sceptical of any major announcements or promises made by our federal government as it pertains to housing. The timing is too suspect, too late and not forceful enough.
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