Prime Minister Justin Trudeau announced that London, Ont., is the first city in Canada to reach a deal with his government under the Housing Accelerator Fund.
He says the deal will create 2,000 new homes in the city over three years.
“This landmark agreement with London will be the first of many, and we look forward to working with all orders of government to help everyone find a place to call their own,” Trudeau said in a statement.
London Mayor Josh Morgan said he wants the city’s agreement to set an example for the rest of the country when it comes to building housing units.
“This is the most significant housing and housing-related infrastructure investment in London’s history,” said Morgan, thanking his staff and council for their work on the deal.
Morgan added that on top of the 2,000 homes the fund will help build over the coming three years, it will also help facilitate the construction of thousands of additional housing units “in the years to come.”
The Housing Accelerator Fund, first announced during the 2021 election campaign, and introduced in the 2022 federal budget, allocates $4 billion in funding until 2026-27 to prompt more homebuilding in cities.
The agreement with London will see the city get $74 million in funding, allowing it to approve high-density developments without the need for rezoning, a statement from the prime minister’s office said.
The statement said the money will help the city:
The Liberal government says the Housing Accelerator Fund’s objective is to build 100,000 more housing units across the country than what would have been built without the fund by streamlining land-use planning and development approvals.
Municipal governments with a population of more than 10,000 apply to take part by pitching initiatives that will increase the annual rate of home building in their cities by at least 10 per cent.
The PMO statement says the fund encourages cities to build high density apartments around public transit to help seniors, students and families.
After announcing the deal Trudeau issued a challenge “to mayors right across the country to step up with their proposals to so we can get building more homes, increasing supply and lowering the prices for families,” he said.
Trudeau and his government have faced increasing pressure in recent months to deliver a response to the ongoing shortage of housing across the country. That pressure increased late last month after the Liberal cabinet retreat in P.E.I. ended without the announcement of new measures to tackle the crisis.
Earlier Wednesday, Housing Minister Sean Fraser told reporters that when his government came to office in 2015, the housing shortage overwhelmingly impacted low-income families but the situation has now “fundamentally shifted.”
He said the crisis is now hitting Canadians with variable-rate mortgages, who have seen their payments dramatically increase with the rise in interest rates, prompting a need for a “renewed focus” to address the crisis.
“It’s looking to build homes, not just for low-income Canadians in affordable housing projects, but across the housing spectrum,” he said.
Conservatives were quick to take aim at the Liberals following Wednesday’s announcement. The party released a statement suggesting Liberal housing policies have “failed” thus far.
“It appears that members of the Liberal caucus are just now starting to notice what their constituents have been facing,” the statement said.
The Liberals’ announcement comes as the Canada Mortgage and Housing Corporation (CMHC) released a new report estimating how many units are required to make housing affordable again.
The CMHC Supply Gaps Estimate report said another 3.5 million housing units are required by 2030, over and above the number of units expected to be built by that time, in order to restore affordability to 2004 levels.
The report updates the CMHC’s initial assessment from June 2022, when the housing agency said that gap was slightly higher, at 3.52 million housing units.
That report said that in 2003-2004, an average household in Ontario spent about 40 per cent of its disposable income to cover the annual costs of owning a house, while that figure was 45 per cent in B.C. By 2021, that had risen to 60 per cent.
The CMHC said while incremental progress has been made since last summer, housing in Ontario and B.C., where two-thirds of the 3.5 million extra homes need to be built, is not affordable.
The renewed focus, Fraser said, would not contain a “silver bullet” but would require all levels of government, the private sector and the non-profit sector to work together.
It would also require measures that tackle some key problems, including:
Fraser also said measures will have to be taken to “grow the productive capacity of the workforce” by training Canadians to work in construction, and by recruiting newcomers with much-needed skills.
“We’re going to be looking at everything we can do to build homes more quickly so we can make homes affordable for ordinary people,” he said.
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