Poilievre to withhold federal funds from cities that don't build enough housing

Apr 26 2022, 3:28 am

If elected as Prime Minister, Pierre Posilievre would withhold federal funding from municipal governments that do not catalyze and approve enough housing.

Poilievre, who is in the race to become the new leader of the Conservative Party, made the platform pitch late last week of enforcing new rules on municipalities with a population of more than 500,000 people.

“The federal government must reward more building and punish gatekeeping. Only carrots and sticks will get results,” Poilievre.

“I will require severely unaffordable big cities like Toronto and Vancouver to increase home building by 15% or lose some of their federal infrastructure funds.”

The 15% requirement would be an annual mandate. Additionally, municipal governments would stand to gain $10,000 for each and every extra home built beyond the minimum annual requirement.

There would also be additional transit-oriented development density requirements for municipalities and regions seeking federal funding for major transit projects. Poilievre says he would require cities to pre-approve building permits for high-density housing and employment on all available land surrounding stations.

Poilievre would also sell 15% of the 37,000 buildings owned by the federal government, with covenants to the new property owners that they include affordable housing in their redevelopments.

Additionally, he would also stop the federal government’s practice of printing new money to fund government deficits, which has been a pandemic-era practice. He says this will help stop inflationary bubbles that the Bank of Canada has helped to create in the nation housing market, which has seen home prices surge by 50% over the last two years.

Over the last few weeks, Poilievre has elevated his public profile from the attention he has gained by targeting municipal governments — especially Vancouver — and their role as the “gatekeepers” of the country’s housing affordability crisis, particularly in the heated markets of Vancouver and Toronto.

He has also been citing a 2018 study by the CD Howe Institute that found that the City of Vancouver’s fees, red tape, and design regulations add to an extra cost of $644,000 for the average new single-family house. Homebuyers in Vancouver, Abbotsford, Victoria, Kelowna, Regina, Calgary, Toronto, and Ottawa-Gatineau also pay an average $230,000 more on a new house because of supply limits.

But Vancouver mayor Kennedy Stewart, in response to Poilievre’s conclusions on his city, believes the study is flawed as it ignores aspects such as developer profits, high land costs, and speculative demand.

Tom Davidoff, a professor and director of UBC Centre for Urban Economics and Real Estate, does not believe that municipal fees are a key driver of price growth either.

“It is true that if the charges are so high as to chase away deals that would have happened without the fees, then that does contribute to rising prices, indirectly… The key is that when fees make a deal less profitable, that reduction in profitability means developers bid less for land,” Davidoff previously told Daily Hive Urbanized.

“On fees charged by municipalities being passed through into prices dollar for dollar. This is wrong. A lot of the incidence of those fees falls on land owners rather than buyers.”

With that said, a separate independent report jointly commissioned by the federal and BC provincial governments in 2021 found that municipal government policies are a major barrier for improving housing affordability and supply in BC, especially in Metro Vancouver. It also stated cities in BC are becoming too dependent on development fees, such as community amenity contributions, to fund new community amenities and infrastructure, and that municipal governments too often collapse to NIMBY pressure on new housing developments.

Poilievre, a longtime MP, currently representing the Ottawa-area riding of Carleton, is just one of about a dozen individuals vying for the role of Conservative Party leader. The party is scheduled to select their new leader, replacing Erin O’Toole and interim leader Candice Bergen, this September.

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