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Federal housing fund 'only for the most ambitious communities in Canada'

“There will come a point the fund will be exhausted. We’ve been very clear from the get-go, this particular fund is only for the most ambitious communities in Canada,”

A message from federal Housing Minister Sean Fraser to municipalities wanting money from its Housing Accelerator Fund was loud and clear.

If you want money to help with housing, your plans need to be bold and ambitious – and do it before federal funding runs out or risk missing the boat.

“There will come a point the fund will be exhausted. We’ve been very clear from the get-go, this particular fund is only for the most ambitious communities in Canada,” said Fraser, the federal government’s minister of housing, infrastructure and communities, at a Monday (Feb. 19) announcement when Banff received $4.6 million.

“With respect to Canmore or others, we continue to go through the process. But to the extent anybody expects to be funded through the Housing Accelerator Fund, they should ensure first their applications are among the very most ambitious and certainly more ambitious than their neighbours. The reason why the six communities are being funded, it's because they’re doing more with the things within their control to get more homes built. If anyone else is listening in neighbouring municipalities, consider doing more to match the ambition of your neighbours and we’re happy to have conversations about what that means for specific applicants.”

The warning shot to municipalities came as the federal government announced the launch of the small town component of the Housing Accelerator Fund – with a total of $13.84 million going to Banff, Sylvan Lake, Bow Island, Westlock, Smoky Lake and the Village of Duchess.

Of that, $4.66 million will head to the Town of Banff to help with ongoing initiatives such as reducing parking requirements, updating the land use bylaw’s intensification of density, providing financial support to create accessory dwelling units, enhancing permitting processes and finding incentives to financially support more housing through tax strategies and fee waivers.

The Town of Canmore’s housing action plan aims to phase out tourist homes, update policies, pass the Palliser Trail area structure plan, develop Town- and Canmore Community Housing-owned land, look at tax structures to incentivize purpose-built rental units and potential land use bylaw changes.

The Housing Accelerator Fund is a $4 billion federal initiative to drive construction of homes across Canada. Both the towns of Banff and Canmore are among 540 applicants for the fund, with Fraser calling it an “enormous opportunity” to build more homes.

Fraser said the Housing Accelerator Fund was established to create about 100,000 new homes in the next decade, but initial changes by municipalities have the ministry expecting upwards of 600,000 in the next 10 years.

“The Housing Accelerator Fund has provided a platform for municipalities to demonstrate their level of ambition and, candidly, they have exceeded my very high expectations,” he said.

“This is going to create an opportunity that’s going to permanently make it easier and faster to build homes in communities that are changing the way homes are being built.”

He noted after funding began to be doled out to municipalities, starting with $74 million to the City of London in southwestern Ontario, the federal ministry was “flooded with correspondence from cities afterward that indicated they too were willing to increase their ambition.”

He pointed to the need to speed up development permitting times by using digital technology to expedite the process.

“We’ve put federal money on the table to incentivize changes in the way homes get built, not just directly funding their construction, and these systemic changes are going to have a lasting impact on communities like Banff and small communities across the country,” Fraser said.

Permitting timelines have long been a significant clashing point between area developers and the Town. Bow Valley Builders and Developers Association (BOWDA) commissioned a third-party report in 2022 to look at Canmore’s planning timelines.

The report analyzed planning and development wait times in Canmore and used municipal benchmarking from comparable communities.

It came after BOWDA had five member surveys between October 2018 and November 2022, with lengthy timelines being the biggest concern for developers.

The report noted delays in development applications “directly impact housing supply and the final cost of housing to the end use,” and at the time building permits were 85 per cent higher than the average of comparable municipalities and development permit times were between two to six times longer.

The Municipal Government Act requires municipalities to decide on development permits within 40 days of receiving an application and 60 days for subdivision applications.

The City of Calgary will receive $228 million, but it came with conditions as the City received 25 per cent upfront and will get 25 per cent each of the next three years if it meets conditions and milestones for housing creation. Calgary would also have to end exclusionary zoning, invest in affordable housing near transit and improve permitting processes.

“Generally speaking, we want to see an end to exclusionary zoning and when we’re dealing with big cities, there has not been a single example in Canada that we have signed a deal with that hasn’t agreed to adopt four units as of right zoning policy. … In a housing crisis, it makes no sense to me that we would tell a person who owns their own property they’re not allowed to build more homes for their neighbours,” Fraser said.

“Single-family homes, I mean to pass no moral judgement on single-family homes, I just think it’s a foolish rule to have in place that everything else is illegal to build in a housing crisis to the extent communities want to receive funding through the Housing Accelerator Fund, particularly medium and large cities, they should know we have an expectation in our office they’re going to bring an end to exclusionary zoning.”

Though Canada Mortgage and Housing Corporation – which falls under Fraser’s portfolio – has traditionally provided funding to create below-market cost housing, Fraser said the fund intends to use a carrot rather than a stick approach. In outlying their expectations to receive federal money, municipalities have to show significant change when it comes to driving housing builds.

“We’ve put federal money on the table to have cities and communities increase their ambition and change the process to get homes built,” he said. “When we see the combined impact of a faster home permitting process, more permissible zoning changes so you can have more density, urban planning that actually puts more homes near the transit and service opportunities and economic opportunities that exist, what you see is the potential to create explosive housing to catch up with the extraordinary demand the communities are facing.

“By putting federal cash on the table, we’re letting cities and communities across the country really demonstrate their very best when it comes to housing process and the policies that will help them get over time.”

About the Author: Greg Colgan

Greg is the editor for the Outlook.
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