If Trudeau wants to fix housing, London is a good place to start

If you wanted to solve Canada’s housing problem, the city of London, Ont. — where Liberal MPs are meeting this week ahead of Parliament’s fall sitting — would be a good place to start.

“The challenges facing London are indicative of some of the challenges that we experience in cities across this country,” Housing Minister Sean Fraser said on Wednesday, standing in front of a construction site to announce the first investment from the federal government’s housing accelerator fund.

In his own remarks, London Mayor Josh Morgan said was good for the Liberal caucus to see “an example of both the opportunities and the challenges that a city like London showcases [and] is replicated in many cities across this country.” 

The federal funding touted on Wednesday amounts to $74 million in exchange for the city’s agreement to pursue a series of measures, including a change to local zoning rules that should make it easier to build more rental units. According to federal and municipal officials, the joint action will create 2,000 housing units over the next three years and help build “thousands” more in the years after.

Set against the estimated 3.5 million homes that need to be built between now and 2030 if Canada’s housing market is to become broadly affordable again — and the incredible political weight of a problem that is dragging down support for Justin Trudeau’s government — that perhaps does not seem like much. 

But it’s a start. And the Liberals desperately need to show that they are at least starting to solve the problem.

How London got a housing problem

The price of real estate in London has increased dramatically over the last seven years. As laid out by Mike Moffatt — a professor at the Ivey Business School and director of the PLACE Centre, a think-tank focused on housing policy — that is the result of a confluence of factors.

First, an influx of new residents to Ontario, particularly in Toronto, was not matched by an increase in the construction of new homes. That mismatch between demand and supply helped drive up house prices in Toronto, which pushed home-seekers to look elsewhere for something they could afford. That then drove up prices in places outside the Greater Toronto Area such as Kitchener and Brantford.

The wave of migration began to hit London in 2016 and prices started to climb rapidly as a result. Then the pandemic hit, and the combination of low interest rates and increased personal savings resulted in another spike in prices. 

As COVID-19 faded, so did pandemic-era prices, but the median price for a single-detached home in the London area at the start of 2023 was still more than twice what it was in early 2015.

London is also an example of how housing affordability can exacerbate and overlap with other problems. The city’s struggles with homelessness and drug addiction are now glaring. Before the pandemic, London’s homeless or unsheltered population numbered about 300 people, Morgan told CBC News this week — now it’s about 2,000.

London is hardly unique in these respects. But if Trudeau and the Liberal caucus were going to meet somewhere to reckon with their response to the problems facing both their government and the country, London is as good a place as any to do it.

The Liberals find a solution — and something to blame

Trudeau stressed on Wednesday that housing is a “solvable” problem and the accelerator fund is the sort of solution the Liberals have reached for before — using federal funds to buy reforms at the provincial or municipal level. But the Liberals are also now being much more explicit and loud about what they’re trying to fix.

“We told municipalities they could access these funds with bold plans to eliminate red tape and remove barriers,” Trudeau said, later adding a “challenge” to other mayors to follow the lead of Morgan.

The housing minister referenced “sluggish permit-approval processes” and zoning challenges.

“The reality is, over the course of generations, we’ve seen different communities across the country make decisions that actively restrict the ability of communities to build houses for their residents,”  Fraser said. “This isn’t OK.”

Fraser, who was moved into his current role this summer specifically to bring a new approach and a new voice to the file, went so far as to say it was time to “legalize housing.” 

Conservatives will note this sounds a lot like what Pierre Poilievre has been saying, with his loud and repeated vows to get tough with “gatekeepers.” Poilievre has gone further to say he would withhold infrastructure funds from cities that don’t build as much housing as he thinks they should. Liberals could fairly point out that the accelerator fund was originally touted as a tool to “tackle NIMBYism” when it was promised in the Liberal Party’s 2021 platform.

But even if the parties are now focused on both the same basic problem and similar solutions, the onus is still obviously on the incumbent government to demonstrate results. And so the Liberals need a lot more announcements like the one on Wednesday.

Liberals running out of time

They also probably need to do other things — and do them fast. 

The housing accelerator fund was launched with the promise that $4 billion in federal funding would help create 100,000 housing units. That, again, isn’t nothing. But it might not be enough, either practically or politically.

The London deal also comes almost 16 months after the accelerator fund was first announced in the federal government’s 2022 budget. The machinery of government often churns slowly, but whatever else the Liberals want to do, they probably can’t afford to have it take that long to translate into action.

WATCH | Liberals hold caucus retreat ahead of fall sitting:

Liberals hold caucus retreat ahead of fall sitting

CBC News Network’s Hannah Thibedeau speaks with Tyler Meredith, founding partner of Meredith Boessenkool Policy Advisors and former head of fiscal and economic policy for Prime Minister Justin Trudeau.

“We know housing is a challenge that the solution happens over years,” Trudeau said on Wednesday.

But the Liberals aren’t guaranteed an unlimited number of years to see that through — at most, they have two more years before the next election. 

London is a good start. But it’s just that. And the hole the country has dug itself on housing — and the Liberals have dug themselves in opinion polls — is deep.