Federal government agrees to housing fund for Vancouver, resolving earlier dispute

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Vancouver became the first city in the Lower Mainland to get millions in new federal housing money since Ottawa abruptly cancelled funding announcements in September because of concerns about the region’s plan to triple development fees.

Those fees have not been reduced, but Prime Minister Justin Trudeau and Housing Minister Sean Fraser appeared to reverse their government’s original position.

On Friday in Vancouver, the pair announced $115-million in Housing Accelerator Fund (HAF) money for the city, saying Vancouver and especially the province had shown exemplary leadership in creating strong incentives for needed new building.

“We couldn’t imagine having a more engaged, active partner,” said Mr. Trudeau as he gestured to B.C. Housing Minister Ravi Kahlon at the news conference held in a rental building under construction in south Vancouver.

A statement from Mr. Fraser’s office later said he expects “to be able to move forward on a number of applications” in the coming weeks as a result of the changes that the province has introduced to housing policy.

Mr. Fraser had been set to announce $138-million for Surrey and Burnaby from the HAF program in September. But he put out a surprise tweet the day before the planned event, saying he was reconsidering because of stiff new development fees that Metro Vancouver was planning to impose.

Mr. Fraser said those fees could hamper new development and gave the impression that the district was clawing back financial relief that the federal government had just announced by eliminating GST on new rental projects.

A majority of Metro Vancouver officials declined in November to accede to Ottawa’s suggestions to delay the fees and exempt more categories of affordable housing.

While chunks of HAF money were announced for 10 other cities across the country, including Halifax, Brampton, Calgary and Kelowna, the situation in the Lower Mainland remained in limbo.

The mayors of Burnaby and Surrey, who were not included in Friday’s announcement, did not respond to a request for information about their situation.

Mr. Fraser’s insistence that cities amend their housing policies to allow for denser residential construction or, in Metro Vancouver’s case, for a limit to fees that might hamper projects has been making waves across the country.

Most cities have been complying, although it took Mayor Bonnie Crombie to intervene to reverse a vote in Mississauga in order to get the substantial amount of new funding. Toronto is still wrestling with how to meet the minister’s demands while Windsor has rejected the idea of allowing four homes per residential lot throughout the city, saying it could have a negative impact on residents’ “quality of life.”

In the past couple of months, British Columbia has introduced multiple pieces of legislation and new initiatives aimed at dramatically increasing the opportunities to build housing in B.C. cities and reducing incentives for investors to purchase second homes for use as short-term vacation rentals.

All the politicians present at the event Friday were effusive in their praise for each other.

Mayor Ken Sim thanked the federal government for the $115-million that he said will help Vancouver build more homes faster. He also praised the province’s efforts at trying to find ways to accommodate the 35,000 people a year expected to move to the Lower Mainland over the next 20 years.

“The B.C. government has demonstrated an incredible record of leadership.”

An information sheet from the city outlined the way Vancouver plans to use the $115-million. The money will generally be used for things like speeding up land-use policy changes aimed at pushing along the construction of new types of denser housing – townhouses, small apartment buildings in some areas, towers near transit. The money may also be used to streamline and digitize permit processes.

Mr. Trudeau said that the amount of money distributed so far across Canada will result in 300,000 extra homes and shows his government’s commitment to the housing crisis.

He also criticized Conservative Party Leader Pierre Poilievre, who has frequently blasted the Liberals by saying they are doing nothing about housing.

“All he has done is to exploit Vancouver’s real anxiety,” Mr. Trudeau said.

The Conservatives issued a statement after the federal housing announcement Friday, saying that statistics for November showed that housing starts had decreased since October. The report noted that national housing starts were down year over year by eight per cent, although they were up in Toronto and Vancouver, by 17 and 31 per cent, respectively, because of the high number of multifamily projects in those cities.

Mr. Trudeau acknowledged that the housing sector is struggling to build because of high interest rates and high inflation, and said his government is committed to supporting construction.