Conservative Leader Proposes Bill to Tackle Housing Crisis with Incentives and Penalties

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Pierre Poilievre, Conservative Leader, issued a private member’s bill in the House of Commons on Wednesday, presenting an approach to address the national housing crisis. The bill, whose chances of passing remain doubtful, is founded on leveraging federal transit and infrastructure expenditure to encourage cities to amplify home construction.

The proposition mandates urban centres to augment home building by 15 per cent annually to retain their customary infrastructure investment. Municipalities failing to achieve this target would experience a reduction in the federal revenue they receive, while those exceeding the target would be awarded additional funding.

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Moreover, financial support for transit projects would be conditional on the construction and occupation of high-density housing around transit stations. There is a broad agreement among housing experts, advocates, and industry groups regarding the numerous hurdles posed by municipalities before new developments. In their view, city councils are frequently influenced by anti-development sentiment.

For Poilievre, coordinating federal funding with municipal level housing outcomes represents a core strategy to combat the housing crisis. Although the Liberals have also unveiled plans to stimulate home construction in cities using federal funds through their recently initiated Housing Accelerator Fund, Poilievre criticizes this solution as overly bureaucratic.

The Housing Accelerator Fund, as per the Liberals’ plan, solely provides additional resources for cities without considering withdrawal of funds. During the House of Commons presentation, Poilievre contrasted this with his plan which incorporates a “simple mathematical formula” to either reward or penalize cities.

The Conservative proposition suggests reallocating $100 million from the Housing Accelerator Fund to incentivize municipalities that significantly exceed housing targets. The bill also holds a provision for Canadians to voice concerns to the federal government about municipalities obstructing new developments. If deemed valid, these complaints may result in further fund withdrawals.

Opinions on the bill vary, with Murtaza Haider, a professor of data science and real estate management at Toronto Metropolitan University, expressing partial support for the Conservative approach. However, he cautions against penalizing cities that fail to meet targets by cutting their infrastructure funding, suggesting it could potentially exacerbate housing shortages.

In addition, the bill proposes the removal of GST charges on rental developments offering below-market rent prices, a shift from Liberals’ plan to eliminate taxes on all rental developments. Housing experts, such as Carolyn Whitzman, support the use of perks and penalties to inspire cities to increase home construction. However, they argue the proposed GST exemption adds unnecessary bureaucratic complexity and overlooks the need to decongest social housing.

Other provisions of the proposed plan include selling off 15 per cent of federal buildings and land for housing development, and scrutinizing bonuses and compensation of executives at the Canada Mortgage Housing Corp. for delayed approvals and missed home-building targets.