The next step for new housing in Winnipeg

By Brent Bellamy, Associate + Creative Director 
Originally published in the Winnipeg Free Press

Tomorrow morning could mark the beginning of a new future for the city of Winnipeg, as council begins a review of planning and policy changes that are the first step towards redefining how and where we build new housing in our city.

Like much of the western world, Canada is experiencing a housing crisis, and even the city of Winnipeg, long celebrated as a bastion of affordability, is feeling the impacts.

In response, the federal government is working directly with cities across the country to address a problem that has grown from decades of fiscal, city-building, and social policy decisions.

After the Second World War, the federal government played a central role in funding and building affordable housing across Canada.

For decades, Ottawa helped create about 20,000 units of non-market housing annually, maintaining a consistent supply of homes to lower- and middle-income Canadians.

In 1993, the federal government under Prime Minister Brian Mulroney stopped funding this affordable housing construction. The intention of this policy change was to establish housing as a commodity and allow the private market to fill the shortfall. The belief was that by doing this, people could climb the property ladder and build wealth through real estate.

This system quickly became a residential stock market, with continually rising housing prices and household debt.

It failed to produce equitable housing outcomes as the private market chased the highest profits, responding overwhelmingly to the needs of people with the strongest purchasing power, while the government was no longer backfilling the market with affordable supply.

The filtering effect that was in theory supposed to create affordable options as new homes aged and lowered in value, was largely inadequate as land values and central locations increased the cost and desirability of older housing stock.

Exclusionary zoning restrictions that prevent higher density development in mature single-family neighbourhoods stifled new construction, keeping demand for existing homes high.

When housing became almost exclusively a private market commodity, real estate became a key wealth driver in Canadian society, not only as primary residences, but as investments. Today, one in five Canadian homes are revenue properties, limiting access to home ownership for many, and increasing housing inequity.

With housing so intimately tied to personal wealth, successive governments have paid lip service to housing affordability but have been hesitant to create meaningful policies to reduce housing costs that would necessarily remove wealth and equity from current homeowners.

Economic stresses after the pandemic, rising construction costs, labour shortages, and population growth needed to stabilize the economy, have worsened housing affordability to a point where the federal government had no option but to aggressively intervene.

Facing a 30-year deficit in affordable housing construction, federal programs have focused on dramatically increasing housing supply, specifically targeting the development of rental apartments to catch the most vulnerable people in the market.

Canada’s National Housing Strategy has been implemented through a series of direct programs, the elimination of GST on new rental apartment construction, and financing incentives administered by the Canadian Mortgage and Housing Corporation (CMHC).

A few years in and these federal programs have begun driving housing construction across the country and affordability results are starting to be realized.

In the first half of this year, Canada’s big cities saw the second-largest increase in new housing starts in more than three decades.

The federal focus on rental housing has resulted in almost half of all new housing under construction being purpose-built rentals, the highest proportion in Canadian history.

Because of this, last month, average rents across the country dropped for the first time since the pandemic, a trend forecast to continue as supply increases. In large cities like Toronto, Vancouver, and Calgary, that have seen major increases in housing supply come online this year, rents have declined by almost ten per cent.

To ensure a continued growth in housing supply, the federal government is pushing cities to change how and where they approve new multi-family housing construction.

To create places for new housing to be built, and to ensure equitable access to good neighbourhoods for people of all income levels, cities must look inwards to existing single-family neighbourhoods and allow higher density development to occur.

The federal government’s Housing Accelerator Fund (HAF) is a program that is working in direct partnership with 179 communities across the country to achieve this and other goals. To receive HAF funding, partner cities must commit to cutting red tape, streamlining housing approval processes, and eliminating exclusionary zoning that restricts multi-family development in single family neighbourhoods.

This is intended to create structural change in civic policy that will increase the pace and diversity of housing supply after the program is complete.

Already yielding results, the City of Winnipeg has approved an aggressive number of 12,000 new homes this year and the first $25 million of HAF funding will be used to incentivize 11 projects creating 1,135 new rental housing units, with 597 being affordable and 613 located downtown.

All of this brings us back to tomorrow morning, where city council will begin discussing the first zoning bylaw changes promised in its HAF agreement with the federal government.

They will be starting easily, with a proposal to allow the construction of multi-family housing on shopping centre sites and on major roads.

Soon, more contentious zoning amendments — like allowing four-plexes to be built on every residential property in the city — will be brought forward.

It will be difficult, as all change is, but if we want to give our children the opportunity and quality of life that many of us were given, it will be important that we embrace that change.