Ten things to know about the Liberal Party’s housing platform

La version française de ce billet se trouve ici.

With Canadians heading to the polls in a federal election next month, the Liberal Party of Canada has released its housing platform.

Here are 10 things to know.

1. The Liberals would provide $1 billion in loans and grants for rent-to-own projects. They say they would do this in partnership with private, not-for-profit, and co-op partners, with the goal of “creating a pathway to home ownership for renters in 5 years or less.” They do not say how much of this money would be loans or how much would be grants

2. A Liberal government would introduce a tax-free First Home Savings Account for young Canadians. This would allow Canadians under the age of 40 to save “up to $40,000 toward their first home, and withdraw it tax-free to put toward their purchase, with no requirement to repay it.” While this would encourage home ownership, I suspect it might also result in considerable foregone tax revenue to the federal government.

3. They promise to make the First Time Home Buyer Incentive more flexible. Specifically, the Liberals would “give Canadians the option of a deferred mortgage loan, as an alternative to the current shared equity model, and reduce their monthly mortgage costs.” With the status quo, a percent of the home’s value must be paid back to government; however, with this new proposal, the homeowner would have the option of giving a fixed dollar amount back to government.

4. The Liberals would increase the First-Time Home Buyers Tax Credit and reduce the cost of mortgage insurance. They say they would double the First-Time Home Buyers Tax Credit from $5,000 to $10,000. And they say they would reduce the cost of mortgage insurance provided by the Canadian Mortgage and Housing Corporation by 25%. They say this would result in lifetime savings of $6,100 to “a typical person.”

5. The platform contains several unclear statements about housing-related assistance for cities. It says the Liberals would create a Housing Accelerator Fund, which would make $4 billion available to cities. According to the platform, the goal would be for cities to help create “100,000 new middle-class homes by 2024-25.” The nature of this fund is not clear; nor is it clear whether the $4 billion would consist of grants or loans. The platform also promises that the Liberals would help cities make “core urban land…available for new housing,” so that such land is not simply “held vacant by speculators.” However, it doesn’t explain how it would help cities do this.

6. The Liberals would more than double funding for the (very unpopular) National Housing Co-investment Fund. Among housing practitioners in Canada, this is not a popular program. It has a lengthy and onerous application process that requires considerable expertise on the part of each proponent. Further, once funding is approved, it takes a long time for funding to be delivered (with bridge loans often required by proponents as they await arrival of funding). What’s more, funding levels are often insufficient to enable rent levels that are affordable for low-income tenants. They also say they would double funding for the conversion of empty office space into housing (this sounds like the Rapid Housing Initiative).

7. They would introduce a Multigenerational Home Renovation tax credit. This would apparently “support families looking to add a secondary unit to their homes, to allow a family member to live with them.” No further details were announced about this proposal. Nor is it clear what kind of regulatory changes would be required by municipal or provincial governments in order to enable this.

8. The Liberals commit to developing an Urban, Rural, and Northern Indigenous Housing Strategy. They say they would to this in partnership with Indigenous groups. They also say they would create a National Indigenous Housing Centre to enable Indigenous people to oversee federal Indigenous housing programs.

9. The Liberals would introduce a Home Buyers’ Bill of Rights (it’s noteworthy they don’t also propose a Renters’ Bill of Rights). Appearing to encroach on provincial/territorial jurisdiction, they say the Bill of Rights would:

• ban “blind bidding” (meaning all bids would be known after the fact, which might address aspects of manipulation);

• establish a legal right to home inspections (which are currently challenging to do in hot markets);

• ensure “total price transparency on the history of recent house sale prices” (at present, there is no simple, user-friendly way to get recent transaction prices in a neighbourhood or for a property);

• require real estate agents “to disclose to all participants in a transaction when they are involved in both sides of a potential sale;”

• move forward with a publicly accessible beneficial ownership registry (British Columbia already has one);

• ensure lenders offer mortgage deferrals “for up to 6 months in the event of job loss or other major life event;” and

• require “mortgage lenders to fully inform buyers of the full range of financing choices and programs available” (this may already be happening).

10. The platform contains an assortment of measures aimed at curbing speculation. These include: deterring rent increases “that fall outside of a normal change in rent” (but this is provincial jurisdiction); the creation of “an anti-flipping tax on residential properties, requiring properties to be held for at least 12 months;” the banning of “new foreign ownership of Canadian houses for the next two years;” and the expansion of the upcoming tax on vacant housing owned by non-resident, non-Canadians “to include foreign-owned vacant land within large urban areas.”

In sum. On the whole, this reads like a platform designed to attract young voters more than one designed to help those at the bottom of the income spectrum. Its decision to more than double funding for a very unpopular housing program is almost as concerning as its total lack of emphasis on homelessness.

I wish to thank the following individuals for assistance with this blog post: Michel Laforge, Michael Mendelson, Steve Pomeroy, Sylvia Regnier, Tsur Somerville, Vincent St-Martin, Ray Sullivan, Greg Suttor and several anonymous reviewers.