The global community grapples with many challenging issues, one being the impact made by the former U.S. president, Donald Trump. His policies, particularly tariffs and annexation threats, are prominent concerns as Canadians prepare to vote in their prime minister elections. Our stateside attention often fixates on if Mark Carney, successor of Justin Trudeau from the moderate Liberal party, could capitalize on the anti-Trump sentiment to outshine the more Trump-compatible Conservative candidate, Pierre Pollievre. Yet, another significant issue worth our attention in this race is housing. It’s intriguing to note the variations between Carney’s housing scheme and that of Kamala Harris, the last Democratic nominee for president.
Harris, in her time as a presidential candidate, presented a housing strategy that many might argue was lackluster. Her focus was on promoting housing construction via tax incentives to developers of beginner homes, alongside proposing a rather ambiguous $40 billion ‘innovation fund’ to support developers endeavoring to establish affordable housing through novel methods. She also considered opening some federal lands to spur development while vowing to trim needless bureaucracy. However, her policies seemed more invested in reining in Wall Street investors in single-family rent homes, and tackling the issue of algorithmic rent-setting. Additionally, she proposed a $25,000 tax credit for first-time home purchasers and envisioned swelling rental aid plans.
The dubious nature of Harris’ housing plan tends to gravitate more towards expanding existing housing programs rather than initiating new ones. Harris optimistically projected a target of constructing 3 million new homes within a span of four years. It remained unclear whether her proposed additional 3 million homes would supplement the current housing production rate, which has averaged approximately 1.5 million units annually in the recent past. Even by assuming that her campaign proposed this level over established production levels, it would only amass a housing production increase of about 50%.
In stark contrast, Carney proposes a much more audacious vision for housing. His plan details the creation of a new government body that will resume the federal government’s role in home construction. This initiative reminisced the public housing program of Canada, which paralleled the U.S. policy, abandoned several decades ago. ‘Build Canada Homes’, as Carney has named it, would pioneer the development of substantial affordable housing projects on public lands and provide grants and loans to other developers.
In Carney’s plan, the proposed entity would command a C$26 billion funding pool designed to kickstart the modular construction industry. This aims at curtailing the time and cost it takes to realize housing projects. Build Canada Homes is crafted to stimulate the Canadian lumber industry and create fresh prospects for the building trades. He also advocates for a number of tax and administrative reforms to increase affordability. Proposals include halving municipal development charges that hike construction expenses, offering new tax breaks for multifamily housing developers, and encouraging landlords to sell their properties to the government or affordable housing providers.
Carney’s vision for first-time homebuyers is also not overshadowed. It includes a tax credit of up to C$50,000. His overall plan pledges to build half a million new homes per year, thereby approximately doubling the prevailing rates of housing production. At the surface, Carney’s proposal seems considerably more articulate and ambitious, standing in direct comparison with Kamala Harris’ significantly less courageous and focused plan.
Carney’s strategy for involving the government directly in housing development is in sync with the worldwide social housing movement. This movement focuses on empowering governments to develop large-scale, mixed-income housing projects. Public development corporations in many European and East Asian countries have entered significant roles as key real estate stakeholders. By contributing extensively to the housing market through large volumes of home development on public land, often in architecturally impressive complexes closely linked to public transit, these agencies can greatly influence housing market dynamics and help moderate average prices.
The ability to leverage economies of scale and cross-subsidization, wherein the rents of wealthier tenants directly subsidize those of their less affluent neighbors is a standout feature of this approach. Carney’s explicit mentions of modular construction technology, timber and building material supply chains, and labor indicates an intention to interconnect housing policy and industrial policy. As a result, a robust housing policy can act as a catalyst for a variety of geopolitical and economic development goals, whilst ensuring affordable living options.
Interestingly, Harris’ proposals of tax breaks and an innovation fund would essentially have preserved America’s privatized, fragmented affordable housing system. Frankly, it isn’t challenging to see Harris’ housing policy simply as a slightly better funded variant of the existing status quo. Furthermore, her vow to combat corporate landlords of single-family homes also finds an echo in the platform of Canada’s left-wing New Democratic Party led by Jagmeet Singh.
The existence of a broad array of policies stretching from moderate to progressive in America’s two-party system, where Democrats need to embrace a wide scope of policies, contrasts sharply with Canada’s multi-party system. In the latter, each party caters to a narrower segment of the political spectrum. Unfortunately, the NDP appears to be losing steam in the polls as liberal Canadians, concerned by Trump’s threats, rally around Carney.
Several political analysts have opined that Harris’s campaign would have garnered more success had it emphasized these types of economic-populist messages. Regardless of the reasons, Harris was bested by a president who is now on a mission to disband America’s already scant affordable housing system. It remains to be seen if Canada, under a potential Carney leadership, will demonstrate to its neighbor, or rather, ‘neighbour’, a bold alternative approach to housing.