Donald Trump’s unconventional policies continue to be an influencing factor in global politics, now casting a significant shadow over the Canadian political landscape. As Canada heads to cast ballots for a new Prime Minister, the impact of Trump’s trade aggression and territorial ambitions are worth noting. This election, in the eyes of America, will largely center around whether Mark Carney, the center-left Liberal party candidate succeeding Justin Trudeau, can leverage the widespread disapproval of Trump to his advantage and win against Pierre Pollievre, the Conservative contestant echoing Trump’s views. Interestingly, one major agenda that demands attention beyond the borders of Canada is the housing issue, which appears to have points of intersection with the residential goals back in the U.S., particularly with those of Kamala Harris, the Democratic presidential nominee for November.
Carney’s stance on housing somewhat echoes Kamala Harris’ housing plan, but not without significant deviations that draw attention to the areas where the Democratic party falls short internationally. A close look at Harris’ housing manifesto reveals a strategy that endorses construction growth through tax breaks for starter home developers, a $40 billion ‘innovation fund’ offering grants to exploratory housing development models, and opening federal lands for construction. Additionally, she proposed a reduction in bureaucratic complications and bolstering housing affordability by regulating Wall Street’s involvement in single-family rental homes and algorithm-based rent-setting software.
By overarching regulations or otherwise, Harris hoped to alleviate soaring housing prices, aimed to provide a $25,000 tax credit for first-time homebuyers, and pledged to bolster rental assistance initiatives. This leaning towards expansion and enhancement of existing housing programs, rather than pioneering fresh ones, forms the crux of her housing perspective. Harris ambitiously touted aiming the construction of three million new homes over four years, although avoiding details whether this mammoth figure was in addition to or included the average annual housing production of approximately 1.5 million.
Interestingly, Carney’s audacious housing scheme was distinguished by its call to reinvigorate the federal government’s role in home construction. By creating a new government body named ‘Build Canada Homes’, Carney evoked a sense of nostalgia and returned to Canada’s government-led housing program that eventually faded years ago. This proposed entity would directly supervise substantial affordable housing projects on public lands and serve as a financial patron to other developers. With a mighty fund amounting to C$26 billion at their disposal, the entity is envisioned to serve as a propellant for the modular construction market, therefore reducing costs and construction timelines.
Pivoting on affordability and accessibility, Carney’s housing plan aimed to stimulate the Canadian timber industry and provide avenues of opportunity for the building trades via tax and administrative alterations. By promoting a reduction in municipal development costs that inflate construction costs, he intends to create an environment of affordability. New tax incentives for multifamily housing constructors and incentives for landlords to sell their properties to either the government or affordable housing providers also take center stage in his proposal. Prospective first-time homeowners are also promised a tax credit, anticipated to scale up to C$50,000.
Carney’s ambitious plan advocates for the construction of an annual half a million new homes, a proposal that doubles the current housing production rates. Diving deeper into his vision, it becomes clear that Carney aspires to adopt the global social housing movement’s principles. By positioning the federal government directly in the spotlight of large-scale, diverse-income residential projects, Carney is essentially aiming to emulate public development corporations from various European and East Asian nations.
Carney’s agenda to direct the government’s role more towards a facilitator of housing assumes massive importance in the global housing landscape. Building large amounts of houses on public land, oftentimes in strikingly designed complexes closely networked with public transit, public development corporations can significantly influence the housing tide and reduce overall costs. This approach benefits from the principles of scaling economics and cross-subsidization – where rents from higher-income tenants generously subsidize their lower-income counterparts. Consequently, Carney’s candid discussion around harnessing innovations in modular construction, efficiently managing supply chains, and labor exhibits how housing policy could potentially resonate with a broader industrial policy.
Albeit with a complete change of guard, Harris’ approach, on the contrary, was heavily laden towards preserving America’s private and decentralized affordable housing system. The housing ambitions outlined in her manifesto seemed to be a superficially better-funded version of the current system, offering little more than tax breaks and her touted innovation fund. Carney’s bold approach of attempting to direct the federal government’s role in housing development stands in stark contrast to Harris’ preservation of the status quo with a little more funding.
Harris’ initiative to contest corporate landlords of single-family homes finds some echo in the party line of Canada’s NDP, led by Jagmeet Singh. This indicates the increasingly broad spectrum of policies the Democrats and their international counterparts must accommodate. In stark contrast to this, each party in Canada’s multi-party system typically showcases a more focused range of political views.
The NDP’s dimming political presence at the polls may reflect the current political climate, as the impact of Trump’s antagonism triggers liberal Canadians to mobilize support for Carney. Critics suggest that Harris might have benefitted from a campaign that emphasized more populist economic messages. Regardless of the reasons, Harris’ defeat by a president intent on dismantling a scarcely adequate affordable housing system reads as an indictment of the present state of American politics.
A careful analysis of Carney’s housing proposal and Harris’ housing plan vividly brings out the stark contrast visible between the Canadian and American progressive housing policies. While Carney’s plan is distinctly elaborate, greatly ambitious, and pushing for a constructive federal role in housing development, Harris’ policy, interestingly, takes a considerably less innovative approach.
The wide gulf between the two approaches to housing policy probably implies a corresponding difference in political ideologies and mandates. As the debate continues, the hope is that the ensuing policy discourse will result in better outcomes for the public in general. And as the article concludes, in the world of housing policy, ‘bolder is better’.
Western politicians will do well to observe the impending developments in Canadian politics, and more specifically, the impacts and implications of Mark Carney’s ambitious housing policy. Indeed, the changing dynamics rooted in housing reform may well become a deciding factor for the future governance not only in Canada but also across the border.