If Trudeau wants to fix housing, London is a good place to start

If you wanted to solve Canada's housing problem, the city of London, Ont. — where Liberal MPs are meeting this week ahead of Parliament's fall sitting — would be a good place to start.

"The challenges facing London are indicative of some of the challenges that we experience in cities across this country," Housing Minister Sean Fraser said on Wednesday, standing in front of a construction site to announce the first investment from the federal government's housing accelerator fund.

In his own remarks, London Mayor Josh Morgan said was good for the Liberal caucus to see "an example of both the opportunities and the challenges that a city like London showcases [and] is replicated in many cities across this country." 

The federal funding touted on Wednesday amounts to $74 million in exchange for the city's agreement to pursue a series of measures, including a change to local zoning rules that should make it easier to build more rental units. According to federal and municipal officials, the joint action will create 2,000 housing units over the next three years and help build "thousands" more in the years after.

Set against the estimated 3.5 million homes that need to be built between now and 2030 if Canada's housing market is to become broadly affordable again — and the incredible political weight of a problem that is dragging down support for Justin Trudeau's government — that perhaps does not seem like much. 

But it's a start. And the Liberals desperately need to show that they are at least starting to solve the problem.

The price of real estate in London has increased dramatically over the last seven years. As laid out by Mike Moffatt — a professor at the Ivey Business School and director of the PLACE Centre, a think-tank focused on housing policy — that is the result of a confluence of factors.

First, an influx of new residents to Ontario, particularly in Toronto, was not matched by an increase in the construction of new homes. That mismatch between demand and supply helped drive up house prices in Toronto, which pushed home-seekers to look elsewhere for something they could afford. That then drove up prices in places outside the Greater Toronto Area such as Kitchener and Brantford.

The wave of migration began to hit London in 2016 and prices started to climb rapidly as a result. Then the pandemic hit, and the combination of low interest rates and increased personal savings resulted in another spike in prices. 

As COVID-19 faded, so did pandemic-era prices, but the median price for a single-detached home in the London area at the start of 2023 was still more than twice what it was in early 2015.

London is also an example of how housing affordability can exacerbate and overlap with other problems. The city's struggles with homelessness and drug addiction are now glaring. Before the pandemic, London's homeless or unsheltered population numbered about 300 people, Morgan told CBC News this week — now it's about 2,000.

London is hardly unique in these respects. But if Trudeau and the Liberal caucus were going to meet somewhere to reckon with their response to the problems facing both their government and the country, London is as good a place as any to do it.

Trudeau stressed on Wednesday that housing is a "solvable" problem and the accelerator fund is the sort of solution the Liberals have reached for before — using federal funds to buy reforms at the provincial or municipal level. But the Liberals are also now being much more explicit and loud about what they're trying to fix.

"We told municipalities they could access these funds with bold plans to eliminate red tape and remove barriers," Trudeau said, later adding a "challenge" to other mayors to follow the lead of Morgan.