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The Canada Mortgage and Housing Corp. complex in Ottawa.Sean Kilpatrick/The Globe and Mail

The head office of Canada Mortgage and Housing Corp. in Ottawa is close to the city centre, 15 minutes east of Parliament Hill. Over the past two years, the Crown corporation has helped lead the call to build a lot more housing.

CMHC’s headquarters could also be a great site for new affordable housing. In the recent federal budget, Ottawa declared it “will use all tools available to convert public lands to housing.” It’s a position this space supports, making a case for it two years ago. In early June, after a months-long investigation, The Globe and Mail identified hundreds of properties owned by the federal government that would work well for new homes.

The CMHC building, well served by transit, sits on about 20 acres of land. Almost half of it is devoted to parking. The ample space could house hundreds of families. As Ottawa considers where to build first, urban planner Rupert Campbell told The Globe the aim should be low-hanging fruit; Mr. Campbell, who focuses on non-profit developments, called the CMHC site the “lowest juiciest hanging fruit.”

A half-century ago, governments – led by Ottawa – helped build many tens of thousands of homes. It was part of the 1970s building boom, when Canada constructed almost double the homes, per capita, as it does today, even counting the surge of building in recent years under the federal Liberals. By the 1990s Ottawa had extricated itself from housing.

In 2017, the Liberals launched a housing strategy that was mostly focused on low-cost loans to private developers. It has financed about 150,000 homes, but many do not fit anybody’s idea of affordable housing. In any case, the scale of the challenge has proved far bigger than one program can tackle.

That remains true today. The push for housing on public land is a smart one – but it must be seen as only one lever among many.

The crucial factor is zoning reform. The federal Liberals last fall started offering money to cities that loosen their rules, a plan announced in the 2021 election. But while density such as fourplexes are an important first step, they are not enough. Small apartment buildings remain illegal to build on most civic land across Canada.

British Columbia Premier David Eby proposed public land for homes in 2022 and this year established BC Builds. It could increase supply by about 5 per cent a year. Compare that with a potential annual increase of about 50 per cent, from private-market construction, following major zoning reform enacted by the B.C. NDP late last year.

The economics of affordable housing don’t work without permissive density rules. Another key element is the cost of land. In its new plan, Ottawa will lease land to developers and others but maintain ownership. This keeps land costs as low as possible for new affordable developments – an essential part of the affordable housing math.

Research has made clear that governments can get affordable housing built cheaper than the private sector. With nominal land costs, Ottawa’s low-cost construction loans – and cutting the GST on rental buildings – further builds a strong economic case.

Alongside this, the Liberals promise a hands-off approach, leaving all the work, from building to ongoing management, in the purview of others. Long-term ownership of the public asset of land gives Ottawa the necessary oversight. A failed deal in B.C. is a stark cautionary tale: The provincial government sold land in Vancouver 16 years ago for affordable homes but little has been built.

Most housing today and in the future will be built by the private sector, for the private market, but affordable housing has been a missing part of the calculus. A 2023 Scotiabank report showed Canada has less subsidized housing than most rich countries. A landmark 2022 report to the Ontario government, led by a Scotiabank executive, said: “We cannot rely exclusively on for-profit developers nor on increases in the supply of market housing to fully solve the problem.”

Ottawa and B.C. are making the right moves. The amount of public land available is vast. Ottawa is the largest owner, yes, but think of all the school boards across Canada. There’s a lot of underused land. And then think of all the private land where zoning heavily restricts new homes.

There’s a shortage of housing, but there’s no shortage of land that could comfortably accommodate many new homes.

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