Housing minister warns against resistance to ending exclusionary zoning

Canada's Housing Minister is warning that municipalities won't succeed with applications for federal housing accelerator funding unless they are flexible on zoning rules.

Speaking Wednesday at an Empire Club of Canada luncheon in Toronto, Sean Fraser said a willingness to adopt zoning reforms has been key for the communities that have signed deals with Ottawa.

Fraser said the federal government has seen "a change in approach overnight" on the part of cities that were initially resistant to such changes, as competition for the money has prompted some jurisdictions to become more open to reform.

"If you want to tap into the fund, be more ambitious than your neighbours," Fraser said.

"There are cities who won't receive funding because they don't want to end exclusionary zoning in Canada. I know who some of them are and maybe they'll change their ways."

The Housing Accelerator Fund, which is meant to spur the creation of housing supply, includes $4 billion in federal funding for Canadian municipalities and Indigenous governments. The program is set to run until 2026-27.

The cities of St. Catharines, Ont. and Saint John, N.B., became the latest to sign deals with the federal government to receive accelerator funding on Wednesday, bringing the total to 22 agreements under the program.

Fund administrator Canada Mortgage and Housing Corp. has said an end to exclusionary zoning is among the best practices used insuccessful applications.

That includes getting rid of low-density zoning and regulations that exclude affordable and social housing in residential areas, and instead allowing mixed-use development and high-density residential within proximity to urban cores and transit corridors.

Fraser said the federal government received around 540 applications for the fund, but only about 150 may end up being successful.

"The reality is there's not a city who signed a deal with us who hasn't more or less ended exclusionary zoning in Canada," Fraser told the Toronto audience.

"Cities should know that if you're not willing to be amongst the most ambitious cities in the country when it comes to zoning reform permitting processes, you won't be successful."