Halifax budges on housing

Federal pennies go a long way to buying change

For folks who care about housing in Halifax - the past week has been eventful. It’s been nice to have the municipality talking about housing without simply blaming the province for everything (they still do lots of that though). But the gamechanger has been an intervention by the federal government.

Trudeau’s 2022 budget announced a “housing accelerator fund” that was pitched as cash-for-reforms, where the feds would pay cities to do good things in housing. Initially, the program was vague and allowed the cities to decide what they wanted to do. But Sean Fraser, the new Housing minister - likely in response to truly bad polling, has decided to start wielding his carrot like a stick.

It started with London, then Calgary. And then last week the Minister made demands of Halifax (above and beyond the original application - which was mostly about reducing paperwork).

The most important demand is the first - a minimum of 4 units as-of-right city wide. And council agreed to that part! So what’s it mean?

End of a (Single-Family) Era

Halifax, like most Canadian cities, has very strict rules about how much housing you can build on most of the land area. That includes “Established residential” zones in the urban core (orange = duplex, red = single family)¹ . The suburbs also have huge swaths of single-family R1 zoning.

I can’t exactly say how much added zoned housing capacity the shift to 4 by right will enable (for data reasons). But we can look at the existing housing stock as a proxy.

Not surprisingly, 60% of Halifax’s dwelling units are single-family homes. Another 3% are duplexes, triplexes and quadplexes add another 1% each. 50+ unit apartment buildings account for 23% of units. So the reform to allow 4 by right applies to 65% of Halifax’s existing housing stock.

So, all those lots with one homes could in theory add three units, the duplexes can add two, the triplex can add another. Just doing the math on that - it implies that we will now allow by-right another 397,000 units - that’s nearly double Halifax’s existing housing stock (1.85x). Halifax’s much discussed ‘Centre Plan’ upzoned for about 33,000 units along key corridors - which pales in comparison by unit count².

An added benefit of broad-based upzoning is that not every unit needs to or will change anytime soon. Halifax added 20,000 residents last years - but we built less than 4,000 homes. With average household size of 2.2, that means we we short homes for 12,000 of new residents, or about 5,300 units.

Finding land for 5,000 single family homes is tough - but the math is a lot easier if fourplexes happen (still a big if). Even accounting for the demolished unit, it would take about 1,800 fourplexes annually to meet our population growth - that means one conversion out of every 73 single family homes. We have many old homes on big lots that are prime candidates.

Now, we’re along way from housing abundance - and its very easy for “poison pills” to effectively stop quadplex uptake (parking requirements are an obvious one - lot coverage ratios another, federal and provincial building codes too). But the move to allow 4 units is incredibly hopeful, and represents a big step away from decades of urban planning dogma…which brings up another point.

Cheap Dates

I don’t think anyone who cares about more housing should tell councilors this, but they are revealing themselves to be incredibly cheap dates. The demands from minister Fraser are in exchange for a one-off, $73m in funding. Call it equivalent to $10 million per year over 10-years (accounting for interest).

Halifax has a billion dollar operating budget! They are willing to abandon their foundational urban planning policy in exchange for 1% of their own miniscule budget! Put differently, property taxes, the city main revenue tool, would only need to increase by 1.5% for Halifax to raise the annual equivalent revenue that Sean Fraser is offering.

Of course, the councilors would say they we’re headed down this path anyway with the regional plan review and so on, but it only happened when the feds dangled a toonie in front of them (the average single family tax bill is $2288 - so a 1.5% increase is about $3 a month).

It’s really driven home how bad our cities are at weighing fiscal tradeoffs - and how they prioritize keeping property taxes low over everything else. What other great things are we losing out on because of penny pinching councils?

1. I’m ignoring the basement suites - they are effectively non-existent with little uptake

2. But concentrated high-density upzoning is likely to have a larger share of the land be densified than a broadbased, modest upzoning. The two should be seen as complementary, not opposites