With the end of the year come the new municipal budgets. This year will be no exception: we will have a new demonstration of the lack of financial resources of cities. However, the housing shortage and the climate crisis are knocking on our door with vigor and require us to change the recipe.
We can choose to “continue” as before and let each level of government insist on respecting its autonomy, each in its own corner.
There is another choice. That of a transformed governance with leaders who set common targets, agree on respective means and oblige themselves, each in their spheres of responsibility, to take predetermined actions.
In short, rather than demanding the traditional unconditional transfers that Quebec will refuse in the name of accountability, the cities could propose the adoption of a transfer program subject to conditions for each of the partners.
Our organization, the Urban Development Institute (IDU), has already proposed that Quebec, supported by Ottawa, adopt a four-part municipal transfer program: inclusive housing, public transit, land requalification and urban development. These transfers would not be without conditions.
We advocated the importance of doubling the rate of production of new housing units to aim for affordability in 2030 as required by the Canada Mortgage and Housing Corporation (CMHC). As of now, Quebec should establish targets for social and affordable housing to be built with funding accordingly. Cities would have to determine the sectors likely to accommodate new public and private units, plan the necessary infrastructure services, maximize the number of units authorized and speed up the issuance of permits.
Today, it is not enough to set the targets for housing to be built, it is necessary to plan to achieve them without urban sprawl and by reducing travel needs.
This is why we have also asked Quebec to increase the funding reserved for public transit by reducing the proportion devoted to roads.
In exchange for this financial addition necessary for the appearance of local districts, the cities would oblige themselves, for their part, to ensure the densification and the mix of uses around these transport networks.
To succeed in this unavoidable challenge of developing the city on the city, the municipal authorities must be able to provide the necessary infrastructures and reduce the burden of decontamination of the sectors to be developed. In the current state of municipal finances, they are not capable of this.
Let’s take the case of the grounds of the former Montreal racecourse. This is a priority sector to densify, but paralyzed due to the financial inability to build essential municipal infrastructure. Let’s think east of Montreal. A large number of lands are available for land requalification, which would reduce the pressure for urban sprawl, but the municipal coffers cannot support the costs of decontamination, water services and structural transport to be implemented.
Without resources, cities cannot finance the urban development work or land requalification necessary for the neighborhoods of the future.
How to facilitate urban developments that would meet housing needs in a climatic context where we want to reduce travel?
A development pact
It is with this question in mind that the IDU has given a study mandate to analyze what is being done elsewhere in order to inspire our leaders.1 The report identifies several sources of funding to support development and requalification. The means can be different, but, generally, we adopt an approach by sector. And for each, we agree on a funding framework that brings together various elements. In order to finance public services beyond those paid for by the private sector, public authorities should agree on the development plan for each sector, establish the resulting land value and impose on themselves the actions to be taken to carry it out according to a contract. return on investment.
To establish this framework, it is necessary to imagine a federal contribution that could come from the Canada Infrastructure Bank, as it has already done in Richmond, British Columbia. We could also offer cities the ability to issue bonds favored by a tax credit. Finally, Quebec could propose that part of its assistance take the form of a loan repayable from a proportion of the new property taxes resulting from the realization of the projects.
This type of innovative approach between our public decision-makers would make it possible to achieve the common objective of reducing car use by creating living environments for all, while offering them a return on investment. Starting with the city, which would benefit from an expanded property tax base that would increase its revenues without having to raise tax rates.
For its part, the Canada Infrastructure Bank would be entitled to the agreed returns as would the beneficiaries of the bonds. Quebec would benefit from the return on its investment according to the clauses agreed to in the pact.
In summary, with conditional transfers for inclusive housing and public transit and such a development pact to support land requalification and urban planning initiatives, leaders will be able to respond to the challenge of housing affordability. in a context of climate change.
The only way to imagine a coherent response to the crises we have before us is to get out of the government’s every man for himself. Our public decision-makers have the power to agree on the conditions to which they would agree to comply. To meet the climate challenge and build sustainable and inclusive living environments, it is time to change the recipe.