By Serena An
INTRODUCTION
The growing concern for Canadians to find affordable housing in the current housing crisis has been a heated topic of discussion. Particularly during the lockdown, the influx of immigration, investing, and foreign buyers in a low-interest period attributed to the pendulum swinging to rapidly increasing interest rates and fewer construction efforts.1 Younger people trying to enter the home market are faced with exorbitant prices and renting is not cost-effective either. New immigrants and refugees are being pushed to overcrowded community centres, putting even more strain on workers and municipalities to maintain order and adequate living conditions. With these issues in mind, the Canadian government has pledged to enact new, transformative solutions to the housing affordability issues and tackle homelessness in their newly published plan.2
This essay will assess the government’s plan to mitigate the housing crisis and the probability of abandoned federal buildings being repurposed into housing units. The first section explains the housing crisis’ impacts on citizens and property ownership with considerations of how the government is responding to this issue. The next section will offer case studies where federal buildings have become private properties to evaluate the effectiveness of those processes. The third section serves to critically analyse the transfer of ownership and remodelling that buyers would be affected by. The following section suggests how the government can support owners and renters, and empower necessary reform to property law. The final section synthesizes the research and provides a projection of how the Canadian government will approach this issue.
CURRENT ACTION AND REAL PROPERTY LAW CONSIDERATIONS
Many citizens, particularly young Canadians, have expressed their declining prospects of becoming homeowners. Tenants in rental properties have reported lower quality of life due to factors like financial strain, and lack of sense of belonging.3 The barrier to entry for younger Canadians is much more pressing as they are at higher risk of interest rate hikes that perpetually hinder their ability to pay off their mortgage. Currently, the household debt to disposable income ratio is at its highest: a staggering 185%.4
The reveal of the 2024 federal budget seemed to prioritize and expand upon the promises made in the “Solving the Housing Crisis: Canada’s Housing Plan” in the first chapter. The road to enable more affordable homes was reiterated that by 2031, 3.87 million new homes will be “unlocked.”5 In 2022, a little over $8 billion was reported towards federal housing investments while the following year bolstered to around $11 billion.6 These investments will continue to grow to accommodate the Canadian government’s plans for increased restructuring and construction of homes. They have proposed and begun implementing strategies to encourage the construction of more homes such as the removal of GST on new, purpose-built rental housing projects under the Affordable Housing and Groceries Act;7 $40 billion towards low-cost construction of over 101,000 rental properties under the Apartment Construction Loan Program; $14 billion to build 60,000 and repair 240,000 homes with the Affordable Housing Fund; $4 billion for municipalities to remove zoning barriers and promoting more construction with the Housing Accelerator Fund; and an increase of the annual limit for Canada Mortgage bonds ($40 billion to $60 billion).8
According to the federal government’s portfolio, they are the largest landowner in Canada with over 117,000 Crown-owned properties.9 Abandoned federal sites and buildings exist, but many have not been used because of zoning regulations and barriers. The “Public Lands for Homes Plan” pledges to “unlock 250,000 new homes by 2031.”10 The conditions to turn public land into housing are that it must stay under public ownership and are to be leased to builders.11 The annual budget noted plans to transform Canada Post properties, National Defence lands, and underused federal offices into housing units in select municipalities and all over the country.
The Federal Real Property and Federal Immovables Act stipulates several regulations on the acquisition and disposition of real property.12
CASE STUDIES
This portion of the essay will raise Canadian cases that pertain to real property, zoning regulations, and housing laws.
Bell v R, 1979
The appellant, Douglas Bell, was a tenant who lived in a detached duplex with two random people. The three divided the expenses between themselves, which was a violation of by-law 7625. The Council of the Borough of North York, Ontario enacted this by-law to regulate how land and residential zones are used. According to the Council, a “dwelling unit” is a separate living space for an individual or a single family, and “family” is defined to be 2 or more people that are connected through “consanguinity, marriage or legal adoption.”13 After Bell’s conviction for violating the municipal zoning by-law, he appealed the decision by trial de novo at the County Court in which Judge Hogg quashed the conviction. The Crown first cross-appealed to the Divisional Court but this appeal was dismissed.14 In another attempt, the Crown appealed the previous decision to the Court of Appeal where the appeal was accepted and reinstated the initial judgement to convict Bell.15
Ultimately, Bell appealed to the Supreme Court of Canada on the basis that the by-law’s occupancy restriction was unreasonable and ultra vires the municipality.16 Laskin C.J. and Spence and Dickson JJ. were the majority that concurred in the final decision for the appeal to be dismissed, without costs.17 The provisions in by-law 7625, which fell in s. 35 of The Planning Act, was deemed to be, “oppressive and unreasonable” by the majority and agreed with Bell’s reasoning.18 The dissenting judgement, delivered by Martland and Ritchie JJ., found that the definitions in s. 35 were intra vires, the express powers in by-law should be respected, and the premises from the Polai v. The Corporation of the City of Toronto should not have been rejected.19
This case highlights the exclusionary language in The Planning Act, revealing broader issues of financial ability and status. Many individuals choose to split household expenses and rent with others to pay the required cost due to lack of affordability. Having restrictions as seen in the Bell v R case is a means of proprietorial and subjective burden, especially for individuals who do not have the financial capability. In the context of the current economic climate, limitations on sublets and areas of this nature should be eased to encourage affordable ways of securing shelter.
Fodor v North Bay (City), 2018
Diana Fodor, the plaintiff, is a landlord in North Bay of buildings near two post-secondary institutions to students.20 Granted under the Municipal Act, 2001, by-law 2012-55 required landlords to have licenses for their rental units with many economically independent tenants.21 Fodor was charged for not having a valid license for her rental units. At the Ontario Superior Court, Fodor argued for a judicial review that the by-law exclusively discriminates against students based on age, marital status, and family status – asserted to be violations under c. H.19 of the “Ontario Human Rights Code” and ss. 7 and 15 of the “Canadian Charter of Rights and Freedoms”.22 She also claimed that the by-law conflicts with the Residential Tenancies Act, 2006 as the municipality’s exercise of power is unreasonable.23
The judges unanimously decided to dismiss this judicial review because the plaintiff’s declaration of invalidity was not substantiated (“punctuated by hearsay and double hearsay”) and failed to recognize the protection that student tenants have under the by-law.24 This case of operating rental units for students showcases the importance of ensuring a decent quality of living, while not imposing too many restrictions on the market. It was noted that many landlords choose to defy the by-law because of the shortage of student housing, and an affidavit from real estate agent Peter Taylor saying that the by-law hinders the market conditions.25 While the judges did not hold much weight to these affidavits, the dichotomy of landlord and tenant rights is revealed in this case. A hindrance to rental properties is also seen in the 2009 Death case, where zoning by-laws prohibited landlords from renting out “lodging houses” to students.26
IMPLICATIONS FOR BUYERS
Recently extended until 2027, the Prohibition on the Purchase of Residential Property by Non-Canadians Act essentially bans foreign buyers from purchasing residential property, with certain exceptions.27 The purpose of this legislation is to reduce the housing market domination that wealthy investors capitalize on. The issue with specifically foreign investors is that it disempowers Canadians to become homeowners and enables wealthy non-interested foreign buyers to monopolize the market.
From the two aforementioned case studies, they reflect on the positions of the landlord and tenant in Canada. Although they do not concern federal buildings, they expose the struggle in our judicial system to uphold the rights and responsibilities in property law. The after-effects of COVID-19 played a tremendous role in the increased activity of real estate agents and brokers, and borrowing costs for residential construction. Many new immigrants relocating to larger cities face issues of housing affordability and rental costs.28 This report discussed the mass concern of affordability and increased interest rates, which have been exacerbated during the pandemic. In 2022, around half of Canadians expressed their concern about being able to afford housing or rent.29 Many citizens do not feel empowered to be a homeowner due to financial stress and the alternative of renting does not seem to be any easier. The federal government must enact policies to promote and enforce facets to contribute to more affordable housing and the continued construction of more units. An example of an enforceable strategy is Ontario’s rent increase guideline being 2.5% each year without approval from the Board.30
There are three main real property law considerations when assessing the possibility of transforming abandoned federal buildings into homes: zoning regulations, heritage and Indigenous designation, and ownership. Complying with established municipal zoning regulations is a common step that is taken when dealing with property law. However, it sets up many challenges for the buyer and owner and it is the House and Senate’s responsibility to make the appropriate amendments to avoid ambiguity and unreasonable provisions. The legal cases concerning property law typically challenge zoning by-laws and the rigidness of countless of codified acts.
Another consideration is the approach to the heritage and Indigenous lands. This area cannot be easily challenged, as treaties of consulting Indigenous groups must be respected. The duality in this is that the conditions of what is considered federal property and Indigenous land. Real property law imposes strict restrictions on any modifications (including demolitions) to preserve the historical significance and value.
Redevelopment projects require many groups of people such as developers, contractors, and more. It is important that ownership is clearly established, so that potential issues like liens, easements, and encumbrances do not get attributed to the wrong owner. Contractors are responsible for following environmental regulations to prevent future liabilities that could hinder the construction or sale of that property.
RECOMMENDATIONS FOR AFFECTED STAKEHOLDERS
The Canadian government is open to converting and repurposing their unused federal buildings. Public Services and Procurement Canada has listed several buildings for sale to the public.31 In 2022, the Ontario government enacted the More Homes Built Faster Act as a “long-term strategy to help build more homes and make life more affordable for Ontario families.”32 They made amendments to the Planning Act, the Development Charges Act, the Conservation Authorities Act, and the Ontario Land Tribunal Act to expedite approval timelines, inclusionary zoning regulations (5% cap on zoning units), streamline construction, remove site plan control requirements, and increase funding to the tribunal for efficient dispute resolution.
A critical solution to opening up more housing is to target large, retrofit properties. This strategy is the fastest way to unlock more places for housing and renting as there is no need for large construction efforts or zoning by-laws. The ease of repurposing buildings is that the infrastructure is already established, so prioritizing remodeling buildings in ‘good shape’ is vital for efficiency in mitigating this crisis.
Encouraging Canadians to enter the housing market would be greatly bolstered through incentivized programs. More support should be allocated towards programs like the First Home Savings Account, which many large banks offer. Nonetheless, this is a luxury for many Canadians and this is where a focus on congregate living spaces have many opportunities as well. Student and supportive housing in large, tall buildings fills a large volume of people in a controlled space.
As promised by the federal government, reducing the approval requirements for construction and transfer of ownership is part of their strategy to offer affordable housing for Canadians. Abandoned federal buildings should be a priority for conversion into housing because of their prior uses, once approved by the government beforehand. Legislation supporting these types of projects holistically benefits the government, as the sale of these properties will go back into the economy.
CONCLUSION
The potential to convert unused federal buildings into housing has not yet been fully explored but the advantages of doing so are overwhelming. Mitigating the housing crisis is about implementing solutions to balance affordability and high demand. Cities with a highly dense population are more at risk for homelessness and financial stress, which should be an indicator for the Canadian government to radically develop more affordable homes.
As introduced in Budget 2024, the plans to tackle this issue are on the radar of the public and government. There are around 3 million square metres of “underused or entirely vacant” office spaces, where they propose for new homes to be built.33 The most important aspect to keep in mind is that it is not only the government’s efforts that will successfully achieve their proposals. Contractors like EVOQ Architecture need to be recruited for long-term construction projects. Most importantly, the plan requires citizens to participate in inputting their opinions and incentivization programs. Without the willing input from citizens, be it good or bad, the housing crisis will not be alleviated any time soon.
BIBLIOGRAPHY
Legislation
Affordable Housing and Groceries Act, S.C. 2023, c. 31.
Federal Real Property and Federal Immovables Act, S.C. 1991, c. 50.
Prohibition on the Purchase of Residential Property by Non-Canadians Act, S.C. 2022, c. 10, s. 235.
Case Law
Bell v R, [1979] 2 SCR 212 [Bell].
Fodor v North Bay (City), 2018 ONSC 3722 [Fodor].
Ronald Death, et al. v Neighbourhoods of Windfields Limited Partnership, et al., 2009 ONCA 277, C49460 [Death].
Articles
“Federal properties for sale” (2023) Government of Canada, online.
Gauthier, James & Carter McCormack, “Housing, wealth and debt: How are young Canadians adapting to current financial and housing pressures?” (2024) Economic and Social Reports, online.
Infrastructure Canada, “Solving the Housing Crisis: Canada’s Housing Plan” (2024) Government of Canada, online.
Landlord and Tenant Board, “Residential rent increases” (2023) Government of Ontario, online.
Municipal Affairs and Housing, “More Homes Built Faster Act, 2022” (2022) Government of Ontario, online.
Statistics Canada, “Nationally, renters report lower quality of life than homeowners” (2024) Government of Canada, online.
Statistics Canada, “Research to Insights: A look at Canada’s economy and society three years after the start of the COVID-19 pandemic” (2024) Government of Canada, online.
Government Documents
Canada, Department of Finance Canada, Budget 2024 (DFC, 2024) online.
Endnotes
5 Canada, Department of Finance Canada, “
Budget 2024” (DFC, 2024) at 27 online.
7 Affordable Housing and Groceries Act, S.C. 2023, c. 31.
8 Budget 2024,
supra note 5 at 32.
12 Federal Real Property and Federal Immovables Act, S.C. 1991, c. 50.
13 Bell v R, [1979] 2 SCR 212 at 213 [Bell].
20 Fodor v North Bay (City), 2018 ONSC 3722 at para 1 [Fodor].
21 Ibid at paras 1, 8 & 13.
24 Ibid at paras 20, 52 & 64.
25 Ibid at paras 43, 44, & 45.
26 Ronald Death, et al. v Neighbourhoods of Windfields Limited Partnership, et al., 2009 ONCA 277, C49460 [Death].
27 Prohibition on the Purchase of Residential Property by
Non-Canadians Act, S.C. 2022, c. 10, s. 235.
33 Budget 2024,
supra note 5 at 41.