Feds call out St. John's on a housing proposal because it's not ambitious enough

Federal Housing Minister Sean Fraser says a City of St. John's application for money to build more housing through the Housing Accelerator fund "falls short of the ambition" he's hoping to see.

"The city applied for only $2 million reflecting a desire to build only 91 additional units," reads aletter that Fraser sent to St. John's Mayor Danny Breen on Oct. 5. CBC News has obtained a copy.

The $4-billion Housing Accelerator Fund, run by the Canada Mortgage and Housing Corp., aims to boost the supply of housing in the country by a dramatic scale.

CMHC estimates that 3.5 million homes need to be built in Canada to tackle a countrywide housing crisis, with 60,000 homes needed in Newfoundland and Labrador alone by 2030 above the normal rate of construction.

"The housing crisis has far reaching consequences, ranging from exacerbated levels of homelessness, to increased precarious living arrangements, and including middle-class families who can no longer afford to rent or even imagine they will own a home one day," said Fraser'sletter.

The housing crisis in St. John's has come into focus this month through a tent encampment across the street from Confederation Building, the centreof the provincial government.

People at the encampment have repeatedly said they want stablesolutions to housing rather than being directed to crowded emergency shelters.

CBC News requested an interview about the letter with Breen. An official said the city was not in a position to comment until officials discuss the feedback from the feds.

"The City of St. John's is appreciative of the feedback it has received on its proposals and is in the process of reviewing the recommendations made by Minister [Fraser]," reads an emailed statement.

A second statement from the city said staff are looking for ways to strengthen the proposal and that they will respond to the federal government's recommendations.

'Let's turn it up to 11,' O'Regan says

Seamus O'Regan, the federal labour minister and a St. John's-areaLiberal MP, told reporters Friday that the housing crisis is a top priority for his government and he, too, wants to see St. John's up the ante.

"We're saying, 'Look, you could be more ambitiousthan that, we need to be more ambitious than that.' Frankly, we've got a significant housing issue in this province from across the country and people know it," he said.

"Let's ramp it up, let's turn it up to 11.We really are focused on this."

O'Regan said the federal government just signed an agreement with the City of Halifax to build 10,000 units of housing over the next decadeand would like to do something proportional in St. John's.

He also said municipal governments are closely tied to housing and said the feds have the resources to work with all levels of government to solve the housing crisis.

"So we will work with the cities where they are, with the problems that they have and we will tailor a solution to those cities," he said.

"We're putting the money up in other cities. We're signing deals with other cities. We're just saying, 'Look, be more ambitious, give us a more ambitious plan. You'll be surprised how far we may be willing to go to help you get there.'"

Minister seeks more housing in downtown, near campuses

Fraser recommends the cityreduce the time to implement an electronic permit application process from five years to one year, reduce taxes on affordable housing units, allow four units to be developed in the zoning regulations and increase density near post-secondary institutions and in the downtown.

The housing minister also wrote that three Newfoundland and Labrador members of Parliament O'Regan, Joanne Thompson and Gudie Hutchings have requested thatSt. John's be "given an opportunity to strengthen its proposals."

Housing researcher and consultantHope Jamieson told CBCNewsthe letter indicates the housing crisis is starting to be treated with the level of urgency it deservesbutsmall municipalities often have capacity issues to deal with housing.

Jamieson, a formerSt. John's city councillor, said municipalities and community organizations usually have a short window to apply for CMHC programs, leaving them with little time to create the kind of ambitious plan the feds are looking for.

Jamieson also said ongoing housingoperating costscan be significant and are often unaccounted for in funding programs.

"So I think it makes sense that the city might have looked at its own internal capacity and said, 'We don't have the money to operate more units of housing, so we need to facilitate other people creating that housing,'" theysaid.

Jamieson also said $2 million in funding isn't enough money to translate into 91 units of housing.

Download our free CBC News app to sign up for push alerts for CBC Newfoundland and Labrador. Click here to visit our landing page.