The federal government offered cities millions to change housing rules. Some were pushed into fights they were not ready for while others used the money to move faster on existing plans.

Edmonton is in the second group and one of the top-performing cities under the federal program.

In February, the city council had a chance to pull back on one of its most contested changes: rules that allow several homes on lots once limited to one, in the form of triplexes, fourplexes or more. Some residents in older neighbourhoods had complained about new homes rising on streets lined with bungalows. They worried about parking, trees, shadows and buildings that felt too large for the block.

Council agreed to make some small buildings shorter — but it kept the larger change in place. In many Edmonton neighbourhoods, a large enough residential lot can now hold up to eight homes.

The change was part of Edmonton’s $192.6-million deal with Ottawa through the Housing Accelerator Fund — a federal program that pays cities to change housing rules, speed up approvals and allow more homes on lots.

But Edmonton had been moving in that direction for a decade. “The funding in the program has allowed the City of Edmonton to truly lean into the term ‘accelerator,’” said Edmonton Mayor Andrew Knack in an interview with Canada’s National Observer.

For Edmontonians, the result was a more gradual change, capped off with the ambitious new rules. That wasn’t the case everywhere, and the result has been mixed. 

“Calgary and most other Canadian cities sort of went from zero to a hundred overnight and that created that shock.”

Calgary approved more homes on residential lots after signing a $228-million federal deal — but voted in April to repeal the change, a move that will come into effect in August.

The Canada Mortgage and Housing Corporation (CMHC), the federal housing agency that runs the fund, says most of the nearly 240 communities with agreements are doing what they promised. 

Leonard Catling, a CMHC spokesperson, told Canada’s National Observer more than 90 per cent of large and urban agreements included a change to allow some housing without extra approvals and all included at least one change to local housing rules. Of the communities that promised to allow more homes across the city through rezoning, roughly 85 per cent have already done so.

The Housing Accelerator Fund pushed many cities to change the local rules that decide whether one lot can hold only one house or several homes. Three terms come up often in that discussion.

Zoning: Zoning is a land rulebook that sets what can be built on a property, how the land can be used, how large or tall a building can be and how many homes are allowed on a single lot. Across Canada, large parts of residential neighbourhoods have been mainly reserved for detached houses, often called single-family homes. 

In 2021, single-detached houses still made up just over half of Canada’s homes, down from 57.5 per cent in 1986 to 52.6 per cent.

Catling said when zoning rules are too restrictive, they can prevent housing from being built. “A primary focus of HAF is ending exclusionary zoning; the practice of restricting density and different forms of housing,” he said. 

Rezoning: Rezoning is the formal process of changing those rules so a different kind of building can be built on the same lot. CMHC describes rezoning as the extra process a builder may need before building something not already allowed. On CMHC’s In-House podcast, Chris Woodcock, head of the Housing Accelerator Fund, said the fund aimed to avoid “a lengthy, expensive, and time-consuming process” to get a zoning waiver or rezoning proposal. 

Upzoning: Upzoning means increasing what can be built, such as allowing more homes on one lot, taller buildings or different housing types. In the first round in 2023, cities had to submit housing plans showing how they would remove local barriers and add homes faster. CMHC says the stricter rule came in the second round a year later: large and urban applicants had to allow four homes on a lot citywide as-of-right (meaning builders would not need a separate rezoning vote before applying for permits). CMHC also encouraged cities to allow six to eight homes on corner lots or large lots where appropriate.

Catling said the program was created because municipal leaders, industry groups, academics and all levels of government had reached a broad agreement that local rules and slow approval systems were blocking new homes. The Canadian Urban Institute and the Federation of Canadian Municipalities were consulted as the program was developed. 

Unlike federal programs that fund specific housing projects, “HAF is a little bit different, because it’s based on achieving long-term reforms and so what we’re paying for is those reforms,” Chris Woodcock, CMHC’s head of the fund, said on its In-House podcast.

In some cities, those reforms helped speed up work already underway.

Cities that were ready

Knack said Edmonton had already decided that pushing most new homes to the edge of the city was too costly. Continued outward growth was financially and environmentally unsustainable and suburban growth has been “the single biggest cost driver” for Edmonton property taxes over the past three decades, he said. 

The city began changing its housing rules in 2015. At the time, most new homes were going up beyond Anthony Henday Drive, the ring road around Edmonton, while many older neighbourhoods inside the ring were losing people.

That meant fewer children in some schools, fewer customers for local shops and fewer options for people who wanted to stay in a neighbourhood as their lives changed. In many older areas, Knack said, the choice was between a detached house and an older apartment building.

“If you wanted anything else, you actually had no choice,” he said.

Rows of townhouses in Edmonton. The city has changed its housing rules over the past decade to allow more kinds of homes in more neighbourhoods. Photo by Joshua Daiz / Unsplash.

Edmonton’s council gradually changed that, starting with rules that allowed some 50-foot residential lots to be split into two 25-foot lots, turning one house into two narrower homes. Over time, the city opened the door to more backyard homes, rowhouses and small multi-unit buildings. Knack said when the city allowed more homes more broadly, it was still controversial, but it was not a total shock in many places.

The city is also using federal money to upgrade pipes, sewers, sidewalks, alleys, street lights and power lines so older streets can handle more homes.

Knack pointed to Ritchie, a residential neighbourhood south of the University of Alberta, as one place where more homes have helped support a busy local hub of restaurants, shops and services. More people nearby have helped businesses survive and made the area feel more alive.

Knack said Edmonton’s willingness to allow more homes, along with lower municipal fees, has helped keep the city among Canada’s most affordable major housing markets. Homes in Edmonton cost roughly $200,000 to $300,000 less than in Calgary. An average single-family home costs just under $500,000.

In Waterloo, Ont., the federal fund helped move nine goals forward, including online permits, faster approvals, more backyard and basement homes, parking changes, public land for housing and incentives for affordable homes. Waterloo is home to about 140,000 people and has three post-secondary institutions and little open land left at its edges.

Michelle Lee, the city’s deputy commissioner of strategy and innovation, described the city as small enough that a few million dollars can change what city hall can do, but big enough to feel the housing crunch every day. The city received $23.3 million from the federal government to assist with its work.“The values and objectives were perfectly aligned with what the city was already doing and wanted to continue to do,” Lee said.

Saskatoon had been working since 2016 to allow more homes along major roads and future bus rapid transit routes. The federal deal — $41.3 million — helped move those zoning changes faster.

“It became obvious that this was an opportunity to really advance the goals of that plan,” said Lesley Anderson, Saskatoon’s director of planning and development.

Highrise buildings line a concrete road in Waterloo, Ont. Photo by Caleb Williams / Unsplash.

The fund also pushed Saskatoon to allow four homes on a lot across the city, an idea that City Hall had previously considered but had struggled to move forward because of public resistance. Anderson said builders are now looking at four-unit homes, a type Saskatoon has not seen much of to date.

Winnipeg had wanted to allow more housing in targeted places: duplexes, triplexes and some fourplexes in key neighbourhoods, including housing on major commercial streets and mall sites, said Lissie Rappaport, a City of Winnipeg housing official. The $126.45 million federal deal pushed that work citywide.

It also allowed the city to hire people to do the work. Before the fund, the city had one staff position focused on both regular and affordable housing; the money helped build a seven-person team.

“I think the federal HAF initiative pushed our city in a really positive way,” Rappaport said. “It equipped us to handle and respond to housing and affordable housing issues.”

The broader test

Economist and housing policy expert Mike Moffatt said the federal government created a tension for itself. The fund was sold largely as a way to get cities to allow more homes through rezoning, he said, but the federal government never made clear how much funding depended on that one change.

Moffatt said that ambiguity became more important once some cities began reversing or limiting the zoning changes tied to their agreements. 

“When cities started to not upzone, the rhetoric changed around how vital that component of the program was,” he said.

Catling, the CMHC spokesperson, said zoning was a major part of the fund: large and urban communities had to allow four homes on a lot across the city. But interviews and responses from other cities including Surrey, Toronto, Halifax, Vancouver and Ottawa show the program was not only about zoning changes.

Toronto also shows the program’s mixed results. Jason Thorne, the city’s chief planner, said many housing-rule changes were already underway before the funding was awarded, including the introduction of garden suites, laneway suites and fourplexes. But when the accelerator fund pushed the next step, sixplexes, citywide, council approved them in only nine of 25 wards. As a result, Toronto lost a small amount of its original $471.1 million funding.

Andy Fillmore, the mayor of Halifax, said the city is dealing with record growth and major investments in defence, shipbuilding and ocean technology. The accelerator funding helped it move faster to approve townhouses, backyard suites and small multi-unit homes, particularly near transit hubs. The city also lowered parking requirements, adopted pre-approved building plans to help build faster, and encouraged builders to convert unused commercial space into housing.

Townhomes in Canmore, Alta., where many homes are used as short-term rentals or vacation properties. Canmore applied to the federal Housing Accelerator Fund, but CMHC rejected its application in 2024 after finding it did not meet the program’s bar for bold housing changes. Photo by Unsplash.

Catling said that while zoning was a major part of the program, it was never the whole point and the federal agency does not rank one promise above another. He said cities could use the fund to speed up permits, digitize approvals, use public land for housing, support secondary suites and backyard homes, encourage commercial-to-residential conversions and lower building costs.

He added cities can put funding at risk if they miss deadlines or reverse commitments, though CMHC can adjust timelines or plans when they still help get homes built faster.

Woodcock said the fund is showing early signs of movement. “In the first year, as a group, HAF communities grew faster than communities that weren’t participating in the program,” he said. 

He said it will take longer to see the full extent of change driven by the program because builders still have to respond after cities change their rules. 

“The system has to respond. The market has to respond. Developers change their proposals,” he said. “It’ll be some time before we can really substantiate the long-term effects.”

Sonal Gupta / Local Journalism Initiative / Canada’s National Observer.