What the Democrats can learn from Canada's Liberal party on housing

Canada's center-left party wants to “get the federal government back in the business of building homes.” What do Democrats want?

Whose housing platform comes out on top, Kamala Harris’ or Mark Carney’s? (Credit: Gage Skidmore via Wikimedia commons/ White House via Wikimedia commons.)

A version of this article originally appeared in Planetizen. It is republished here with permission.

Canada, like many countries around the world, has a Donald Trump problem.

Trump’s tariffs and annexation threats were top of mind when Canadians went to the polls last month to elect a new prime minister. Mark Carney, Justin Trudeau’s successor as the leader of the center-left Liberal party, rode a wave of anti-Trump sentiment to victory against the more Trump-aligned Conservative candidate, Pierre Poilievre.

But Trump was not the only storyline in Canada’s election. Americans would be wise to take a closer look at another major issue in the race: Housing.

Carney’s housing platform in some ways resembles that of the Democratic nominee for president in November, Kamala Harris. But Carney’s platform deviates from that of his center-left American analog in crucial ways. It’s worth examining each candidate’s housing platform to see where the Democratic party falls short compared to global peers.

Harris’ housing pitch

According to her housing platform, Harris sought to spur housing construction through tax breaks to developers of starter homes, a $40 billion “innovation fund” that would give grants to affordable housing developers experimenting with new development models, opening up some federal lands for development, and a promise to “cut red tape and needless bureaucracy.”

She also planned to tame high housing costs by reining in Wall Street investors in single-family rental homes and cracking down on algorithmic rent-setting software. Finally, she proposed a $25,000 tax credit for first-time home buyers and increasing rental assistance programs. Overall, Harris’ plan mostly relied upon expanding existing housing programs rather than creating new ones.

All told, Harris called for the construction of 3 million new homes over four years. Harris did not specify whether those 3 million homes would be in addition to current rates of housing production, which have averaged roughly 1.5 million units annually in recent years. Assuming her campaign meant 3 million homes over current production levels, Harris’ goal would’ve been to increase housing production by about 50%.

Carney’s ambitious vision

In his housing platform, Carney calls for a new government entity that will “get the federal government back in the business of building homes.” Carney offers a rhetorical call back to Canada's public housing program, which, like the parallel program in the U.S., effectively ceased to construct new homes decades ago. This entity, Build Canada Homes, would directly develop large-scale affordable housing projects on public lands, and provide grants and loans to other developers. It would have a C$26 billion funding pool to jumpstart the modular construction industry in the hopes of reducing the cost and time it takes to build housing. BCH would also be structured to stimulate the Canadian lumber industry and provide new opportunities for the building trades.

Carney also proposes a number of tax and administrative changes to improve affordability. He calls for halving municipal development charges that drive up construction costs, creating new tax breaks for multifamily housing developers, and incentivizing landlords to sell their buildings to the government or affordable housing providers. First time homebuyers would also see a tax credit of up to C$50,000.

All told, Carney calls for half a million new homes per year, roughly double current rates of housing production.

Who comes out on top?

If Carney’s housing platform sounds more specific, that’s because it is. It’s also more ambitious. His housing production goals, alone, are double Harris’, on a percentage increase basis. That’s feasible because of his proposal to directly involve the federal government in housing development.

Build Canada Homes is aligned with the global social housing movement, in which governments directly develop large-scale, mixed-income residential projects. In many European and East Asian countries, public development corporations have become significant real estate players. By developing large numbers of homes on public land, often in architecturally striking complexes closely linked to public transit, these agencies can shape the overall housing market and lower average prices. They can benefit from economies of scale and cross-subsidization, wherein the rents of higher-income tenants directly subsidize rents of their lower-income neighbors.

Carney’s explicit mentions of modular construction technology, timber and building material supply chains, and labor show how housing policy can be linked to industrial policy. A robust housing policy can help achieve a wide array of geopolitical and economic development goals, in addition to providing people with affordable places to live.

Harris’ tax breaks and innovation fund, meanwhile, would have largely maintained America’s privatized and decentralized affordable housing system. Local governments and non-profits like CASA, a North Carolina affordable housing provider approvingly cited in her platform, would surely benefit from increased funding opportunities. But it’s unclear what kind of innovation this funding pool would incentivize, how those innovations could be scaled across jurisdictions, or how they might benefit workers or homegrown industries. It’s hard not to see Harris’ housing policy as simply a better funded version of the status quo.

Harris’ promise to fight corporate landlords of single-family homes is echoed in the platform of Canada's leftwing New Democratic Party led by Jagmeet Singh. That’s a reflection of the big tent nature of America’s two-party system, in which the Democrats must embrace a wide array of policies ranging from moderate to progressive. In Canada’s multi-party system, by contrast, each party reflects a narrower slice of the political spectrum.

The NDP faded in the polls as liberal Canadians, alarmed by Trump’s threats, coalesced around Carney. However, last year, the housing policy Harris had in common with the NDP appeared to resonate. An ad in which she promised to “crack down on landlords who are charging too much,” was one of her best-performing of the campaign, according to pollster David Shor. Some political analysts say her campaign would have been more successful had she emphasized these kinds of economic-populist messages.

Whatever the reasons, Harris was defeated by a president who is now working to dismantle America’s already meager affordable housing system. Perhaps, Canada will be able to show its neighbor (or, it’s neighbour…) that when it comes to housing, bolder is better.