Markham loses over $7 million in federal funding after blocking fourplexes with 'strong mayor' powers

The decision means that Markham will receive $7.36 million less than expected from the CMHC administered fund, designed to boost Canada’s housing supply. 

Scarpitti responded to the news by saying the federal government should increase the city’s funding, rather than cut it.

He said penalizing his municipality will slow down housing construction in a city that has “overshot” its HAF commitment of delivering 1,640 units with the funding it had. “Through our partnerships with non-profits and builders, we actually were delivering 1,963 units,” Scarpitti told the Star, adding that most of them are rental units.

“I say we shot it out of the park as far as I’m concerned,” Scarpitti said.

In an emailed statement, a spokesperson for CMHC said Markham was one of few cities that didn’t follow its plan. “The majority of the nearly 240 communities with Housing Accelerator Fund (HAF) agreements are implementing their Action Plans as expected.”

“As part of the annual reporting process, Markham was found to be non-compliant with its HAF agreement and specifically its commitment to implement four units as-of-right zoning citywide,” CMHC said.

Markham received an initial payment upon signing its HAF agreement with the federal government in January 2024, but CMHC reiterated that subsequent annual installments are “conditional on communities following through on their commitments.”

The CMHC spokesperson said it is now waiting for Markham to “propose actions they will take to meet their commitments,” urging them to follow through on “the commitments that they themselves set out in their HAF Action Plans.”

Markham councillor Amanda Yeung Collucci, who supported the mayor’s decision to veto council’s 7-6 vote in favour of fourplexes, said she doesn’t think the government should withhold funding because allowing fourplexes in residential areas encourages property speculation and increases competition between “capital and income-based ownership.”

“When you’re turning homes into a business, that is a huge problem,” Collucci told the Star.

“It’s not the developers who will be building those fourplexes,” she said, adding the policy would incentivize property owners to divide single-family homes into four units, resulting in the conversion of homes into income-generating assets.

Scarpitti said his focus remains on “getting additional housing units into the marketplace.

“They are in different stages of approval,” he said. “Some are just finalizing their zoning, some are almost in for building permits. So we’re going to see shovels in the ground here in Markham because of this program.”

So far, just one project has begun construction, but Scarpitti says the program’s success has resulted in Markham having a waiting list of potential partners that could deliver an additional 1,500 to 1,900 units if more funding is acquired.

“For every dollar you cut back in this program … you put these housing units in jeopardy,” Scarpitti said. “I tried to be very clear on that, that at the end of the day, the program has worked well here.”

Though he believes Markham will be able to deliver most of the housing units it currently has in its pipeline, he said the $7.36 million loss could have an impact on the projected delivery.

“Staff are still reviewing some of the implications of this.”