The prime minister isn’t afraid to tie money for programs to housing affordability measures to get provincial or municipal governments to take action on housing, according to people attending Friday’s housing round table.

Justin Trudeau listened to about two dozen experts on their thoughts on how to contain Vancouver’s runaway housing prices, but also signaled his interest in using federal dollars as leverage, they said.

“He said, ‘I’m not afraid to be the heavy and lean on other levels of government to do the right thing,’” said Geoff Howard, an employment lawyer invited to the round table.

“Saying: if you want federal money, we may ask you to commit to things. Densification, for example,” Howard said.

Trudeau said the federal government does have tools that could help address the housing unaffordability crisis in Vancouver, but any measures must be rolled out carefully so other Canadian housing markets won't be hurt.

The prime minister attended the roundtable on the heels of announcing a massive funding injection to public transit in the region. At the meeting, he was presented with a varied list of causes of Vancouver’s famously high prices – prices so high that 91 per cent of the homes in the city of Vancouver are valued at $1 million or higher, according to research by Simon Fraser University's Andy Yan.

Speaking to CTV Morning Live before the meeting, Trudeau said he’s willing to listen so the federal government understands the cause of the housing crisis and moves correctly to solve it.

“It’s an urgent situation to deal with,” he said.

Among the causes discussed on Friday were low interest rates, a failure to enforce laws that would tax house flippers, Airbnb customers outbidding local renters for stock, a failure to encourage new construction, a lack of easy transit and transportation, and foreign money outbidding locals.

Trudeau told CTV Morning Live that he was aware of the role offshore money has played in Vancouver's overheated real estate market, but said it's only the one piece in a very complex puzzle.

"We want to be drawing in money from overseas to continue to make this an extraordinary city, but we need to make sure we're doing it in such a way people can afford their homes," he said.

The federal government "does have some pretty big tools and levers to pull" when it comes to cooling housing markets, including tax policy on home construction, interest rates, and taxes on foreign buyers.

But he said he would only use any of those with caution, saying that they could also have unintended consequences in Canadian housing markets that aren't facing the same pressures as Vancouver and, to some extent, Toronto.

The prime minister said a solution needs to be targeted directly at the Vancouver market, and that it would require "better collaboration with the province and the municipalities and the mayors."

It’s the kind of leverage that levels of government can use to force others to make unpopular choices. For example, he forced the fractious B.C. government and Lower Mainland municipal governments to sign a transit accord by first offering $370 million in funding – and threatening to walk away if they didn’t match it.

The B.C. government used the dollars it would pay for school upgrades as leverage too: it would only pay that money if Vancouver could guarantee its schools were operating at 95 per cent capacity – a hardball move that has pushed the Vancouver School Board to the unpopular decision to close as many as 21 schools.

In the Bank of Canada's semi-annual review released last week, economists warned of the possibility of a sharp correction in real estate prices in the Vancouver and Toronto markets.

The central bank said the continued rise in household debt had skyrocketed, even within the past six months, and there were few signs it would slow down.

Recent measures from Ottawa to address housing affordability, including requiring a larger down payment for homes over $500,000, has had little effect in Vancouver, where the benchmark price of a home hit an all-time high in May.

Andy Yan, whose research showed the $1 million houses spreading across the city, said after a long time of federal inaction he was hopeful.

“The last time the federal government did anything creative here there was another Trudeau in the Prime Minister’s Office,” Yan said.

Yan’s maps show the $1 million dollar line creeping across the city to the point where almost all homes are valued at more than $1 million. Now, he says, it’s worth watching the $2 million line, which is now at Main Street, and moving east.

Animation below, created by Yan, shows the line's movement over time.

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