Build that belt!
Ontario PC leader Doug Ford recently proposed rezoning part of the “Greenbelt” around the Greater Toronto Area, allowing developers to build single-family homes using some of the large supply of urban fringe land to address Toronto’s severe housing affordability. This was a unique proposal, because without competitive development on the urban fringe, Toronto’s housing affordability is likely to continue as an impossible challenge for many middleincome households. Regrettably, Ford was pressured to withdraw the proposal.
The Ontario government’s “Places to Grow” policy has been associated with Toronto’s severe housing-affordability crisis. “Places to Grow” largely outlawed the mass production of housing on the urban fringe, a phenomenon that had made housing affordable to middle-income households across Canada. No longer were there lowcost starter houses, as prices were driven up, rippling across the entire greater Metro area.
The median house price for the Toronto CMA, the census metropolitan area (including all owned properties, and after the foreign-buyers tax), virtually doubled relative to median household incomes between 2005 and 2017, according to the Demographia International Housing Affordability Survey. This has imposed a serious burden on people aspiring to own their own homes, especially aspiring younger families who are now denied the lifestyles their parents enjoyed.
Things have changed much in the last 15 years. For decades, middle-income housing had been affordable in the Toronto CMA and the Greater Golden Horseshoe. In the pre- “Places to Grow” environment, there was a progression of land values from a competitive “floor,” with the cheapest land on the urban fringe, and values gradually increasing to the most expensive towards the urban centre, as is the case for property markets in other metropolitan areas around the world.
There is general agreement that restoring housing affordability requires a substantial increase in housing supply. However, those who oppose expanding the suburbs propose instead a densification of single-family neighbourhoods — called the “Yellowbelt,” reflecting the colour used to indicate them on planning maps — as the solution. According to The Globe and Mail, the Yellowbelt is more than 20,000 hectares, and larger than Scarborough and nearly twice as large of Etobicoke or the city of Vancouver.
But, it is unlikely that Yellowbelt development will improve housing affordability. Land values in the Yellowbelt are already high and so denser development there would not moderate housing costs nearly as much as a competitive urban fringe market would. Further, as research from Ryerson University indicates, improving housing affordability requires increasing the supply of ground-oriented (singlefamily) housing, not more multi-family condos and townhomes. Households have differing housing needs and the supply needs to reflect that. Not all houses are the same.
Higher-density Yellow-belt development could also make Toronto’s horrific traffic congestion even worse, with additional quality-of-life compromises. And there is no point in trying to invoke the mantra of “public transit” as the solution: most jobs in the CMA are beyond reasonable commuting time by transit, and no current proposals would change that.
The Ontario government’s foreign-buyer tax has so far stopped the virtual houseprice hyperinflation among the Toronto area’s most desired and speculatively attractive houses. But this has not improved middle-income housing affordability. Toronto Real Estate Board data show that monthly price increases among the least-costly houses — condominium apartments — have been double those of wages, as reported by Statistics Canada.
Unless the competitive market for land is restored on the urban fringe, it is unlikely that housing affordability will be materially improved. This does not require the low-density development, or “sprawl,” of suburban Boston or Atlanta, which have less than a third of the urban density of Toronto’s 905 suburbs. Indeed, Toronto is the least “sprawling” of any large urban area in Canada — or the United States. The planning policies that preceded “Places to Grow” produced this by permitting a competitive market for land on the periphery.
As Paul Cheshire, Max Nathan and Henry Overman of the London School of Economics have argued, urban policy needs to focus on people, rather than “place.” The “Places to Grow” Greenbelt plan takes insufficient account of people by largely ignoring the largest element in the household budget, housing costs, which lowers the living standards for many Greater Toronto Area residents (and that will only get worse as mortgage rates continue rising). “Places to Grow” has made it more difficult for low-income residents to afford decent housing and more difficult for governments to fund housing subsidies that voters have demanded for families who need the help.
The likely continued deterioration of middle-income housing affordability will make solving the problem even more difficult. This could lead to understandable and substantial support for destructive policies like rent control, as more households are excluded from the housing aspirations that were so readily available to previous generations.
Doug Ford and the PCs could have a once-in-a-generation opportunity to effectively deal with the housingaffordability crisis. It is time for a serious rethink of the Toronto-area housing policy, with a focus on putting the right priorities first. People are more important than place.
THE PCs HAVE A ONCE-IN-A-GENERATION OPPORTUNITY TO EFFECTIVELY DEAL WITH THE HOUSING AFFORDABILITY CRISIS.