Housing crisis worse than sprawl ?

Toronto home prices are still on the rise. As of last month, the average residential sale price was 33 per cent higher than it was the year before. Looking for a detached home in the centre of the city? Prepare to spend around $1.6-million (give or take a few hundred thousand). It’s not a whole lot better in Toronto’s suburbs. According to the Toronto Real Estate Board, the average home price in the entire Toronto metro area is still over $900,000.

“I have a deep concern about the frustration that must be faced by young homebuyers trying to get in this market and just by people trying to move up in their housing,” the city’s mayor John Tory said to Bloomberg Television. Nonetheless, Tory says, there’s no general agreement on what’s driving prices up this high or what to do about it.

Somehow, I can imagine people scoffing at this conclusion. What about the foreign buyers’ tax, or the tariff on vacant homes, both of which have been proposed as tools to cool down the Toronto market? Yet, I think Tory is right. It’s far from clear that more interference in the natural supply and demand for housing is what’s called for.

Though not the only guilty party, Ontario’s landuse regulation policies (particularly the 325 square kilometre restricted Greenbelt area, which has significantly limited suburban growth in the greater Toronto area) is certainly a contributor. So is the purposeful push towards greater density.

As author Randal O’Toole has noted in the context of the United States, the densest areas of a city are usually the most expensive ones. Thus, in trying to cure the ills of traffic headaches and greenhouse gases by legislating against sprawl in the Toronto area, we’re inadvertently contributing to the disease of housing few people can afford.

One way to look at the trade-off is to ask, which is more debilitating to a lowincome family that wants to live and work in Toronto — only being able to afford a home in a distant exurb that entails a long commute to work, or not being able to afford any home in the Toronto area at all?

For a family that wants to settle in the city, it’s hard to see how the former is an improvement over the latter, even if we can all agree that the latter isn’t ideal.

Relentlessly, planners have painted sprawl as an unpleasant enemy of community, the environment, public health and probably a bunch of other virtuous things of which I’m not even aware. For all I know, they’re completely right. But it’s unhelpful to ignore or forget the consequences of the alternative: legislatively limiting sprawl makes urban housing pricier.

It also tends to drive lowincome and minority buyers out of cities, which is arguably a more serious threat to community — and a lot more socially disadvantageous — than a preponderance of alienating strip malls and sub-optimal traffic flow.

“Census data shows that high housing prices are pushing low-income black families out of many (U.S.) urban areas,” O’Toole said in a Washington Post op-ed last fall.

He pointed to the San Francisco/Oakland area, where the population as a whole grew by 10 per cent from the year 2000 to the year 2010, but the population of blacks fell by 14 per cent.

The question of whether it’s ethically justifiable to prioritize farmland or open space (as in Ontario’s Greenbelt) over a person or family’s ability to have a private home to live in — particularly a disadvantaged person or family — is not a trivial one. These are high stakes.