Crunch-time for housing
The Ontario Housing Affordability Task Force released its final report Feb. 8 after two months of consultation and study. It offers bold reform to boost housing supply. The ball is now in the province’s court to decide which recommendations to adopt; the province would be wise to adopt as many as it can.
The debate on why housing costs are so high is settled. Study after study shows supply restrictions are behind the price rises. One C.D. Howe Institute study shows delays and extra costs add hundreds of thousands of dollars to home costs.
The government has focused on boosting supply before.
In 2019, it announced a Housing Supply Action Plan and a first package of legislative and regulatory changes. (Full disclosure: I worked in the government during that period and helped design those.) Many local governments reacted negatively; some of the changes were then reversed.
Now, the government will need to respond to the task force’s high benchmark for change with even more ambitious reforms. It will not be politically easy.
Many young Ontarians — as well as their families — will want action to bring on new housing supply with related increases in affordability. On the other side of the ledger are residents who don’t want construction of multiple homes to affect their neighbourhood. Local councillors respond to local voters. Hence, local councils will usually oppose deeper reforms that could result in more homes.
Let’s consider one of the task force’s most contentious, but potentially most effective, recommendations at boosting supply: that the province make all residential areas of the province allow up to four units per lot.
This would mean that a developer would not need a lengthy process of community consultation, then government approval, to construct such a building. No surprise, few such structures get proposed and built. The task force’s proposed change would eliminate a lot of risk that developers would need to take on today if they proposed such a building.
Local officials have already started complaining that the task force’s recommendations would trammel on their zoning authority. Local councillors and mayors will call the Minister of Municipal Affairs and Housing. They will call their MPPs. The government will try to appease.
If the province goes too far in appeasing local governments, say by making zoning reforms optional, the rest of the plan carries no weight.
Cities across the province will likely reject changes if given the option. And if it’s a unified opposition from the municipal sector, it will make any further action hard. We’ll be back to where we are now. There would be lots of political pain, but little action to help homebuyers. That’s the worst-case scenario for all.
The province should set out clear parameters for which zoning reforms, among the many other reforms, are mandatory for cities to implement.
For example, zoning reforms could apply in all areas of the largest cities in the province. At a minimum, the province could make the zoning increase mandatory in specific parts of cities — around transit stations, for example. Or mandatory in areas in which the existing density is close to, but still below, the ideal density from more intensive development. Such a change would result in a gradual, but growing supply of land that is automatically at higher zoning level than now.
Furthermore, the province needs to recognize that any changes to zoning will have the short-term cost of slowing down the development process.
As cities and developers digest provincial changes, existing plans slow. If the provincial changes aren’t bold enough, the short-term costs could outweigh the long-term benefits.
Ontarians need to know there’s no other government coming to the rescue on housing affordability. If the province doesn’t act, the federal government cannot fix the housing crisis. And neither can cities if the rules that govern planning don’t change. It’s the province that sets the planning game, and the game needs changing. The time for bold change is now.
If the province goes too far in appeasing local governments, say by making zoning reforms optional, the rest of the plan carries no weight