Province sets housing affordability trap in Toronto

If the province is successful, the Toronto of 2050 could be much less affordable than it is today. Doug Ford says we need 1.5 million new homes over the next decade to meet demand and the Prime Minister has promised to build at a pace not seen in decades to meet that goal.

Most Ontarians know we are in a housing affordability crisis, but the province is reframing this as housing supply crisis to justify building where developers want to build. To that effect, this week the Minister of Municipal Affairs and Housing announced a toolkit of advanced tools to cut red tape, remove fees and levies for developers and conservation authorities.

First, we have to ask ourselves, do we even need millions of new homes? And can they even be built? A recent analysis points out that if Ontarians continue to form larger households (or families) than the Canadian average, we will probably only need 40% of these units. Others pointed out that in Toronto, tens of thousands of units already approved by the planning department are not being built, waiting for the right market conditions. This month, CMHC admitted that labor shortages alone could make that supply target unattainable.

Second, will the new supply drive affordability? Even if we were to build 1.5 million housing units in Ontario in a decade, new supply would take decades to “trickle down” to produce affordable housing. This filtering process, whereby new units age and lose quality and therefore eventually decline in price, only works for a small portion of high-rent units.

In the short term, new construction at market prices can trigger displacement, with more low-income households leaving these neighborhoods than moving into them. Case in point: Toronto’s nearly two-decade condo boom produced hundreds of thousands of units, with less affordability rather than more.

The supply of new housing could reduce rents in nearby properties to market rates, but raise the rent for older, more affordable units, as new amenities signal to landlords that the neighborhood is up and they can charge more. Also, when we build new condo towers, we often tear down older affordable apartments. This means that when we build new supply at the market rate, we actually lose affordability; we’re just treading water.

And finally, we should ask ourselves: what is built and at what cost? Will it be more of the same “high and wide” development? Will the downgrading of our conservation authorities pave the way for freeways and hasten the loss of prime agricultural land we need to feed our growing population, currently being bulldozed at the rate 319 acres per day? Remote homes will no longer be accessible for those struggling to pay rent and take public transportation to work. But spreading is quick and profitable.

To this end, we praise one of the tools offered by the province: the elimination of exclusion zoning in municipalities to build missing intermediate housing in existing neighborhoods. Early evidence, however, suggests that “missing middle” homes are being delivered at market prices, even driving up land values ​​and making these neighborhoods more exclusive. Policies, programs and funding from all levels of government should focus on creating affordable and equitable middle-income housing.

The provincial announcement reveals an implicit theory that zoning by-laws, development charges and appeals are delaying construction. The reality is much more complex, with rising material costs, labor shortages, rising land values, new building regulations and now interest rates all contributing to the housing shortage.

Not only is there little evidence that further provincial action will alleviate the affordability crisis this decade, but it comes at the risk of the environment, regional food security, and vital revenues of our municipalities at short of money. These communities depend on development revenue to provide essential services, infrastructure and a state of good repair, for needs such as parks, public transport and, ironically, affordable housing.

Karen Chapple is Director of the School of Cities and Professor of Geography and Urban Planning at the University of Toronto. Cherise Burda is Executive Director of City Building at Metropolitan University of Toronto.

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