This article initially appeared in the National Post.
By Aaron Wudrick, October 20, 2022
It’s no secret that housing is the political issue du jour in Canada. Politicians at all levels are increasingly talking about it, and for good reason: with average house prices in Toronto and Vancouver crossing the $1-million mark, younger Canadians are increasingly losing hope that they will ever be able to buy a home. Coupled with the rising cost of living and a rapidly aging population, it adds up to a troubling trend that could greatly diminish Canada’s long-term prosperity.
Last month, Pierre Poilievre won a landslide victory in the federal Conservative party leadership race with a heavy focus on housing. He has proposed a significant stick to try and boost supply: holding back federal infrastructure funds from big cities that fail to increase new builds by at least 15 per cent.
The Trudeau government, in contrast, has opted for a carrot, in the form of a new Housing Accelerator Fund, which the federal budget committed $4 billion to over five years, to provide extra money for municipalities that build more homes.
But the reality is that regardless of what levers the federal government can (and should) pull to help boost the housing supply, the biggest obstacles — and therefore the biggest opportunities — remain with the provinces and municipalities.
They should make haste. For example, in February, Ontario’s Housing Affordability Task Force released 55 recommendations for the province to implement that would help improve housing affordability. In response, the Ford government introduced Bill 109, which only incorporated a handful of the recommendations. Observers argued, and the government itself conceded, that the legislation didn’t nearly go far enough.
But armed with a fresh mandate from the June election, the Ford government should take the opportunity to revisit its own report — and this time go much further.
It should start with development charges, which in Toronto add anywhere from $25,000 (for a bachelor apartment) to $93,000 (for a single family home) to the cost of a new home. These charges represent a major revenue stream for municipalities, which would make scrapping them difficult. But if the province can at least cap them and offer either compensation or an alternative mechanism for cities to raise funds, it could be a viable reform.
Exclusionary zoning, which sees large swathes of major cities reserved exclusively for single-family homes, prevents densification and ensures that “not in my backyard” (NIMBY) activism can easily block proposed redevelopments. On this front, the province should flip the script and weaken the veto power of the NIMBY crowd by passing legislation limiting exclusionary zoning, and mandating “densification by default,” except in extenuating circumstances.
Delays in site and permit approvals also add enormous costs to housing. One study found that a two-year delay, which is not atypical, adds over $70,000 to the cost of a new home in Toronto. While the province already has prescribed timelines for bylaw amendments and site plan approvals, these deadlines are regularly missed with no consequences. Imposing “approved by default” rules that result in automatic approvals would prevent bureaucratic inertia from frustrating badly needed developments.
NIMBY activists — and the municipal politicians they have captured — also use restrictions such as heritage designations to freeze out new supply. The provincial government should put limits on consultations and the abuse of these tools.Thankfully, the Ford government has already shown it is willing to flex its muscles with municipalities, cutting the size of Toronto city council in half as one of its first moves after coming to office in 2018 and, more recently, granting new “strong mayor” powers to Toronto and Ottawa, which will eventually allow mayors to veto bylaws that obstruct the housing supply.
In the end, there is only so much that federal and provincial governments can do to set the table for municipalities to do what is necessary. Forward-thinking municipal politicians have an opportunity to get more housing built and help their communities grow and prosper.
They might even help set off a cycle of healthy competition, encouraging other municipalities to get their acts together or miss out on attracting Canadians looking for a place to build a future for themselves and their families.
Aaron Wudrick is the director of the Macdonald-Laurier Institute’s domestic policy program.