Walk With Joy
Housing affordability seems to have leap frogged transit, crime, the economy, the environment and even hydro rates as the number one issue of civic conversation. And no longer is it only a concern for the low income – a demographic whose ranks have swollen – it is front of mind for mid to high income citizens (and voters) as well.
Almost an entire generation of professionals earning decent incomes may be denied home ownership, whether they choose the urban core or the suburbs. And renters looking to dodge the real estate market are facing the brutal supply and demand squeeze of near all-time low vacancy rates in an increasingly unregulated market. Surprisingly, the issue of housing affordability is attracting little serious attention at Queen’s Park. It did not get the slightest mention in this fall’s throne speech. And in the weeks following the speech not a single question was raised on the issue by either opposition party.
Two policy ideas are surfacing that could prove distracting to the cause of affordability and delay the adoption of more serious prescriptions. The first is the advancement of a largely housekeeping piece of legislation that has as its centrepiece a widely adopted U.S. policy tool called Inclusionary Zoning – a requirement of a minimum percentage of affordable units to be created in future residential developments. The second, driven by some in the housing development industry and some academics and economists, is to open up more serviced greenfield lands in the suburbs to increase the supply of ground related homes, and in theory lower the cost of these homes as a simple equation of supply and demand economics.
ULI Toronto put focus on both of these ideas this past summer. Building on a recent Urban Land Institute study, The Economics of Inclusionary Zoning, we hosted a roundtable of municipal, provincial and industry housing leaders, and while we learned that inclusionary zoning can be an effective tool to create affordable units (and its use is being expanded in cities like New York), it has never really been applied to the condominium market. It has almost entirely been used in purpose-built rental development — a typography we have seen very little of in Ontario since the 1970s (though this may be changing) — and its success has also almost always been tied to the ability to do density bonusing, usually in combination with government subsidy grants, neither of which are likely on offer in Ontario.
On the greenfield supply front, we hosted a widely attended public debate featuring academics and policy consultants on both sides of this argument, and while there could be no consensus on this divide, it was broadly agreed that the issue of housing market affordability was complex. A strong economy, high wages, low interest rates, poor transit and other factors have also conspired to drive up housing prices. The degree to which publicly subsidized sprawl can seriously counter
these other market forces should be weighed very carefully, but the temptation to see this as a magic bullet solution is something that some leaders at Queen’s Park are beginning to adopt.
There are of course no simple solutions, and really no economically vibrant city region stands out as a great example, but without a doubt there are a range of options that can be explored. One would be uploading affordable housing back to the province. 20 years’ after the Province downloaded 100 per cent of social housing delivery to municipalities, there are fewer units available today due lack of maintenance, even though demand for these units has significantly increased. Municipalities cannot afford to be housing service providers. Another example would be to merge Inclusionary Zoning with provincially rezoned density increases along all major transit corridors and develop a housing grant program to accompany this policy – ensure that the cost of adding affordable units is offset by public policy (zoning) or dollars – not shifted onto the real estate market. A third option is expand opportunities for unsubsidized second mortgage models such as Options for Homes and Trillium Housing to lower the threshold for buyers to get into the real estate market. And finally, fully leverage public lands to significantly expand below market housing opportunities across the region.