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After all this, are we delivering housing faster?

In the second installment of Urban Strategies’ Morning Buzz series, we probed the question:

Are Ontario’s recent planning policy reforms actually delivering on their stated objective of delivering housing faster?

The Bills are piling up—but is housing supply being accelerated?

Under Premier Doug Ford, Ontario’s Progressive Conservative government has passed a suite of legislation aimed at simulating increased housing supply, including Bill 197, Bill 137, Bill 109, Bill 23, and Bill 97.

The general consensus on our leading question from the panelists was that these legislative reforms have had a limited positive effect on housing supply. In a sense, what they have accomplished is perhaps more symbolic, than tangible. The public discourse around the need for more housing has socialized the general population to ideas that may have once been considered radical—such as the Province’s mandating as-of-right permissions for three-dwelling units on a single lot. In other respects, such as by introducing relief on development charges for affordable and attainable housing, the Province’s planning reforms have enabled urgently-needed forms of developments to continue to be viable where they might otherwise not be. However, our panelists shared that they have not witnessed any dramatic shift in the ability for projects to move forward any faster. 

Planning policy not the primary bottleneck to increased supply

Despite the fanfare that has accompanied the Province’s planning reforms, our panelists opined that these changes are having a very limited impact on increasing housing supply when compared with other much more significant obstacles including interest rates, labour and supply chain shortages. One compelling example shared is that Ontario’s housing sector has historically only been able to deliver between 60,000 to 80,000 new housing starts each year, a capacity that is related more to supply chain constraints (i.e. aggregate extraction, drywall), labour (i.e. availability of trades) and more recently, an environment of increased interest rates, than to enabling policy.  Until these broader constraints are addressed, we heard that policy reform will play a highly limited role in facilitating increased supply.

The shortage of skilled trades and the need to cultivate a new generation of tradespeople was highlighted as an urgent priority. One suggestion offered was for the government to make training and education to enter the trades free, and to promote careers in trades to high school students. The panel also discussed the need to remove barriers for newcomers to enter the trades. The need for trades skilled in sustainable construction and building operations aligns with the increasing urgency of reducing greenhouse gas emissions associated with construction and the built environment. In the area of affordable housing development, the panel identified the need for project financing options that are not contingent on market borrowing rates, but can tap into government borrowing rates, which would unleash a swell of sub-market housing development. Such a shift would be consistent with the idea of treating affordable housing construction as an infrastructure investment, not something that will (or will not) generate a positive financial return.

Imbalance between housing being built, and housing people want/need

Another dimension to the housing supply conundrum is that the housing being delivered by the market is not necessarily aligned with the types of housing that people want and need. An example given by the panel is in Toronto, where high-rise construction remains strong, but not enough ground related housing is being built.

To counter this imbalance, the City has begun to look at ways to open up so-called stable, low-rise Neighbourhoods to gentle density through its Expanding Housing Options in Neighbourhoods reforms. By reducing policy and zoning barriers to low-impact forms of residential intensification, Toronto has created the potential for up to 45,000 new units of ground-oriented housing.

Similarly, in the City of Hamilton, there are 100 linear kilometers of existing municipal laneways where infill residential development would have no material impact on existing streetscapes, and where servicing is already in place.

These types of planning reforms, while modest in the full context of the housing supply crisis, were praised by the panel as a way to democratize and make development opportunities available to individual property owners, while unlocking new ground-oriented housing not being delivered in sufficient supply by the market. This scale of development would also not compete with the labour and supply pools of larger-scale developments.  

Should certain types of development be prioritized?

A housing unit approved is not always a housing unit built. The City of Toronto’s development pipeline, for example, contains 475,000 dwelling units. While this represents a huge opportunity to meaningfully address the city’s housing deficit, landowners often sit on their approvals indefinitely, for a variety of reasons.

Recognizing the need for bold solutions to unlock supply, our panel considered the possibility of creating ways to prioritize projects that are shovel and permit-ready with a motivated proponent, compared to, for example, development approvals that are obtained as part of an asset management strategy but will not necessarily lead to increased supply in the short term.

Similarly, our panel considered whether a form of preferential treatment or “fast-lane” could be used to expedite affordable housing development, or projects planned to achieve passive house standards (especially urgent in light of the projection that Canada is set to miss its 2030 emissions reduction target).

Are there other more easily-implementable ways to incentivize the right kinds of applications and proposals? The panel raised the possibility of having a streamlined set of prescribed application materials for certain types of development applications that align with public policy objectives. What was clear after our second Morning Buzz session is that to

reduce Ontario’s housing supply bottleneck to a planning issue alone is to dramatically oversimply a wicked policy problem

that will require the full might of government, economy and civil society to overcome.

Check out our other Morning Buzz Sessions:

Responding to Bill 109

Reassessing Delivery of Community Benefits