Fresh Housing Policies for the Greater Golden Horseshoe

September 25, 2017

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By Leigh McGrath and Andrea Friedman

In recent years, housing affordability has become an important and hotly debated issue within the GGH, with the escalation of housing prices and the continued shortage of affordable housing. The Province has taken new steps to address housing affordability with the release of Ontario’s Long-term Affordable Housing Strategy in March 2016, the introduction of the Promoting Affordable Housing Act in May 2016, and the release of the Fair Housing Plan in April 2017.  As part of the changes to the provincial land use framework, the Province has also included new housing policies within the new Growth Plan for the Greater Golden Horseshoe, which came into effect on July 1, 2017.

At the federal level, the 2017 federal budget committed $11.2 billion over the coming decade for initiatives to build, renew and repair Canada’s stock of affordable housing, and the long-awaited National Housing Strategy will be released this fall. This strategy, together with dedicated long-term funding, has the potential to align the priorities of federal, provincial and municipal governments and re-establish a commitment to affordable housing.

 

What’s changed in the Growth Plan?

The 2006 Growth Plan did not include specific direction on housing, instead referencing the relevant section of the Provincial Policy Statement. The new Growth Plan adds a specific section on housing (2.2.6). It directs upper- and single-tier municipalities to develop a housing strategy that supports the achievement of the Growth Plan’s minimum intensification and density targets. Housing strategies will identify a diverse range and mix of housing options and densities, including second units and affordable housing, and establish targets for affordable ownership housing and rental housing. As part of the Growth Plan’s renewed emphasis on complete communities, the Plan directs municipalities to consider the range and mix of existing housing options and densities and plan to diversify the overall housing stock across the municipality. The Growth Plan also directs municipalities to consider the use of “available tools” to require that multi-unit residential development incorporate a mix of unit sizes to accommodate a diverse range of households and incomes.

 

What tools are available to municipalities to promote diverse and affordable housing?

Although the Growth Plan does not make specific reference to inclusionary zoning measures, there is an implicit connection between its new housing policies and other provincial legislative and policy measures to stimulate affordable housing development. The Promoting Affordable Housing Act was given Royal Assent on December 8, 2016, and when proclaimed will amend the Planning Act to give municipalities the option of adopting inclusionary zoning, i.e., requiring affordable housing units as part of residential developments that meet a set size threshold. Inclusionary zoning, explored in detail in a previous post, offers the potential to create a permanent stock of affordable housing in every major new housing development. However, inclusionary zoning has faced much criticism for placing a shared social responsibility on one market sector (real estate and development).

 

What do the new Growth Plan policies mean?

In the new Growth Plan, the goal of complete, transit-oriented communities, supported by transit infrastructure and public service facilities, is tied directly to greater social equity. The addition of housing policies takes the Plan further, signaling the critical role municipalities must play in addressing housing issues, first and foremost by ensuring they are accommodating a range of housing types suitable for households at various income levels as they grow. The new policies appear to be a direct response to the GGH-wide issue of housing affordability, but one can also infer from the Plan as a whole that the Province feels its growth policies have had little or no effect on housing affordability.

In preparing housing strategies, regional and municipal planners and their consultants will need to respond to the particular conditions and challenges in each community while supporting the Growth Plan’s intensification and density targets. The opportunity is to develop locally informed and tailor-made policies, mechanisms and affordable housing targets, rather than taking a generic approach based on a provincial mandate. This process will require research into local market conditions and socio-economic projections as well as an understanding of how to seamlessly accommodate a mix of housing types for a range of income levels within established and new communities. Upper- and single-tier municipalities with existing housing strategies can build upon previous work, adding details and fine-tuning to better align with the Growth Plan.  Key questions to consider include:

  • What methodology should be used to define the appropriate range and mix of housing options and densities for a given municipality?
  • What are the innovative ways of achieving true mixed-income developments that include a significant component of affordable housing?
  • What funding is available to support innovative approaches to meeting affordable housing targets and the general implementation of housing plans?
  • What are the risks of requiring a significant percentage of affordable housing in residential developments through Official Plan policies and/or inclusionary zoning?

 

For developers, the potential impact of the Province’s latest actions on the real estate market are hard to gauge at the moment but will be something to watch as housing strategies take shape. The new policies should prompt developers to be more cognizant of increasing unit mix and affordability in their projects, if only to speed up the approvals process, but hopefully to also attract a broader cross-section of housing buyers. It is in the interest of the development industry to actively explore innovative ways to deliver affordable housing and take this an opportunity to be a leader in the conversation about how to best achieve strategies like inclusionary zoning in ways that work for both public and private sectors. Developers should also be working with municipalities to ensure the expected federal funds for housing are steered to projects that will most effectively implement housing strategies.

While the new policy section on housing in the Growth Plan is brief and not overly prescriptive, it is meaningful in that it forces municipalities to take an in-depth look into housing at regional and local levels and devise a strategy that addresses local issues and opportunities. Together with a National Housing Strategy, federal funding commitments and new planning tools, municipal housing strategies have the potential to significantly influence the mix of housing across GGH communities and how affordable housing is delivered.


There is no doubt this is a complex and complicated suite of policies and legislation.  At Urban Strategies, we are here to help you.  If you need to know more about these Plans and what they mean for you, your land, or community, please contact us:

Melanie Hare, Partner, mhare@urbanstrategies.com, 416-340-9004 x 215

Pino Di Mascio, Partner, pdimascio@urbanstrategies.com, 416-340-9004 x 210