Ford must back up housing rhetoric with concrete policies
As a new year approaches, the Ford government recently vowed to tackle housing affordability by growing the housing supply and asking the public for input on how to reduce regulatory barriers to homebuilding.
As a starting point, it’s good to see the new government isn’t preoccupied with vain attempts to tamp down housing demand (like in British Columbia) or resurrecting heavily discredited policies such as rent control (like the Wynne government did). Instead, the government seems to recognize the root of the problem—a shortage of homes. This change is good news.
However, there’s a big difference between intentions and outcomes—as is often the case in politics. So far, the Ford government is talking the supply talk, but will it walk the walk? Scrapping rent controls on new units was a good start, since it will make rental housing construction (and maintenance) more attractive. But beyond these incentives, removing regulatory barriers to construction remains key. One place to start is to accelerate building permit approval timelines by improving municipal zoning bylaws.
Research shows that long and uncertain approval timelines are a significant impediment to homebuilding. And in the Greater Golden Horseshoe (Ontario’s largest urban region), timelines average one-and-a-half years from the time builders first approach city hall to the moment they can break ground, with significant variation between individual projects.
Many factors influence timelines, including the number and clarity of steps in a municipality’s approval process and the number of staff available to process applications. Zoning bylaws are also crucial.
According to 2016 research measuring regulatory barriers to homebuilding, rezoning (the need to amend local zoning bylaws to replace, say, a row of bungalows with an apartment building) adds a significant amount of time to the building permit approval process. In Toronto, rezoning adds more than seven months, on average, while in Hamilton it adds almost one year. This has important ramifications for the housing supply, since every additional month of delays or uncertainty erodes the ability of homebuilders to respond to strong demand with new homes.
Although zoning is a municipal function, the provincial government has significant power over municipalities, as evidenced by the recent decision to cut the number of Toronto city councillors in half. The Ford government could, for example, require as a precondition of provincial transit infrastructure funds the “upzoning” of areas around transit stations to create far more housing than currently allowed. This would curb the municipal practice of holding back extra density as a bargaining chip to extract local amenities from builders.
The same applies to provincial grants to municipalities. According to provincial data on local government finances, a significant portion of municipal revenue (almost 18 per cent in the GTA in 2016) comes from provincial and (to a lesser extent) federal transfers, including grants to help with operating spending. Tying such grants to tangible increases in “zoned capacity” (the number of homes allowed by current zoning) would help foster the many more homes needed to increase affordability, while shaving months off the permit application process.
These are but a few tools at Queen’s Park’s disposal. Much more could be said about how to help renters, and novel approaches to funding infrastructure necessary to service a growing housing supply. Most important, however, is for the Ford government in 2019 and beyond to show a genuine interest in solving the housing affordability puzzle—and not just provide lip service.