Fraser Forum

White House urges deregulation to boost housing supply—Canadian policymakers should take note

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Housing availability and affordability isn’t just an issue in Canada. It’s also a concern in the United States, where the White House recently released a so-called Housing Development Toolkit aimed at informing municipalities on how to increase housing affordability.

Remarkably, five of the 10 recommendations are deregulatory in nature, and are aimed at boosting the housing supply rather than curtailing demand. Canadian policymakers could learn from this hands-off approach to encouraging a healthy housing supply.

The White House Toolkit calls for several measures including: establishing “by-right” development, which allows for speedier building approvals if building plans conform with current zoning; streamlining or shortening permitting processes and timelines for housing construction; eliminating off-street parking requirements; allowing accessory dwelling units (secondary suites); and enacting high-density and multifamily zoning. Each of these may seem trivial in isolation, but together would help to reduce the cost of housing, the Toolkit claims.

Establishing by-right (or as-of-right) development typically means that new building that complies with zoning regulations does not require the involvement of city council. Rather, it allows city staff to issue permits for all development in line with city policy. For example, if a corridor along an important arterial road has been zoned for more density, there’s no need for council to deliberate on each building’s approval, so long as the builds comply with local zoning regulations. This removes an important step that can slow projects by making the development process more expensive and less timely.

Moreover, streamlining or shortening permitting processes and timelines would also expedite the provision of new housing units. Indeed, a recent Fraser Institute study found that many municipalities such as Vancouver and Toronto, with longer and less certain approval timelines, tended to see less growth in housing stock than could have otherwise been expected.

Not surprisingly, the Toolkit’s recommendation to eliminate off-street parking requirements is controversial. However, mandating a minimum number of parking spaces makes it more difficult to build low-cost housing because new surface parking spaces can cost thousands of dollars to build (growing to tens of thousands for underground spaces). Adding such costs to each unit can make otherwise affordable homes unaffordable to many prospective residents. While some worry that eliminating parking requirements might lead to parking chaos, letting the market set parking prices remains a better option.

Secondary suites such as laneway and basement units have been met with resistance in some Canadian cities, most notably Calgary, but have found more success in others, such as Vancouver. Allowing secondary suites is low-hanging fruit when it comes to increasing the housing supply. When done right, these suites can meaningfully grow the housing stock in existing residential neighbourhoods.

But arguably the most important recommendation in the Toolkit is that cities enact more high-density and multifamily zoning. Allowing more dense development is the most obvious way to increase housing supply in highly desirable cities that face geographic constraints. For instance, despite the fact that Downtown Vancouver is very dense, zoning for single-family homes dominates most of the city. Vancouver and its suburbs still have plenty of room to grow upward. Toronto faces its own restrictions to outward growth due to the Greenbelt that surrounds it, so increased density in existing neighbourhoods is needed to grow the housing supply.

The White House deserves credit for providing input on a crucial topic for local governments without encroaching on their jurisdictions. As Canada’s most desirable urban regions grapple with housing affordability issues, reminding municipalities and provinces of their options, without prescribing heavy-handed measures from Ottawa, may lead to meaningful change for Canadians and their families.   


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