PROVINCES ARE STRIPPING CITIES OF THEIR HOUSING POWERS – AND THAT’S AWESOME
Canada’s municipalities are doing almost nothing to alleviate the nation’s crippling housing shortage and, in many instances, are actively making the crisis worse. It’s time for provincial governments to step in and override uncooperative municipal governments that refuse to build more housing.
Ontario has already begun this process through legislation that was announced last month. British Columbia may soon follow suit.
Some critics have argued that this tramples local democracy and will only benefit developers – but they are wrong.
It’s hard to understate how crippling Canada’s housing shortage is. An infamous 2021 Scotiabank report showed that Canada has the lowest per-capita housing out of any G7 nation. At least 1.8 million new homes would have to be built just to catch up to the G7 average — and that’s before accounting for future population growth. When too many people bid on too few homes, prices go up. Hence the crippling affordability crisis that has fuelled catastrophic homelessness, while locking younger Canadians and new immigrants out of homeownership.
For homes to become affordable again, Canada needs to turbocharge supply of both market rate and subsidized housing. The only alternative option is to reduce housing demand, which would ultimately mean cutting down on immigration — but we shouldn’t forgo growth (and deny countless immigrants a chance at the Canadian dream) just because we refuse to build more homes.
Municipal governments are primarily responsible for housing, but they’ve egregiously misused that authority.
New housing has been anemic because of onerous municipal bureaucracy and zoning laws that, for decades, have made it illegal to build more homes in most neighbourhoods. Municipal governments fetishize neighbourhoods composed of single-family homes, which cover the majority of Canada’s cities. Adding any density to these neighbourhoods, even townhouses and small apartment buildings are considered an assault on neighbourhood “character.”
But these appeals to neighbourhood “character” are hollow — old homes are routinely torn down for malapropos McMansions without anyone batting an eye.
In reality, municipalities are merely coddling homeowners in low-density neighbourhoods who believe that having more neighbours is intolerable. These homeowners treat their neighbourhoods like fossils that only they should enjoy. They want the joys of living in a city without the inconvenience of being around people. Because of them, large swathes of Canadian cities have actually been depopulating. Meanwhile, new homebuyers, faced with scarce housing options, are forced to pay exorbitant prices for the privilege of being crammed into condos on the small parcels of land where densification is legal.
For the sake of “local democracy,” municipalities require several rounds of community consultation for new housing developments — but the process often devolves into a farce.
From the outset, it’s troubling that the views of existing residents are considered while those of potential future residents are not. Imagine a guarded subway car where all of the seating is taken, but there’s ample standing room. The subway stops at a station crammed with commuters. The guard asks the existing passengers whether there’s space for more people. They want as much space as possible, so they tell him no — and so he refuses to allow more people on. The commuters waiting at the station groan, because this happens with every passing subway car. That’s what community consultations are.
Those who show up to consultations also don’t accurately represent the entire community’s views.
Residents who don’t mind new neighbours don’t have strong incentives to attend public consultations — new housing benefits strangers, not them. In contrast, NIMBY (“not in my backyard”) activists are highly motivated to cause a ruckus because they melodramatically believe that new housing will tear their lives apart. Thus a small, unhinged minority monopolizes the conversation, crushing new housing under the guise of “local democracy.”
This dysfunctional system is allowed to exist partially because NIMBY activists terrify city councillors. Municipal elections have less engagement and funding relative to elections held for higher orders of government, which allows special interest groups, such as NIMBYs, to have outsized influence. As an example, in Toronto in the early 2000s, then-city councillor Anne Johnston supported the development of two unprecedentedly tall condo buildings in the Yonge and Eglinton neighbourhood. She predicted that this would be “political suicide” and, unfortunately, was proven right. Infuriated NIMBYs ensured that she lost her next election and, since then, the area’s councillors have been extremely anti-development. Not much has changed since then — late last year, a Toronto city councillor privately shared concerns with me about whether NIMBY anger at their pro-housing politics would cost them their seat.
The views of these councillors trickle down to City planning staff, who are only nominally independent. Yet even if councillors were not against development, other barriers obstruct the robust reforms needed to unlock new housing supply. Multiple sources familiar with Toronto City Planning’s internal dynamics spoke of a generational divide — allegedly, while younger City planners are deeply concerned about creating more housing supply, older City planners, who tend to be homeowners, are complacent. These contacts claimed that, in a system befuddled by inertia and councillor meddling, talented young planners tend to burn out relatively quickly, leaving for the private sector, while those who stay avoid rocking the boat to succeed.
This contributes to a sclerotic planning system that lacks the talent or will to fix Canada’s housing shortage.
Rather than fight for new homes, City planners seem more interested in changing as little as possible and undermining pro-housing provincial reforms. As I reported in the National Post last year, when Ontario tried to mandate higher density around public transit stations, Toronto’s City planners used underhanded tricks to undermine provincial density targets. Among other things, they published a report filled with satellite images of low-density neighbourhoods filled with single-family detached houses and argued that their “built form” made it impossible to densify these neighbourhoods — even though these are exactly the kind of neighbourhoods that everyone else insists need more density. When I pressed City planners about the nonsensical arguments in their report, they provided non-answers that seemed deliberately obtuse.
I follow development proposals with a nerdy obsessiveness and have been aghast at how often Toronto’s City staff (and councillors) inexplicably say that developments are “too dense” despite being surrounded by buildings of similar scale. So often, these decisions seem either arbitrary or in bad faith. Last year I met with HousingNowTO, a group of civic-tech volunteers who put together technical assessments showing Toronto’s City planners were under-sizing the development of affordable housing on City-owned land by an average of 30%. Huge lots of land which ought to have housed vulnerable renters were being underutilized. It was bewildering that volunteers had to donate specialized labour to direct City planners to do their jobs correctly.
Ontario’s increasingly antagonistic relationship with municipal governments on housing is unsurprising. Last year, the Ford government convened a new Housing Affordability Task Force, which released a report in February that recommended upzoning low-density neighbourhoods for more “missing middle” housing (i.e. duplexes, triplexes, townhouses, small apartments).
The report was well-received by housing policy experts — but Ontario’s municipal leaders were angered because it would infringe on their powers. The Association of Municipalities of Ontario launched a campaign to crush potential reforms and was supported by prominent mayors such as Mississauga’s Bonnie Crombie. Toronto’s John Tory was the only major mayor not to oppose the reforms.
Faced with strident opposition in the run-up to a provincial election, Ontario Premier Doug Ford backed down and diluted his promises. However, having been reelected with a majority government last summer, he seems emboldened now — hence the announcement of the “More Homes, Built Faster” Act last week. The bill will allow up to three units to be built on any residential lot — regardless of what municipalities say. Now anyone can turn their basement into an apartment, or build a secondary “garden suite” in the backyard, or turn their home into a duplex or triplex (so long as the home’s footprint remains unchanged).
The legislation has its flaws. For example, it could have gone further and forced municipalities to allow townhouses and small apartments.
Ontario is also considering removing the requirement that developers replace any rental units they demolish for new units — which is bad. Yet these reasonable criticisms have been somewhat drowned out by unreasonable critics.
The Toronto Star published an op-ed authored by two leading housing academics, Karen Chapple and Cherise Burda, who criticized Ford’s reforms. The crux of their argument was that Canada doesn’t actually have to build that much housing, maybe only 40% of what Ford says should be built, because more Canadians are living together in larger households. Let’s say you need to house 1,000 people — if the average household size is one person, you need to build 1,000 houses. But if the average household size is two people, you need to build only 500 houses. With Canada’s growing household sizes, we allegedly don’t need to build as many houses as we think.
In response, Mike Moffatt from the Smart Prosperity Institute wrote an article pointing out what should be painfully obvious to anyone who is under 35 and not a highly-paid professor: Canadian household sizes are growing because people can’t afford to live on their own.
The number of adult children living with their parents has dramatically increased in Ontario, particularly for those between the ages of 30 and 35. Academic planners assume that adult children are increasingly living at home because they freely choose to, when, in truth, they are doing so because a housing shortage makes it too expensive to move out.
Additionally, while the Toronto Star article argued that building lots of new market-rate housing doesn’t have significant “trickle-down” effects on affordable housing, it was quickly pointed out that the studies the authors cited appeared to make the opposite argument: that building more market-rate housing had major impacts on the supply of affordable housing.
Insofar as urban policy goes, Toronto is my specialty so I can’t speak too confidently about the situation in other Canadian provinces – but British Columbia seems to be facing challenges similar to Ontario’s. Premier-designate David Eby has promised to reduce municipalities’ powers over housing planning and permitting.
Eby’s proposed policies include legalizing secondary suites (i.e. basement apartments) across the province and allowing any single-family home to be replaced with up to three units on the same footprint. These reforms are sorely needed.
Densification in Vancouver has become so onerous that bold action has had to come from Indigenous communities which exist beyond normal rules.
The Squamish First Nation is using the special legal status of one of its reserves, which is located near downtown Vancouver and exempt from local zoning and bylaws, to create Senakw — an ultra-dense community for 10,000 people.
Infuriated NIMBYs are now trying to quash Senakw in court, a move which Eby has criticized as “nonsense that I just don’t have a lot of time for because we’re in the middle of a housing crisis.”
This alliance between Indigenous communities and British Columbia’s NDP, in addition to getting people housed, has the side benefit of demonstrating that pro-growth housing politics are not just for conservatives (i.e. the Ford government).
Meanwhile, Nova Scotia also stripped municipalities of some powers this year after concluding that local governments were unacceptably blocking new housing.
Nova Scotia’s provincial government is now imposing “special planning areas” across Halifax that supersede local councils, ramming through housing projects unpopular with NIMBYs. Through this system, the province is on track to approve far more housing over the next two years than communities province-wide have approved in the preceding five.
Canadian municipalities’ widespread obstruction of new housing is actually unsurprising given global trends.
In California, which is also facing a crippling housing shortage, the state government introduced sweeping reforms this year, that sideline uncooperative cities. For example, cities that fail to plan for growth will now lose their power to block new housing. Santa Monica, for instance, briefly had its powers stripped away for non-compliance. During that window, developers rammed through proposals for 4,562 new homes, equalling the total number of homes built there over the past two decades.
Just as in Ontario, Californian cities have played dirty to resist mandated density — for example, one city declared that all of its land was a habitat for endangered mountain lions. However, overall the scheme has been so successful that housing researchers are arguing that it should be replicated in the housing-starved United Kingdom.
If Canada’s provinces are taking the lead, what support are they getting from the federal government? Very little.
The federal government has done almost nothing to boost housing supply and seems more interested in subsidizing demand by providing tax credits and other homebuyer incentives.
When you subsidize (and therefore increase) housing demand without also increasing supply, that causes prices to grow faster — meaning that government subsidies are eaten up by price increases and don’t actually make housing more affordable.
Beyond that, the federal government has paraded around its commitment to create 17,000 new homes — but, as that constitutes about 1% of Canada’s supply shortfall, it’s hard to take that initiative seriously. Homeopathic solutions won’t make homeownership affordable again, even if they generate catchy headlines.
Some argue that the federal government has little authority over municipalities in this area – and they’re right. Constitutionally speaking, housing is a provincial, not federal, responsibility. But these boundaries can be blurred, as they already have been in other policy areas, such as healthcare.
While the federal government has no direct authority on housing, it can coerce municipalities into reform by strategically withholding transit and infrastructure investments.
In the last federal election, the Conservatives pledged to make public transit funding contingent on municipalities densifying neighbourhoods around public transit stations. That was a good idea – the Liberals should adopt it, and yet they don’t. I can’t help but suspect that the federal government is happy to let the provinces be the bad cop here. Why take on the political risks of housing reform when you can offload them to another order of government?
Municipalities are mad about losing their housing authority – won’t someone think about the poor City planners? Quite frankly, I hear the world’s tiniest violin playing.
If they wanted to keep their powers, they should’ve done their jobs better. But they didn’t. They prioritized the interests of well-off homeowners and locked an entire generation of Canadians out of homeownership.
The provinces are now belatedly stepping in, and, even if they’re doing so imperfectly, it’s still a start.
Who knows, maybe one day you won’t need to win the lottery to afford a home in Canada’s largest cities.
Story by: Daily Hive