Ontario’s ‘affordable housing’ task force report does not address the real problems
TheConversation.com
February 10, 2022
The growth of Ontario’s house market has pushed housing prices out of the reaches of many.
The province of Ontario’s task force has released 55 recommendations to address the growing housing crisis. But if an affordable housing report explicitly states that building affordable housing is outside its mandate and never once mentions the term “rent control,” is it really an affordable housing report?
While there are some important ideas within this report, particularly to aid middle-class households that have recently become victims of a housing crisis, it is unlikely to make housing more affordable for those on low and moderate incomes who have struggled to find adequate shelter for decades.
The report is what you would expect if you brought together a group of bankers, developers and home builders and asked them to solve the housing crisis. The emphasis is on how to increase the supply of market-rate housing, while largely ignoring other issues central to making housing more affordable.
Housing needs
The report outlines that 1.5 million new homes are needed over the coming decade. There are two issues with this. The first is whether all these homes are actually necessary to keep pace with growth. The report claims that Ontario is 1.2 million houses short of the G7 average. This is based on data showing that Canada has the lowest number of houses per 1,000 people of any G7 nation.
But the number of dwellings per 1,000 people is not a very useful metric, particularly for comparisons between places, because people reside in households. If all 1,000 people live alone, then 1,000 dwellings are required. But if they all reside in households of five, then only 200 dwellings are required.
Dividing those 1,000 people by the average household size of the jurisdiction where they live paints a very different picture about housing needs and can help to interpret differences in rates of housing supply between cities, provinces and countries. These differences in average household size mean those same 1,000 people require an average of 507 dwellings in Germany and 441 in Japan. In Canada, because of our larger average household size of 2.47 people, this figure is only 405.
It should also be noted that Ontario’s average household size is significantly larger than the Canadian average — at 2.58 people per household, it is the second-highest in the country after Alberta.
Between 2006 and 2016, the number of households in Ontario rose by 614,415. During that same 10-year span, there were 689,625 new occupied dwellings. Some of these replaced existing homes, but most condos, apartments and new developments constituted significant net gains.
While we will need to wait for further data from Statistics Canada on the actual number of households in 2021, Ontario’s population grew by an average of 155,090 per year between 2016 and 2021.
If the average household size remains similar, this is roughly 60,000 new households per year, well short of the 150,000 annual new dwellings the report calls for. It is also lower than the average of 79,085 housing starts per year between 2016 and 2021.
But an “average” household doesn’t actually exist. Within these averages, there are a growing number of one-person households, as well as many families who have to move far away from jobs to find appropriate and affordable housing. All this relates to the second issue: the report gives no guidance as to what kind of housing this should be. How many one- or three-bedroom units are required? How many rentals are needed, and where?
The implicit message is that the market knows best. The reality is that, in urban areas, the market produces a lot of small units popular with investors, and suitable for one- and two-person households, but very few dwellings large enough for families.
Changing zoning rules
Within this report, there are some important and long overdue recommendations. The task force suggests eliminating single-family zoning. As I and others have previously articulated, there are many good reasons to do this.
In around 70 per cent of Toronto, it is impossible to construct town homes, duplexes or triplexes (as is common in Montréal), small apartments or anything else that can increase the number of people living in these areas. This is partly why many neighbourhoods are losing population.
The report recommends permitting four units (and up to four storeys) on any residential parcel in the province. Ontario would be joining places like Minneapolis, California and New Zealand in doing away with this restrictive land-use zoning. Within Ontario, Kitchener has been allowing up to three units on most properties since 2020.
Other positive recommendations include permitting the conversion of underused or vacant commercial properties into residential ones, and allowing secondary suites and multi-tenant housing. Eliminating minimum parking requirements near transit and reducing taxes on purpose-built rental properties are also good ideas.
Importantly, the report stresses intensification within existing built-up areas as the priority, rather than developing new housing on greenfield lands. This is a big step towards curbing automobile-dependent sprawl and is in line with the recent decision in Hamilton to stop its urban boundary expansion.
What’s missing
Equally important is what’s not in the report. There were no housing advocates, people with lived experiences of poverty or non-profits working with those struggling with eviction, foreclosure or homelessness on the task force. Incorporating their knowledge is important — for example, intensification can lead to an erosion of housing options for those on low incomes.
It is troubling that this report explicitly states that building new affordable housing was not part of its mandate.
Also absent from this report is any mention of rent control. In Ontario, sitting tenants enjoy some degree of rent control, but when a new unit is built or an existing one becomes vacant, landlords can charge whatever they like. This creates huge incentives to evict sitting tenants via “renoviction.”
It is also worrying that there is no discussion of the role that investors play in fuelling the housing crisis. The report simply dismisses any attempts to cool the market by reducing demand from speculators. In Ontario, a quarter of all home buyers are investors, up from 16 per cent a decade ago.
Instead of incorporating a range of ideas and approaches, the report reads like a blueprint for how to build more market-rate housing. Unfortunately, there is little empirical evidence to indicate that on its own, market-driven upzoning, laneway housing or mixed-use zoning produces the kind of housing that is accessible to households on low and moderate incomes.
Middle-class solutions
We talk a lot about housing today not because of some newfound concern for the poor, who have been suffering through a crisis for generations, but because it has now become a middle-class problem.
The tasks force’s recommendations are squarely aimed at this middle-class interpretation of the housing crisis. Policies to encourage the construction of $1 million townhomes to help those priced out of $1.5 million semis will assist some people to find a home. But these measures will do very little for those on low and moderate incomes.
Instead, a range of policies are needed to curb speculation, increase the supply of non-market, genuinely affordable housing and ensure tenants have adequate protections through strong rent-control policies.
Market-rate housing that meets residential demand and keeps up with growth is important, but this supply is no panacea. An affordable housing strategy focused primarily on adding more of this housing without critically asking who it’s for and implementing policies to match housing supply with housing need is unlikely to resolve the housing problem any time soon.
Brian Doucet, Canada Research Chair in Urban Change and Social Inclusion, University of Waterloo
https://theconversation.com/ontarios-affordable-housing-task-force-report-does-not-address-the-real-problems-176869
Tags: economy, featured, homelessness, housing, ideology, participation, poverty, standard of living
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We have a 2nd home after the passing of my mother. Rather than selling it we offered to hold on to it for our children so they could get in the housing market. Our daughter is renting it now, which covers all costs, however there is no excess money to save for a down payment. We would like to sell it to her at a price that would equal the costs she can afford and is currently covering. SHE COULD NOT AFFORD MARKET VALUE, but she can afford to cover the costs associated with what we paid for the house several years ago.
We are NOT speculators or house flippers (this is a home in our family 16 years) – we only want to help our children obtain the opportunity so they can own a home that is otherwise not available to them without considerable help. WE WANT TO SELL UNDER MARKET VALUE and willing to forfeit any gains we could realize if we listed it for sale on the market now. CAPITAL GAINS should be exempted in these instances in the interest of contributing to making houses affordable to first time buyers and family members.