Zoning Reform Ideas

[evandyk]

Mike Moffatt has some good info and articles on this on his twitter feed. The biggest groups of people leaving Toronto are kids 0-4 and adults in their early 30s. Basically, a large proportion of people having kids leave the city. That can't be good long term.

 

[calimehtar]

Among other factors the number of homes that are available is either not going up very fast, or else is actually declining, not sure which, because of people (like me) buying houses that used to have apartments and then renovating to use the entire space. What is being built is mostly small condominiums which young families don't want to have to live in, given the choice.

 

[allengeorge]

Mike Moffatt has some good info and articles on this on his twitter feed. The biggest groups of people leaving Toronto are kids 0-4 and adults in their early 30s. Basically, a large proportion of people having kids leave the city. That can't be good long term.

Yeah - this has been the case for a few years, and I don’t understand how Toronto’s Councilors don’t look at this and get increasingly concerned.

 

[calimehtar]

Diversity Aging homeowners our strength

 

[allengeorge]

You and I agree on so much, but you are indeed a glass 1/2 empty soul! LOL

Not that I have limitless faith in government, I know all too well the shortcomings of the institution, as I do the private sector as well.

I admit - I'm not the most optimistic person, and that is a failing of mine.

That said, I'm particularly not optimistic about the current housing crisis, because it's been very visibly building for the last 5+ years (heck - even longer) and no level of government has treated it like the crisis it is. And of course, they're terrified of doing anything because fixing the problem will involve a drop in prices; that'll hit voters hard, and they'll blame whoever's in power. No matter that the steep runup in housing prices is a nationwide systemic crisis: draining productive investment from other areas in society, making it harder for Canadians to start families, cratering the birth rate, and making Canada a less attractive place to live or work or start a business.

That said, I'm not convinced that a lot of the tough calls so to speak won't be made; many already have; on the supply side.

It's not clear to me that tough calls have been made on the supply side. For example, Toronto is still slow-rolling plex housing across the city, we've City Planning basically admitting there'll be no rezoning of SFH-only zones to apartment zones, and even when forced to by the province, City Planning and Councillors are doing absolutely the bare minimum around densifying (I'm thinking of PMTSAs along Danforth). If this is what "action in a crisis" looks like, we deserve the whole show falling apart around us.

And, let's not get started on other municipalities. We're still sprawling out, although at least new developments are more dense.

I'm somewhat more concerned on lack of plans to deal with

A) Demand (population growth/concentration, ownership of multiple properties, commodification of housing etc.

I truly hope that we see some action on multiple-property ownership. One article in the G&M suggested that the government was looking at increasing down payment requirements on additional properties and, crucially, removing the ability to use HELOCs to finance additional purchases.

B) The recognition that there in market mechanism to build housing for people earning $20 per hour, never mind $15, never mind on social assistance; and this requires some mix of boosting said incomes
(higher minimum wage, tightening labour supply, raising social assistance rates, and rent supplements); along with the construction of sub-market priced housing.

Absolutely. I'm primarily a "supply-sider", but I think I'm aware enough to realize that simply building supply isn't enough: we absolutely need to be building and funding deeply affordable housing.

Agree in principle, not sure why we would just wouldn't eliminate capital gains rates entirely. I say that as someone who would be adversely effected by such a change.

But to me, the government should be agnostic about how you (legally) earn your income, and tax equally all types.

We absolutely agree on this. It makes no sense to me to treat capital gains from homes differently from other capital gains.

 

[TRONto]

I admit - I'm not the most optimistic person, and that is a failing of mine.

That said, I'm particularly not optimistic about the current housing crisis, because it's been very visibly building for the last 5+ years (heck - even longer) and no level of government has treated it like the crisis it is. And of course, they're terrified of doing anything because fixing the problem will involve a drop in prices; that'll hit voters hard, and they'll blame whoever's in power. No matter that the steep runup in housing prices is a nationwide systemic crisis: draining productive investment from other areas in society, making it harder for Canadians to start families, cratering the birth rate, and making Canada a less attractive place to live or work or start a business.

It's not clear to me that tough calls have been made on the supply side. For example, Toronto is still slow-rolling plex housing across the city, we've City Planning basically admitting there'll be no rezoning of SFH-only zones to apartment zones, and even when forced to by the province, City Planning and Councillors are doing absolutely the bare minimum around densifying (I'm thinking of PMTSAs along Danforth). If this is what "action in a crisis" looks like, we deserve the whole show falling apart around us.

And, let's not get started on other municipalities. We're still sprawling out, although at least new developments are more dense.

I truly hope that we see some action on multiple-property ownership. One article in the G&M suggested that the government was looking at increasing down payment requirements on additional properties and, crucially, removing the ability to use HELOCs to finance additional purchases.

Absolutely. I'm primarily a "supply-sider", but I think I'm aware enough to realize that simply building supply isn't enough: we absolutely need to be building and funding deeply affordable housing.

We absolutely agree on this. It makes no sense to me to treat capital gains from homes differently from other capital gains.

Ontario has less housing stock for its residents than any other province in Canada

Despite the non-stop construction of generic new condo towers in its biggest city, Ontario has just been found to have the most drastic housing sup...

www.blogto.com

If you look how far behind we are the rest of the country and other G7 nations, we are in a supply pit and that needs to be resolved. We need 650 000 more units today to get to the Canadian average from this article.

 

[Northern Light]

Ontario has less housing stock for its residents than any other province in Canada

Despite the non-stop construction of generic new condo towers in its biggest city, Ontario has just been found to have the most drastic housing sup...

www.blogto.com

If you look how far behind we are the rest of the country and other G7 nations, we are in a supply pit and that needs to be resolved. We need 650 000 more units today to get to the Canadian average from this article.

No question.

But lets talk about how many units are being built in Toronto currently......

It varies year to year, but the numbers of starts tilt between the high teens and about 23,000 starts a year.
So lets take the higher number......that sets a pace of about 230,000 units over the next decade.
Toronto's needs would seem to be a disproportionate share of the 650,000 you note above......... I'm just going to pick an arbitrary number for the moment so I don't go too far down the research hole...
Lets say 450,000

So, if our population remained static; at current build rates, we'd come up ~ 150,000 units short of meeting demand, using those numbers (we could choose others which would be higher)

But Toronto's population is growing at ~100,000 per year or something close.
So about 1,000,000 over the next decade, which divided by 1.7 (average household size) means 589,000 more units of demand.
That puts us on pace to be 740,000 units in the hole, or 90,000 units worse off than today.

*****

Toronto is literally seeing the most housing built in its history, and the most in North America.

Construction crews are already remarkably thin......there are large hirise sites being built with a crew of only a dozen workers most days.
That would never have been the case 20 years ago. It does make it slower going.

Is there any reason to believe that if the City waived a wand and permitted, for argument's sake 100,000 more easy units (no zoning/opa required) tomorrow that those would actually be built on a net-out basis
by developers?

To be clear, I'm not arguing against the proposition for more permissive zoning or greater supply, I'm in favour of both.
Rather, I'm pointing out that for a host of reasons, it will be very difficult to close that gap in the medium term.

*****

Also compare the supply side to the demand side; its much easier to fix the latter; and the latter is exacerbating the current problem in a substantial way.

*****

To sum up, yes we should address supply, of course, absolutely, no disagreement at all. But are the best tools we have, or could have, likely to give us resolution or even a pace to resolution 10 years out w/o addressing the demand side?

I'm inclined to say 'no'.

The alternative is to imagine that Toronto's building industry could increase its output 74,000 units per year for the next 10 years, which would be more than triple its current capacity to build.
I can't fathom the path to get there, however desirable that might be.

So we'd better fix the other bit!

 

[Undead]

We're in a supply pit largely because the feds opened the cheap credit tap in 2009 and never closed it. This stoked excessive speculative demand which will just expand to eat up whatever level of supply is brought to market.

To me, housing is like traffic congestion: you don't widen roads (expand supply) to alleviate it; you toll it (reduce demand).

Yes, multiplex, midrise and high rise upzoning are all needed; yes, development permits and fees should be streamlined.

But I think it's misguided the make the issue solely about supply, as has become common in many places.

 

[Northern Light]

Coming back to the need to address the income side of the equation.

On brand new purpose-built rental housing, rent for a 1bdrm tends to come in ~$2,500 per month.

Edit to Add: upon searching, the lowest new-build rent I could in Toronto was $1,850 per month in the High Park area, for a 542ft2 unit, utilities and parking not included.

Assuming no parking, but sub-metering of water, I'd expect that to add about $300 to monthly bill when averaged over a year. While a smidge below $2,500, its not great, and not a unit size that will serve anyone but a single with modest expectations.

That's about $30,000 after-tax dollars a year. Using the typical guideline that one should spend more more than 30% of their income on housing..........
That means no one making less than $100,000 per year can afford to rent a new apartment in Toronto.
That's not even considering the need for a family-sized unit.

IF one assumed that could relax zoning and through that get another 30,000 purpose-built rental units on the market over the next decade, above and beyond what we're now expecting; I'm not sure that achieves all that much.

I would argue the growing population will force rents higher still even in that scenario.

But even if it did not.............

Where are we housing people who earn even $60,000 per year, let alone minimum wage which is 1/2 that; or Social Assistance which is less than 1/5 of that?

Trimming the rent on new builds through relaxed zoning, is a great idea, but in a utopian world might shave 15% of that rent.

While better than a kick-in-the-head; it won't lower the rent (or purchase price) to a point affordable to virtually anyone below the median income threshold; and arguably not people at said threshold either.

****

Once again, not an argument against much need zoning flexibility, and higher as-of-right densities and heights, particularly along arterial roads......

Just a clear sense, that will be nowhere near enough to tackle the problem.

 

[evandyk]

Coming at the end of the month...

https://twitter.com/x/status/1481751622539788288

 

[TRONto]

We're in a supply pit largely because the feds opened the cheap credit tap in 2009 and never closed it. This stoked excessive speculative demand which will just expand to eat up whatever level of supply is brought to market.

To me, housing is like traffic congestion: you don't widen roads (expand supply) to alleviate it; you toll it (reduce demand).

Yes, multiplex, midrise and high rise upzoning are all needed; yes, development permits and fees should be streamlined.

But I think it's misguided the make the issue solely about supply, as has become common in many places.

I think a couple issues are mixed up here. The statement in the article is that there is more supply needed. From the article POV, it's not who is buying the units, it's that there isn't enough units.
I agree with your core message though. There are excessive investment purchases in the market

 

[Northern Light]

Coming at the end of the month...

https://twitter.com/x/status/1481751622539788288

Got to bring that forward.

Its a pair of Tweets from Prof. Mike Moffat who has spent no small amount of time looking at the housing file.

 

[evandyk]

Scotiabank report: Ontario would need to have 650,000 more housing units just to meet the average number of housing units per capita in the rest of the country.

Which Province Has the Largest Structural Housing Deficit?

www.scotiabank.com

By comparing the number of homes in provinces that lag the national average, we can get a sense of how acute the undersupply might be. Given its size relative to other provinces, Ontario very much stands out in this respect. For Ontario to have the same level of homes per capita as the average in other provinces, over 650,000 additional housing units would be required. For Alberta, the gap is 138,000 units and around 23,000 units would be required in Manitoba. It should be stressed that this isn’t a bottom-up assessment of housing needs. This is a very simple comparative exercise meant to provide a rough sense of magnitude. Of course, using the G7 average excluding Canada would dramatically increase the number of units required to achieve that metric. In Ontario for instance, it would take an additional 1.2 million homes for that province to have the same dwellings to population ratio as our international peers.

 

[TRONto]

Scotiabank report: Ontario would need to have 650,000 more housing units just to meet the average number of housing units per capita in the rest of the country.

Which Province Has the Largest Structural Housing Deficit?

www.scotiabank.com

Wow >>> In Ontario for instance, it would take an additional 1.2 million homes for that province to have the same dwellings to population ratio as our international peers.

 

[Undead]

Wow >>> In Ontario for instance, it would take an additional 1.2 million homes for that province to have the same dwellings to population ratio as our international peers.

They may have more supply, yet there are property bubbles across much of the G7/G20...