The Affordability Task Force Reports

The report of the Province’s Task Force on housing affordability is breathtaking in its scope and ambition, particularly overhauling land use planning as we’ve come to know it. They bank on an increase in supply as the solution to Ontario’s housing affordability problem and they do not hold back: double housing construction, allow four storeys and four apartments as of right in established neighbourhoods, unlimited height near transit stations, twelve storey wood build and no parking where there is transit.

Many of these ideas have been kicked around before. The Task Force has not invented a new silver bullet that solves housing, but so what? These ideas have rarely come packaged up with such a sense of urgency and from a task force that pushes past the usual discourse. Nevertheless there are some fundamental tensions at the heart of the report and those tensions are now on the desk of the Minister of Housing.

The first arises from the Task Force’s prescription for established single family neighbourhoods. Have these people been to a public meeting lately? A developer that proposes hints of any of those recommendations is met with objections and local press featuring a stern looking cross armed neighbour in the traditional NIMBY pose. The Task Force boasts strong development experience in its ranks – both for profit and non-profit - so…yes, they have been to public meetings lately.

The first tension in the report is the tension between NIMBYism and citizen input: how much input into development should neighbours really have? The Task Force favours a lot less than neighbours have now.  While unlimited height (or height limited by engineering) and automatic approval of four bedroom houses in established neighbourhoods is hard to get your head around (including me), density on the subway line is a planning no brainer and the report will push the discussion on density where I think it needs to go.

If its attack on NIMBYism is the first core tension in the report, its delicate contrast between “housing affordability” and “affordable housing” is the second. Let’s start with housing affordability. The report is aimed at making housing less expensive at the market pricing level. Lowering that market price level improves “housing affordability.” But can these recommendations really create so much supply competition that market price will really fall? Hmm, let me check the old crystal ball here and… wait for it… hard to see the future is. The most truthful answer is: I don’t know and neither does anyone else until we try.

There are, nevertheless, some real questions to be asked.  We would not just have to meet demand to lower price, we would have to outpace it. If demand is matched (all other things being equal) there is no change in price. Given what we know about demand, that’s not a given. What’s more, the cost of buying in single family residential neighbourhoods could go up, not down. If all single family homes can now be converted into four rental units, the value of those homes is surely higher then it used to be.

The uncertain impact on pricing leads to a third tension in the report. The problem of housing affordability is cast in terms of ownership housing (house prices have gone up), but the solution is cast in rental terms. In effect, part of the solution to housing affordability is to replace the single family home with rental suites. If you want to live you life in North Toronto in the future, you may not be able to afford to buy a single family home, but you may be able to rent a second floor. Your rent may be less than a mortgage on the entire home, but you are not the owner. That is a big shift.  

There are hard questions for any government accepting these recommendation: will units in single family residences be rent controlled? Will there be limits to the number of such suites one person can own? Will there be size limits to ensure there is still room for family units in existing neighbourhoods? To cast the questions more positively, what about the benefits of more people being able to choose to live in North Toronto (or elsewhere), or being able to use the new rules to create inter-generational living – effectively, creating their own affordability on land they already own? Balancing those interests is now in the hands of the Minister of Housing. I have to tell you -  I would love to have his job right now.

Let’s get back to Affordable Housing more specifically. In the report, “affordable housing” is really anything that is not a pure market price home.  It was not the Task Force’s mandate to deal with affordable housing – and yet, they can’t ignore it. From a development perspective there is good stuff for non-profits. After all, when it comes to speed of approvals or limiting NIMBYism, what’s good for the for-profit builders is good for the non-profit builders. On these points, the building industry and housing sector should be acting in concert more regularly. The elimination of development charges for non-profits is also welcome, although detail is needed on how to treat certain kinds of affordable ownership housing. Finally, the report includes an appendix relating to Affordable Housing which weighs in on Inclusionary Zoning. That’s a whole other blog.

The distinction between “housing affordability” and “affordable housing” leads to our fourth tension – this one is acknowledged in the report: even with the amount of supply being recommended, it is not a solution for anyone who can not pay a market cost for housing. The report points to second mortgage programs such as Habitat or Trillium Housing as the methods by which ownership would be available to Ontarians who cannot pay market price. This is no different then it is today. The report warns of “demand side” interventions to avoid pumping up prices, but what does that translate to? No more rent supplements?

No more second mortgage financing? The report is inconsistent in this regard as it promotes demand side intervention in ownership specifically, but warns against it in other pages. In my view you can’t have a complete housing policy without worrying about demand and creating more equitable access to housing. The point of a housing policy is to ensure that there are housing options for all. The report leaves the below market “affordable housing” largely to the government to tackle as a separate matter.

Still, while a full throated declaration that housing is a human right may not be embedded in this report, it is still positive for non-profits and co-ops as long as government policy does not just stop with supply. And there is no doubt that the urgency that runs through the report creates a welcome focus on housing needs and real problems within the development system. For housing advocates, the urgency is not new – there has been a need for making housing easier to build and for more housing choice for decades, but that does not diminish the importance of this report right now. Again, doesn’t Steve Clark have the best job in Ontario right now?