The Ontario Real Estate Association is calling for an end to exclusionary single-family zoning rules in high-density areas and near transit and subway stations in cities across Ontario to combat a housing crisis that is keeping home ownership out of the hands of many.
“We’ve moved from an affordability challenge in Ontario to an affordability crisis,” says OREA CEO Tim Hudak. “The Canadian dream of home ownership is slipping out of reach and it’s time to do something about it.”
The association says it makes no sense that it is illegal in many urban neighbourhoods of Ontario to convert a single-family home into a townhome, duplex, triplex or fourplex without a zoning bylaw change, while it’s relatively easy to convert an outdated wartime bungalow into a monster four-storey home for one wealthy family.
However, if a property owner wanted to take that same house and create affordable homes for up to four families, “expensive process, delays and NIMBY (not in my backyard) forces stop that in its tracks,” says Hudak.
“You have to go through an entire zoning process, which could take up to a year or more (and) cost tens of thousands of dollars in fees, let alone legal costs. Many forces use delaying tactics to empty the wallets of those that want to develop these homes, so they don’t even bother in the first place. That means that affordable homes are even more scarce in urban areas.”
Hudak says outdated bylaws from the 1960s and 1970s “conspire to eliminate affordable housing options in our large cities and it’s time to relegate them to the ash heap of real estate history.”
OREA is calling on the province to use the Planning Act to implement as-of-right zoning in highest-demand urban neighbourhoods, which would allow for the seamless and legal development of gentle density, without lengthy case-by-case approvals.
“This is a powerful key that will unlock home ownership for so many first-time homebuyers. Once you get on the first rung of the ladder and get your first home, it’s easier to move up later, and free up that single-family home for another set of first-time buyers.”
Hudak says a broad-based approach that increases supply will increase affordability for people struggling to get into the housing market in major urban areas. “Right now, many of our big cities are either tall or sprawl – monster skyscrapers or single-family homes. This would create the necessary missing element that is so appealing to first-time homebuyers or empty nesters.”
He notes municipalities could make zoning changes on their own or the province of Ontario could use a carrot approach to make changes happen. As part of the approach, when the province makes infrastructure decisions on roads, transit, water or sewer, it should put at the top of the list municipalities that have paved the way for affordable homes.
About 100,000 new homes are required to meet growing the demand for housing in Ontario. Ending the exclusionary zoning policy would have the biggest effect in closing the gap in urban areas, he says.
Millennials now in the housing market or about to enter it represent the largest demographic in Canadian history, surpassing the baby boomers because of immigration, he says.
OREA’s recommendations to implement as-of-right zoning is part of its plan, launched in late September, to increase housing affordability.
Hudak says much of the last federal election campaign focused on housing affordability and the issue will be even more important in the Ontario election, to be held on or before June 2, 2022. The OREA campaign aims to set the groundwork for next spring’s election campaign, says the former Ontario PC party leader, noting OREA has arranged meetings with more than 80 MPPs.
According to research by Abacus Data for OREA, 78 per cent of Ontarians support minimum zoning in urban areas to encourage more homes.
OREA research has also found almost half of Ontarians 45 years and younger have actively looked to other provinces to live simply because they could not afford a home in Ontario.
The prospect of Ontarians leaving for provinces like New Brunswick and Nova Scotia “really catches the eyes of MPPs,” he says. “This is a huge concern because it’s the next generation of entrepreneurs, job creators who will be looking to other provinces. If that’s not a clarion call to action, I don’t know what is.”
Other aspects of the Bring Affordability Home plan include allowing second front doors as-of-right across Ontario to give more people the option to create secondary suites in their homes.
“Back in the disco era there were sweeping changes across Ontario that eliminated secondary suites in many neighbourhoods,” Hudak says. “In the long run, it meant so many rental units are in large buildings. We think you should give people a greater choice.” Allowing more secondary suites will open up new neighbourhoods for rental units, increase affordability for tenants and enable homeowners to use the rental income to pay their mortgages down 15 to 25 per cent faster, OREA says.
Another proposal calls for the creation of a municipal challenge fund that would help municipalities that are trying to modernize zoning bylaws and eliminate unnecessary red tape to hire additional staff.
OREA is also calling for the first-time home buyers land transfer tax rebate to be doubled from $4,000 to $8,000. Hudak says OREA was successful in getting the previous Wynne government to increase the tax rebate from $2,000 to $4,000. A further doubling of the tax rebate will mean first-time homebuyers in much of the province will pay no land transfer tax. While it won’t eliminate the tax in the most expensive markets, it will help buyers with their down payments or renovations, he says.