While the Ontario Real Estate Association’s proposal to end exclusionary zoning and create as-of-right zoning for alternative housing is a good first step in ending community and political NIMBYism towards affordable housing alternatives, these suggestions address symptoms, not causal factors of housing unaffordability.

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Most of the housing-related legislation, initiatives, strategies and tactics passed in the last 40-plus years have focused on how to limit housing demand, or such programs inadvertently contribute to increasing demand, rather than increasing supply. Foreign tax on property purchases, barring foreign ownership for two or more years, taxing property “flippings” and other supposed affordable housing tactics are attacking symptoms, not causes and will all result in dire unintended consequences.

For example, while financial breaks for first-time homeowners may sound great, that incentive only increases the number of prospective buyers who are competing for the same diminishing housing inventory. Conversely, increasing the qualification bar for mortgages may have removed 200,000 Canadian families from the pool of competition but those same families didn’t move out of their rental properties, so the blockage at the top has a cascading effect of locking out new and low-income tenants from the low (“affordable”) end of the rental market.

There are a variety of other causal factors and significant challenges that impede, discourage or prevent the building of second suites, which are always rental units, and subdividing larger homes into smaller homes and rental units. These factors are spread across the three (or four) principal layers of government, which generally pay lip service to inter-governmental co-operation.

In Ontario, the Residential Tenancies Act (RTA) is brutal against landlords. Out of 46-plus potential breaches, 34 uniquely benefit tenants while one uniquely benefits the landlord. One breach benefits neither landlord nor tenant.

The Landlord and Tenant Board (LTB) is a disaster, so much so that a class action has been in discussion between the province and an organization representing small landlords. Multi-year above-guideline increase applications for recovery of capital cost investments discourage any rental property maintenance beyond minimum property standards. Rent control, despite its seeming benefit to tenants, actually is a significant career- and lifestyle-limiting factor in tenant personal growth. It also transfers the financial obligations and duties regarding municipal services from low rent-paying tenants to their market rent-paying peers.

Canada Revenue Agency policies significantly discourage housing investment, especially in the missing middle sector (as OREA noted, “condoscrapers” and single-family homes) because of passive versus active income, recoverable capital cost allowance, capital expense depreciation policies and much more.

Property insurance skyrocketed in 2020 with the Canadian insurance industry enjoying one of its most successful and profitable years in decades – during a global health pandemic. Those costs are passed on to tenants and homebuyers.

Utility rates have skyrocketed, especially electricity. Government and utility companies, which are often owned by municipalities, also pay only token gestures to alternative energy sources that could increase housing affordability. I installed solar panels and the government denied the HST rebate and the Greener Homes construction rebate.

In many Ontario municipalities, rental properties are taxed (property tax) between two and 2.5 times higher than single-family homes and condos. Renters carry more municipal services burden than single-family homeowners. Affordable housing is not possible until the affordable housing paradox is resolved. The higher the property tax, the lower the net operating income on which property tax is based. Therefore, raise property tax = lower property value (equity) = less funds for municipal services.

As OREA says, multi-year municipal approval processes are a major impediment to affordable housing development.

Punishing municipal development charges drive up housing prices too. The City of Oshawa and Region of Durham collectively charge $71,733 for a single-detached home, $57,733 for a townhouse and $42,842 per unit for an apartment building. Toronto charges $87,299, $72,158 and $51,103 per unit respectively. Using an average price for a detached home in Oshawa of $723,700, development charges represent 10 per cent of the price.

What surprised me, and I still don’t have clarification, is that the Municipal Act 2001 (Fees and Charges) states, “A municipality or local board does not have the power under Part XII of the (Municipal) Act to impose fees or charges for the processing of applications made in respect of planning matters under the Planning Act. O. Reg. 244/02, s. 3 (emphasis by me). Are development charges separate from Planning Act matters?

Separately but related, under the Planning Act 1994, s. 1.1 “The Purposes of the (Planning) Act are … (d) to provide for planning processes that are fair by making them open, accessible, timely and efficient; (e) to encourage co-operation and co-ordination among various interests; (f) to recognize the decision-making authority and accountability of municipal councils in planning. (emphasis by me). Do these lengthy municipal delays, burdensome administrative demands and oppressive fees and charges not contravene the Planning Act? Perhaps one of REM’s readers who are expert in such legal matters might post a comment?

Construction costs have also skyrocketed. No matter what inducements and incentives are offered, the cost to build anything has increased and that is the foundation for establishing the consequent sale price. The quadrupling of lumber costs over the past one to two years is everywhere in the news but steel, concrete and glass have also risen, so much so that major building projects are buying out total inventories years in advance, leaving virtually nothing for smaller projects. More workers are also leaving (typically retiring from) the construction industry than are entering it so skilled labour costs have risen.

Higher-density housing means greater parking challenges. Many applications for increased parking space run afoul of municipal “green space” zoning and supposed curbside appeal.

I built a seniors’ affordable housing pilot and shut it down in part because no mainstream lender would finance affordable housing, and private lenders wanted on average four times the prime market rate because seniors and affordable housing are “too risky.” Building insurance was quoted at two to three times higher than student housing, again because seniors were higher risk than students.

Many other housing-related government policies and strategies intersect in counter-productive ways. All layers of government completely ignore the small landlord sector but CMHC reports that 49 per cent of all purpose-built residential rental housing in Canada is owned by “non-incorporated” entities, that is, individual owners who hold title in their own name. Statistics Canada reports that there are perhaps 250,000 public housing units and 14 million private residences built by the private sector.

Ontario’s debt is the largest subnational debt in the world, ranked at number 20 – higher than the debt of 168 countries. Ontario pays $9 million per hour in interest payments. Canada is ranked number 10 worldwide despite its population-to-land ratio likely being one of the lowest in the world and without a doubt the lowest of all first-world countries. Government doesn’t have the resources to solve housing supply, let alone provide a fraction of much-needed public housing.

There are other causal factors that must also be considered as part of an all-inclusive housing strategy, which the federal National Housing Strategy hasn’t addressed. The strategy is mostly toothless and mired in red tape and bureaucracy.


  1. There was only ever one reason for inflation. More demand than supply. The more demand isn’t coming from Canadians born here. There’s not enough to fuel greater supply needs. The inflated demand is from wealthy foreign investors and immigrants and local flippers who know those foreigners are going to keep coming. We have the room for immigrants but poorer Canadians can’t compete with the wealthy foreigners. I suspect there may be a bit of money laundering from abroad made easier with crypto currencies. What do you think? I’ve been in the business 35 years.

  2. Is there anyone else out there willing to comment on Canadian socialism causing our lack of housing, affordable or not. Complacency runs rampant. Don’t wait for Justin to build you a new home. Even if he did, he would be using your money, what ever is left after giving most of it away to the rest of the world or his family.

  3. The goal of eliminating or altering single-family-only zoning in existing neighborhoods may have benefits but it is unrealistic and problematic. Will current owners of multi million dollar homes tolerate or support this change? Of course not and neither will the politicians who represent them. We will end up fighting over the politics of change for years while the shortage of homes continues unabated. I admit I don’t want my neighborhood changed either. I worked hard and paid for the privilege and I don’t want to sacrifice my lifestyle when we have thousands of acres of land available for the construction of new homes…affordable homes.
    Let’s save our time and money and move on to create new suburbs of affordable homes much the same as Canada did after the war. Small homes on small lots. Perhaps more suburban sprawl is not the most desirable solution but it is realistic and doable now. Mixed zoning…why not in new neighborhoods?
    Instead of digging up existing infrastructure to accommodate increased density, lets just build new systems. They will probably cost less, function more efficiently and be finished faster so people can move into the new neighborhoods sooner rather than later..

    • new Zealand passed a law recently that has by-passed municipal planning bureaucracy and nimbyism.

      I believe many people from all walks of life would not support the idea of separate “affordable housing” communities. The cost of infrastructure is huge and many existing communities have significantly under-utilized infrastructure which cost is not recovered by the existing communities–not unless property taxes were raised significantly and we all know how well-supported that notion would be. I suspect somewhere below “let’s remove rent control.”

  4. Over the years I have worked at a few new homesite, and saw first hand the number of investor buyers coming in to buy.
    I would guess 1/3 of the new homes were sold to investors. (Canadian investors, not Foreign investors). If we are talking about lack of inventory, maybe we need to deal with investor buyer as a big piece of the problem. Maybe then more 1st time home buyers realize their homeownership dream.

  5. Great article, as always Chris.

    I believe the landlord and tenant board is a biased grouping of Marxist-leaning, anti-profit-seeking, agenda-driven closet communists who wouldn’t risk anything in lieu of maintaining their comfy government positions. We can thank our Marxist-dominated education system for turning out these we-know-what’s-best-for-y’all bureaucrats who wouldn’t know how to navigate in the real world unless they could find rules to follow. The more big government we get, the more expensive and potentially effed up things become.

    Where does it say everyone deserves a freehold property of their own? Those who make that their prime directive in life will likely achieve their goals. Those who spend their dollars foolishly and wait for government handouts likely won’t. Seems just about right to me.

  6. A very informative article. I hope someone other than realtors are reading it. The same problems you are facing as a landlord( oxymoron) are the same ones faced by this group when I was vice-president of the Ontario Landlords Association in the late 1970’s. I was interviewed on Canada AM, the earlier name for CTV News. I said among other things that if Ontario didn’t phase out of rent control, people would be living on the street. Of course nothing came of it except I got a free Canada AM coffee mug. It is an antique now like me. That is the only change


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