CMB MAGAZINE cmba-achc.ca winter 2019 | 19
housingpolicy
M
ayor John Tory received a
huge vote of confidence last
October, receiving 63.5 per
cent of the vote in Toronto's
municipal election, eclipsing the next most
popular candidate by more than two to one.
On one hand, this can be interpreted as an
endorsement of the status quo. However,
Tory campaigned on a series of new promises
including creating 40,000 "affordable" rental
units over 12 years.
Tory provided scant information on how
to deliver on this promise, but it appears he
intends to ramp up the city's existing Open
Doors program, where city hall offers
incentives (such as property tax relief and
fast-tracked permit approvals) to private and
non-profit developers providing below-market
rental and ownership housing. e program's
intentions are laudable, but it would have to
more than triple its original annual output
of units to meet Tory's 40,000 target.
So what else can the mayor and council do?
For starters, fast-track all types of housing—
large units, small units, ownership and rental.
Why? Because the only way to reduce "market
rate" housing costs in a desirable city such as
Toronto is to build more housing. A lot more.
According to Fraser Institute research on
the building permit approvals process across
Greater Golden Horseshoe municipalities,
it takes one-and-a-half years (on average)
before builders can break ground in Toronto.
is process is also strewn with uncertainty
and high regulatory costs, reaching almost
$47,000 per unit in 2016. All of these factors,
combined with local opposition to new
homes, deter the many new housing units
needed for demand to keep pace with supply.
On the rental front, Toronto can only
deliver once city hall has a better grasp of the
economics of rental development.
According to research commissioned by the
Canada Mortgage and Housing Corporation
(CMHC), returns on rental development are
negative or negligible in most of Canada's large
cities due to high land costs, high property
taxes and high sales taxes relative to rental
income. By reducing these barriers (e.g. cutting
the disproportionately high property tax rate
on apartment buildings and relaxing zoning
restrictions on additional rental density) city
hall can start addressing the severe lack of
rental vacancy in Toronto.
Armed with a clear mandate and
fresh ideas, Mayor Tory has the political
green light he needs to address Toronto's
most pressing problems. On the housing
front, Tory and his new council can deliver
by reducing barriers to the many new
homes current and aspiring Torontonians
desperately need.
is article originally appeared in Fraser
Forum, the Fraser Institute blog. More at
fraserinstitute.org
HERE'S HOW JOHN TORY
CAN DELIVER ON HOUSING
The new Toronto mayor's incentives are a start, but council will have to do a lot
more to spur affordable housing BY JOSEF FILIPOWICZ, SENIOR POLICY ANALYST, FRASER INSTITUTE
Chris Young/Canadian Press
