Getting Out of Our Own Way

HOUSING IN TORONTO is expensive because there isn’t enough of it.It sounds like conventional wisdom—and it is, now. This supply side analysis has, in recent years, become a consensus view. It was anything but when I first started paying attention to the issue in late 2012, following the release and my read of American blogger Matt Yglesias’s book The Rent Is Too Damn High, in which he applies a simple and clarifying supply-and-demand framework to urban housing.Even six short years ago, in 2016, Toronto’s then chief planner mused regularly about the “insatiable” nature of housing demand, suggesting that adding supply would not actually alleviate this pressure. Or, as she put it then, “more stock doesn’t mean lower prices.”Times have changed, and over the past few years, commentators of every political stripe have come to agree that if we want more people to have housing, we need to build more housing.That’s a promising start.Politicians from all parties are saying the same thing. The federal government, in its 2022 budget, noted that there are “a number of factors that are making housing more expensive, but the biggest issue is supply. Put simply, Canada is facing a housing shortage—we have a lower number of homes per person than many OECD countries. Increasing our housing supply will be key to making housing more affordable for everyone.”In Ontario, the governing Progressive Conservatives centred their recent re-election campaign on a theme of building. Premier Doug Ford promised to facilitate the construction of 1.5 million homes over the next ten years—a large increase over the approximately 670,000 that were completed over the last decade.Again, very promising.There’s also general agreement that increasing housing supply will require broad-based land-use liberalization—that if we want to build lots of new homes, we need to loosen the rules that currently constrain their construction.Again, from the 2022 federal budget: "Building more housing will require investments, but it will also require changes to the systems that are preventing more housing from being built. The federal government’s goal is to incentivize the cities and towns that are stepping up to get more housing built."Housing policy does mostly lie within municipal and provincial jurisdiction, but the federal government can, and soon will, use conditional cash transfers to nudge supply policy in a more permissive direction.In response to public outcry over escalating prices, Ontario’s Ministry of Municipal Affairs and Housing formed a Housing Affordability Task Force and commissioned a report with recommendations “for additional measures to quickly increase the supply of market housing in Ontario.”Among other things, the report sets out recommendations that would “remove exclusionary rules that prevent housing growth.” These rules are mostly set by municipalities and include a large and growing list of limits placed on new housing development. Among these are constraints on the number of units permitted in certain areas, on building heights, on building depths, and on lot coverage.Yet again: a promising endorsement of the need to increase the number of new homes we build and a recognition that we will need to liberalize land-use policies and remove other supply constraints to make that possible.So why, given all this consensus, aren’t we seeing more actual improvement?

ONE ANSWER is that restrictive land-use rules are popular. Though Torontonians generally agree we need more housing, most don’t want it built anywhere near their own backyards. New housing proposals are generally met with discord and skepticism: community meetings often verge into self-parody as existing residents warn about threats to their parking, their schools, and their very way of life. Politicians are aware of this and—especially municipally—it inevitably shapes their decisions. This is the NIMBY problem.But that isn’t the whole of it. There’s another element that deserves a bit more exploration: decision makers are suffering from both a failure of imagination and a failure of nerve.That is, they understand what the problem is and they understand in broad terms what the solutions should look like, but they don’t do much to advance them.Taking a prospective new housing development project through the municipal approval process—which can include an Official Plan Amendment, Zoning By-law Amendment, and Site Plan Control—is a long, slow, and arduous ordeal. Of course, there needs to be some process for reviewing and approving new housing proposals; this is essential with infill development, to ensure that there is proper coordination with surrounding properties and public spaces and that negative externalities are reasonably minimized or mitigated.But there is no justification for that process being as slow and opaque as it is. To take one point of comparison: it takes a developer an average of 10 procedures and 54 days to get through approvals and receive a building permit in Singapore. In Ontario, it takes 12 procedures and 249 days. At every step of the way, there are countless regulatory and procedural roadblocks to overcome, including, of course, the general uncooperativeness of municipal departments—which often disagree within and between themselves. It is not uncommon, for example, for two departments to provide contradictory directions to a developer, who has no path to resolving the conflict.Every single Toronto real estate developer, the vast majority of affordable housing advocates, and, off the record, a surprisingly large number of City planners will tell you that approvals have become worse over the last five years: slower and more uncompromising, with new rules and processes. Each is perhaps semi-defensible on its own, but taken together, they amount to an increased overall burden nonetheless—just as our housing crisis has intensified and just as political arguments about the need for increased housing supply have (correctly) ramped up.Few, if any, politicians have insight into these day-to-day realities. They haven’t, for the most part, worked in housing—not as developers or as housing advocates or in any other capacity that would give them a concrete appreciation of how things unfold on the ground. They don’t know how long, slow, and arduous it is. They don’t know the specifics. As a consequence, they don’t do much, if anything, to improve things.The ones who do know are mired in a civil service that is deeply entrenched, deeply skeptical—antipathetic even—to concerns that this state of affairs is seriously harming housing affordability, and deeply resistant to change.

LEST I BE ACCUSED of being overly sympathetic to developer concerns, let me be clear: I’m not talking, right now, about the substantive policies that determine how and where we build new homes. I’m talking just about the process by which we decide or move a decision through the bureaucracy. For example, why is the approvals process still primarily conducted through emails and PDF attachments? Why has this not all been migrated to a platform that better tracks submissions and responses, including response times? Why does the City accept payment of certain fees only in person by bank draft? Why are developers, planners, and architects genuinely unsure, in many cases, if design guidelines are mere suggestions or firm requirements? Why is it routine for a developer to be stuck in a disagreement between two City departments with no path to getting a quick resolution? Why is there a small but thriving cottage industry of permit expediters?!Really think about that last one. It’s bad enough that the approvals process is so impenetrable that developers have to rely heavily on urban planners and municipal lawyers to translate and parse municipal bylaws, performance standards, guidelines, and other documents to move their projects along. But the sole function of permit expediters—typically former Toronto Building staff themselves—is to leverage their relationships to obtain faster application reviews.There are no technical barriers to expediting and streamlining the approvals process, and there are solutions to these problems. The City could commission a digital platform to better manage and track project proposals from first application to building-permit issuance—one that supports online payments for all fees and charges. It could clarify, in plain English, that design guidelines are in fact guidelines and not law. It could implement an internal dispute-resolution mechanism for those occasions when multiple departments provide conflicting comments on submitted documents. And so on.These are all obvious reforms, low-hanging fruit of which there is no shortage. They are also not inherently political; there aren’t ideological or policy questions at stake. There is only a need for imagination and nerve: the imagination to think up simple solutions to simple problems and the nerve to implement them as a corrective to the status quo.

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