Developers love the Tories’ housing policy. That doesn’t mean it’s bad

OPINION: The ink hadn’t even dried on the government’s housing plan before critics charged that it was a giveaway to developers. But if it means that more homes get built, then what’s the problem?
By John Michael McGrath - Published on May 3, 2019
Ontario minister of housing Steve Clark makes an announcement
Minister of Municipal Affairs and Housing Steve Clark unveiled the Tories’ housing policy on Thursday in Scarborough. (John Michael McGrath)

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Josh Matlow, councillor for Toronto’s Ward 12, was probably never going to love a housing policy put forward by the current provincial government. But he really doesn’t like the one that the Tories unveiled in Scarborough on Thursday.

“This is an answer to developer industry lobbyists,” Matlow told reporters after the announcement from Minister of Municipal Affairs and Housing Steve Clark. “The development industry won today, and I think the people who this government purportedly represents need to be able to take a stand and fight back.”

Matlow’s anger is understandable: he had argued long and hard to limit the powers of the Ontario Municipal Board, and it had been a real victory for him and other councillors when, in May 2017, Kathleen Wynne’s Liberals eventually listened, overhauling the OMB (which they rechristened the Local Planning Appeal Tribunal) and forcing it to defer more to local councils.

The victory proved short-lived: the Progressive Conservative government is proposing to give the tribunal the same power to overrule local city councils that it had under all but the last few months of the Liberal government.

The Tories appear to have two priorities: get more housing built and get more types of housing built. Key to both is restoring the tribunal’s power to impose a decision on city councils that have either refused to issue a permit or failed to make a decision. How you view that power depends on where you stand: Local councils see it as trampling on the rights of local democracies. Developers see it as something that forces councils to allow them to build the housing required by provincial policy. For the government, it offers a way to address the issue of the 100,000 or so units that the Toronto Region Board of Trade estimates are currently caught up in LPAT appeals — units that the government wants to see come to market.

There’s a lot more to Bill 108, the Tory housing legislation introduced Thursday afternoon at Queen’s Park, and there will be time to hash out the details in the days and weeks ahead. But it’s worth pausing for a second to consider the point Matlow made about who will benefit from these policies.

It’s certainly true that developers are happy about the changes proposed by the government. They’ll tell you as much.

“We have a shortfall of supply across the Greater Toronto Area,” said Dave Wilkes, CEO of the developer group BILD. “The bottom line here, and it’s a simple one, is that we don’t have enough homes for the people who are looking for homes in the area.”

But here’s the thing: homebuilders are going to be happy about any policies that make it easier for them to build more homes. That isn’t, and can’t be, a disqualifying factor for policy. The Liberals made it easier to build green-energy projects in Ontario by introducing measures that stepped all over local council powers — and private energy firms made a bunch of money because of that. Progressives mostly ignored the howls from rural communities, believing that switching to renewable energy was worth the trade-off.

So there are two questions we have to answer: Will this actually make homes more affordable? And will communities get more of the kinds of homes they want to see?

If the Tories are crazy for thinking that more construction will help ease housing prices, they’re not alone: governments across the developing world are struggling to get new home construction back to the levels seen before the 2008 financial crisis. In conservative-led jurisdictions such as the United Kingdom and in more progressive ones such as California, that’s meant addressing local planning constraints. Compared to some of the ideas coming out of West Coast state legislatures down south, the Tory plans are pretty tame.

But more construction, on its own, may not be enough. Indeed, Clark suggested as much on Thursday, emphasizing that homebuyers need choices beyond just the condos that Toronto has been building in huge numbers.

“Families are asking, ‘Why aren’t there enough apartments, condos, midrise buildings, and townhouses I can afford?” Clark said. “Parents out there know: kids come with stuff. It’s not realistic to think that a family with a couple of kids in a 700-square-foot apartment with a storage lockers is the way to go.”

So the government wants to see larger units more suitable for families as well as the compact, transit-oriented development that provincial policy has preferred for more than a decade. And it’s going to make it easier to build rental apartments instead of condos by letting rental builders (and non-profits) defer development charges for five years (for-profit condos will still need to pay upfront). In Toronto — a city whose official plan, in theory, supports transit-oriented development and whose councillors have regularly decried the lack of new rental construction — this should be a winning proposal, right?

Wrong. The loudest critics of the Tory proposals thus far have been downtown progressive councillors, and it’s likely that a large majority of councillors — from the suburban right to the downtown left — will end up opposing the changes. After all, a majority on council voted earlier this year to express opposition to more aggressive building targets around subway stations, among other changes proposed by the province.

And this is why the rhetoric about “giveaways” to developers is so dishonest. If bringing more homes to market is part of the solution to housing affordability — and just getting us back to pre-2008 levels of homebuilding would mean 10,000 or so additional units in the GTA — then that means somebody needs to build them. Even when they’re cheap, homes are expensive, so whoever builds them will, if they’re a for-profit company, make a lot of money. (Did we mention that the Tories are also proposing to help non-profit builders?) The government could build them itself, but, tragically, voters are almost as uninterested in social housing as Toronto city council is: for nearly a decade, council has voted in favour of below-inflation property-tax increases as its community-housing stock rots.

Just because someone is going to make money building homes doesn’t mean that the Tories have bad or corrupt housing policy. The homes that get built in Toronto because of this government’s policies will be exactly the kind of homes the Liberals preferred — the Tories just want them to be approved more quickly. Municipal councils may like having the power to say no to stuff that the province has already said yes to. But people looking for a home to raise a family in may not think that’s a good enough reason to stop new homes from being built.

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