Housing Revisited: Report of Ontario Affordable Housing Task Force, Part Two

In the first part of this article I reported on a broad range of suggestions that the Affordable Housing Task Force put forward. In this second part I'm going to something of a different tack to deal with one last set of recommendations---how to cut 'red tape'. After that, I will move onto some general comments on the report-as-a-whole. 

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It's taken me a fair amount of rumination to decide how to explain the issue of red tape because it's one of those things that I find excites strong opinions in people. I've written a couple articles in the past where it came up, but it requires a lot of nuance to avoid falling into the easy and sloppy cliche of dismissing it as nothing more than evidence of sinful socialism. That's because conservatives love to complain about red tape and usually suggest that the only real solution is to unleash the "invisible hand of the market place".

The problem with this trope is that a great many of the issues that red tape deals with come about as a result of very significant problems. What sometimes gets dismissed as "unnecessary red tape" are rules and regulations designed to protect the public from the "invisible hand of the marketplace".  If society really got rid of all "red tape", it would probably end up in the sort of "free market utopia" that Upton Sinclair described in his novel The Jungle. That was a world where a small number of individuals got very rich working a lot of poor people to death in dangerous meat-packing plants so they could sell tainted food to the masses. 

This is what you get if you totally remove all "red tape" from an industry. Public Domain image c/o McClures Weekly Magazine.

 

 

Having said that, there is a tremendous "opportunity cost" that comes from having a bureaucracy that simply cannot do things in a timely fashion. Canada is absolutely rife with this sort of thing. To cite a minor personal example, when I went through the process to change the status of my home from an illegal duplex to a legal one, part of the procedure was to get a fire inspection. This involved a SIX YEAR delay between application and a fire officer actually showing up. At that point, the officer told me to contact the Electrical Safety Authority (ESA) to get a mandatory electrical inspection.

I found out that at that time the only way to do this was by making a telephone call. Unfortunately, I found the line to the ESA office could be busy for hours on end. At that time, I only had a pay-as-you go smartphone---which meant that I would burn through my prepaid minutes and spend lots and lots of money more if I wanted to get through to book an inspection. So, instead I installed a Voice Over Internet Protocol (VOIP) system on my laptop so I could call the ESA office for free. I put the laptop on my kitchen table with the volume on high and went about my daily business to wait to get through. After several hours I did and made my reservation. (I asked in passing how contractors deal with this sort of wait time. The receptionist said that they have a fax number instead. I later found out that if an electrician has a good reputation, they just fax the paperwork into the ESA and it's "deemed as having been inspected"---even if it wasn't.)

This is just one example of the totally out-of-control bureaucracy we all have to deal with. I've mentioned this to several other people and almost invariably I get a somewhat similar example thrown back at me. What has really surprised me is when I have mentioned the need to speed up process times in situations like this and gotten back the bland response from elected officials that it never occurred to them that it was their job to make stuff like this more efficient. Instead, they thought this best left to the professional staff.

To be fair to politicians, I suspect that this attitude is an artifact of the division between elected officials and government agencies---which is a very good thing. We really don't want to have our politicians directly meddling in the delivery of individual government services. But having worked for an institution that I used to jokingly call "the Last Outpost of the Soviet Union", I would like to point out that paid staff in large public institutions learn to follow different directives than "serve the public" or "get the job done". Instead, there seems to always be a tendency to instead "cover your ass". That is to say, the job of the civil service often isn't to serve the public good as efficiently as possible, but rather to avoid being seen as having made a mistake. Bureaucracies often become incredibly risk averse, and this dramatically degrades the service they offer.

There are reasons why this comes about. For example, I've read several articles by experts that suggest a great deal of what happens at border crossings and airports since 9/11 isn't very good at keeping the public safe. Instead, it is not much more than "security theater". The suggestion given why it is so intrusive---if not effective---is because managers are obsessed by the idea that they don't want to be the person who was in charge "when a terrorist got through". So if we are lined up in security hours before our airplane departs and it takes forever to get through it's probably because management is "covering its ass". 

This collective fear of "getting caught with our pants down" shouldn't be confused with a concern about actually "getting the job done". If there really was a big chance of my duplex turning into a deadly inferno, for example, making me wait six years for an inspection would hardly have been a good idea. This is another thing I learned where I used to work. Filling out the paperwork often seems to become more important than the actual task at hand. Even if what they do doesn't even work, if they can be seen to be doing it---and there's a paper trail---their ass is covered!

This isn't the way the world has to operate. As I pointed out in a previous article, Estonia decided that they were going to make stream-lining it's bureaucracy into a national priority. It did this because it thought that if it cut out as much unnecessary red tape as possible, it would give the country a competitive advantage over other nations. They pay their taxes, charge out library books, ride the bus, get a fire inspection, electrical inspection, etc, with one single piece of plastic. ("One card to rule them all and with the blockchain bind them".) Different parts of the entire government bureaucracy share information, based on the rule that no citizen should ever have to give the same piece of info to anyone more than once. 

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A lot of journalism that I read is formulaic. The editor assigns a story based on research that says what does and doesn't generate ad revenue. The writer does some quick research and then hammers out a short text with graphics based on his or her ability to emotionally engage the reader. As a result, you usually end up with something that is just recycling conventional wisdom---generally with some sort of human interest angle. 

I don't do that. I spend a lot of time reading appallingly boring documents until I can get some sort of familiarity with the subject. Then I spend days obsessing about it until I feel like I have found the "nub" of the issue. Then I go through rewrite over rewrite in order to try to come up with the best way of expressing what are often really complex ideas that many of my readers will probably never have heard before. 

This is work. I'm happy to offer the results for free. But if you think what I do has merit and you can afford it, why not subscribe? Patreon and Pay Pal make it easy to do.

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It might seem I've gotten a bit off tangent with regard to housing. But from reading the Task Force report, it would seem that home builders have much the same sort of complaints about how hard it is to get an OK to build housing that I have had about getting my house registered. The difference is that all these delays cost developers a lot of money, and this gets passed onto buyers---which is part of what puts owning a home out of a lot of people's price range. 

The Task Force points out how out-of-control red tape has gotten in Ontario with a variety of startling statistics and illustrations:

One of the strongest signs that our approval process is not working: of 35 OECD countries, only the Slovak Republic takes longer than Canada to approve a building project. The UK and
the US approve projects three times faster without sacrificing quality or safety. And they save home buyers and tenants money as a result, making housing more affordable.

 

An Ontario Association of Architects study calculating the cost of delays between site plan application and approval concluded that for a 100-unit condominium apartment building, each additional month of delay costs the applicant an estimated $193,000, or $1,930 a month for each unit.

Another report---quoted several times by the Task Force report---is the BILD Municipal Benchmarking Study of September 2020. One of the more startling images it provided was a table of different types of studies that various municipalities require from developers before they will OK a proposal. (Click on the image to get a clearer version.)

And one last anecdotal comparison from the Task Force report.

Then: In 1966, a draft plan of subdivision in a town in southwestern Ontario to provide 529 low-rise and mid-rise housing units, a school site, a shopping centre and parks was approved by way of a two-page letter setting out 10 conditions. It took seven months to clear conditions for final approval.

And now: In 2013, a builder started the approval process to build on a piece of serviced residential land in a seasonal resort town. Over the next seven years, 18 professional consultant reports were required, culminating in draft plan approval containing 50 clearance conditions. The second approval, issued by the Local Planning Appeals Board in 2020, ran to 23 pages. The developer estimates it will be almost 10 years before final approval is received.

Just think about the last statement. There's an oft repeated story from climate activism to the extent that if you put a live frog in a pot of cold water and slowly heat it up, it will just sit there until it is cooked. (I understand that this isn't actually true, but it illustrates the point.) I'd suggest that our society is just a like a frog that is already well-done and well on it's way to become soup stock. Only people who have been absolutely beaten into submission would just accept that in the middle of a housing crisis it is acceptable to force developers to wait ten years to find out if the city will allow them to start building.

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I'm not going to get into the specific recommendations by the Task Force to cut red tape. There are a lot of them, and many quite technical. But I think it is possible to suggest some key factors to consider when we citizens think about these sorts of reforms.

• when a rule gets passed, assessing all opportunity costs must be part of the decision-making process
• when appropriate, computer technology should be used to stream-line the process
• attempts to involve the "triple bottom line" must be realistic and based on a willingness to trade off minor issues in favour of major ones
• appeal procedures need to be sufficiently onerous that they won't be entered into frivolously
  

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In economics an "opportunity cost" is the price you pay for pursuing one way of doing things versus another. With regard to the way municipalities and the province deals with housing, the reports that a developer has to commission and deliver in order to get a building permit come at the expense of the time it takes to get "shovels in the ground". If a large, numbers-driven institution---like a city or province---doesn't assign an actual specific cost to an activity, the natural tendency is for it to expand dramatically. When it does so, it can become a significant impediment to actually getting the job done.

One solution to escalating opportunity costs is to introduce "full cost accounting". That's a process where an attempt is made to itemize all the different elements of a specific activity in order to understand the opportunity costs. It's often used in environmental assessments in order to evaluate an activity. For example, where I used to work a decision was made to bring in a Star Bucks coffee bar to the library and charge the chain a fee for the privilege. A full-cost assessment would have included an evaluation of how this would impact house-keeping and building maintenance. (Shortly after the restaurant opened, the amount of garbage in the building dramatically increased. Coffee stains also became a huge issue with regard to the carpets.) If the university made $1000 off the coffee shop, but found itself spending an extra $2000 in garbage pick up and carpet cleaning, it wouldn't really make sense to bring in the franchise. 

Full cost accounting need not just be about money. It can also take into account time. If A process adds an extra $2000/unit/month to the cost of a home, or, delays building much-needed housing for 10 years, the logical option would be to either stream-line or eliminate it. 

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As I mentioned earlier, there are examples where computer technology can help speed things up. In my silly example with the Electrical Safety Authority, the logical thing to do would be to set up a web-page and allow people to email an application. (I'd be surprised if this hasn't already been done.) 

With regard to housing, the Estonian example would suggest to me that if you are dealing with largish businesses, it should be possible to squeeze some efficiencies out of the system. I would suggest, however, that this sort of thing be done carefully. A lot of bureaucracies have already suffered from things like cyber attacks and ransomware. So it won't do to try to do things "on the cheap". Moreover, there needs to be an appreciation that while privacy is important, efficiency and ease of use shouldn't be traded off by a risk-averse bureaucracy which has lost all sense of urgency. 

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One of the more important things our society has been doing over the last few decades is to introduce an appreciation of the need to consider "externalities" in its economic decision-making. This is a type of opportunity cost that involves one type of economic activity being subsidized by a decline in some public good. For example, when a timber company logs a stream bed and destroys a salmon spawning bed the timber companies profits are said to be subsidized by lost income from fishermen. 

This sort of analysis can also happen with regard to social problems. For example, I sat for a short time on the municipal committee tasked with finding a proper site for the casino that Mike Harris had decided to impose on Guelph. At the first meeting, several local charities told us that they refused to accept any money from a proposed casino because they said that a significant amount of the cash would come from people with gambling addictions---who would end up in poverty and cause problems for their entire family. (The rep from the Guelph Police services said that from what they'd heard from other police agencies this was absolutely correct. I've come to the same conclusion as a result of my article on gambling addiction.)

This is where the "triple bottom line" idea comes from. A project shouldn't be pursued unless it:

1. Can make a profit.
2. Can do so without imposing an opportunity cost on the environment that is higher than the profit in part "1".
3. Can do so without imposing a social cost on the human community that is higher than the profit in part "1". 

This principle is easy to understand in theory, but like a lot of economics, becomes very difficult to put into practice. For example, with my hypothetical example of the clear-cut forest and the salmon fishery, how do we measure the cost to the fishery? Should we limit the lost income to just the lifetime of the existing fishermen? Or should we include all the future generations of fishermen that cannot fish? If we do include the children's, children's, children---what about the cultural impact? If a vibrant local community of First Nation fishers gets destroyed because the fishery goes under, does that mean that the cost includes generations of people ending up with alcohol abuse and welfare dependency? 

Housing is something of a special case for the triple bottom line because one of the issues that is traditionally considered an "externality" (the impact on society), can and should be part of the "profit" section. That is to say, providing housing is actually a public good. This means that if society decides to not build an apartment tower because of fears that it may destroy habitat for the Jefferson salamander, not only do the developers not make a profit, workers and the local economy don't get money to build it, and, people who don't have a home cannot live there: protecting one part of the triple bottom line damages the other two.   

At this point municipalities who are in favour of the triple bottom line are on the horns of a dilemma. Do they treat each leg of this-three legged stool as something that needs to be considered and assign trade-offs that best address the concerns of each of the three concerns? Or do they see the process is one of achieving a consensus with profit, the environment, and, social issues each having an absolute veto? 

The problem with allowing a salamander the right to veto all potential housing in the city or province is that not building enough housing has a significant opportunity cost---namely that housing sky-rockets in price and lower-income people get hammered into poverty as a higher and higher percentage of their income goes into providing housing. 

Another complexity comes from the fact that some things are just going to happen in our society, whether people like it or not. One example that comes to mind is the Hanlon Creek Business Park. It was a very nice piece of unused land that had a trout stream and an old farmer's woodlot. Since the property was next to the Hanlon expressway and close to the 401 highway, it was also a very nice piece of premium property for the city to zone industrial and advertise to bring new businesses into the city.

The city went to a great deal of effort to minimize the environmental impact of this development. Take a look at the following map that suggests how much thought went into this effort.

To see more detail, click on the image. Graphic c/o City of Guelph.

 

Compared to what would have happened in the past, this was an amazing amount of careful work aimed at fulfilling the environmental demands of the triple bottom line. It should be remembered that all of this was done even though the property wasn't especially important from an ecological point of view. If memory serves from both past research and direct observation of the land, the small woods wasn't "old growth" because it had been selectively logged by the previous owner---which would have changed the composition of the trees populating the site. The trout stream was already under stress from things like illegal off-roading. The preparation for the business park actually aimed to not only protect the stream but to also remediate damage that had already been done. The rest of the property were over-grown farmer's fields with things like feral apple trees along old fence lines that had been "land banked" by speculators for several decades .  

But even that wasn't enough to satisfy everyone and a significant opposition movement mobilized against the project. While the city was eventually successful and businesses are now working in the area, the protests cost the city a lot of money and politicians ended up eating a lot of grief. 

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This raises a fourth way to protect housing development from red tape. Currently there are complaints about a huge backlog in appeals that have been sent to the Ontario Land Tribunal (the successor to the Ontario Municipal Board). The argument in the Task Force recommendations is that it needs to be harder to lodge complaints and there need to be significant penalties if the Tribunal decides that the complaints are frivolous or designed to cause delay. 

This raises an important point for a democratic society. If people don't like the policies of their government they have the option of voting for someone else. But what if the majority of people want things that are objectively unfair to a minority? That's why we separate the legal system from politics. That way a judge can look at the objective facts of a situation and decided whether or not the government of the day is following the law or just making stuff up as they go along. In addition, if they can also look at the law itself and decided whether or not it conforms with the constitutional values (ie: the Bill of Rights) that society has set above the law. 

All well and good, but people need to realize that there is a big difference between voting in an election and taking the government to court (or the Ontario Land Tribunal). That's because there are two significant opportunity costs involved in going before the legal system: it is hideously expensive, and, takes a long time. As I've pointed out above, delays and added expenses add significant amounts of money to the rent or cost of buying a home. To that end, it's important that society assign a real cost to accessing the legal system---or else people will just clog the courts.

As a matter of fact, just hiring a lawyer and going before a judge is generally sufficiently onerous to keep most sane individuals out of the court house. But a group of individuals sometimes get so incensed by a state of affairs that they band together, hire a lawyer, and, take on the "powers and principalities". The point is to balance the cost involved to participate so that it is high enough to discourage frivolous suits while not keeping out people with legitimate complaints. 

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I have myself been the plaintiff in one of these lawsuits. As part of a group of Guelph's religious leaders, I sued Walmart as an action aimed at protecting the Saint Ignatius Retreat Centre. We did this because the St. Ignatius property serves an important function for a great many religious organizations in the city---including Protestants, Buddhists, Hindus, Sufis, First Nations, etc. I won't go too far into the details except to say that this wasn't done lightly because the law we were using cannot be used by incorporated groups, which means that I could be held liable for court costs. And at a preliminary hearing I was ruled against and told to pay (if memory serves) something like $6,000 for a 15 minute session in front of a Divisional Court Judge. 

After that event our group set out to raise money for a legal defense fund. This was successful and we raised over $60,000 in a week. As the case developed, Walmart agreed to mediation with a judge from the Ontario Municipal Board acting as the "go between". I well remember him warning me that if the case went against me I would lose my house, all my savings, and, have my income garnished if I lost. (Eventually, we settled out of court and Walmart ended-up paying all the court costs plus a significant settlement to St. Ignatius.)        

I'd like to point out what I consider the salient points in the above story. First, the risks that were undertaken were significant, so it was obvious to all and sundry that the people involved were dead serious about the issue. Secondly, the people behind this action were important leaders of Guelph's spiritual community. Third, we had obvious community support because we were able to build a significant legal defense "war chest" in short order. 

In retrospect I wonder if I would have done this sort of thing again. Possibly not. I'm married now and wouldn't want to risk my wife's financial security. But having said that, I think that I got the calculus right about balancing the value to the community versus the personal risk I was running. St. Ignatius is still there, and the settlement it received probably has a great deal to do with that fact. 

Enough blowing my own horn---. 

It's important to allow people to have access to appeals, but there has to be such a high bar to doing so to prevent most projects getting drowned in appeals to the Land Use Tribunal. This could be done in a variety of ways, but I'm not going to get into them because this is a technical subject that will be settled by lawyers, not the citizenry. 

 

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I think though, that there is yet another issue that bleeds out of the above. One thing I've been really concerned about with both the COVID pandemic and the Ukrainian war is what seems to be a permanent "contrarian" constituency. By this, I mean people who seem to be opposed to stuff just for the sake of being opposed. This isn't to say that they don't have their reasons---it's just that when they state them they generally don't have anything approaching a logical reason or real evidence for being so inclined. And yet, they are very emotionally invested in ideas like the vaccines are dangerous and Putin has a right to invade Ukraine. 

 

My working hypothesis is that there is a significant fraction of the population that is very angry and upset about society and the economy. They want something different---maybe something better than capitalism, perhaps something more like the Olde Tyme religion of their youth. I've written about the danger of nostalgia, but I also think that there is a danger to contrarianism just for the sake of being contrary. Sometimes the business people and government are right---or at least less than totally wrong. I think the housing crisis is one of these---perhaps very rare---situations. The Task Force thinks that the biggest problem is supply, and ordinary citizens who don't want their neighbourhoods to change are preventing the new construction we desperately need. 

 

Of course, there are ways that new housing could be built either better or worse. Indeed, several of the suggestions from the Task Force were especially of interest to me: 

• finding land in the yellow belt 
• building the missing middle 
• getting rid of the two stair rule in small apartment buildings
• rethinking mandatory parking
• allowing larger mass timber buildings

These are not recommendations that I think will find favour with with the existing development industry. After all, these people have made their fortunes building suburban sprawl based on single-family homes. If discussion of housing continues to be dominated by NIMBYs fighting tooth and nail against all change, I fear that the conversation will be settled without significant public input, and these extremely positive suggestions will get left in the dust---leaving nothing but a heavy-handed provincial regime that allows the existing development community to build more suburban sprawl with the odd sacrifice zone choked with apartment towers. 

 

My suggestion to the community is to make the effort to research and try to understand the housing crisis from the point of view of people who don't already own their own homes and honestly face up to the complex, difficult choices that have to be made. Don't dismiss other people's problems with cheap shots about greedy landlords, money laundering, or, the need for federal subsidies. Democracy isn't about always getting your own way, or, being able vent your emotions. It requires citizens to educate themselves about the issues and to try to put themselves in the shoes of everyone else. There are a lot worse things to suffer through than having to see an apartment tower rise up in your neighbourhood.    

 

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Moreover I say unto you, the Climate Emergency must be dealt with!

Housing Revisited: Report of the Ontario Housing Affordability Task Force, Part One

A couple weeks ago the Ontario government released The Report of the Housing Affordability Task Force. As the chair of the task force, Jake Lawrence, described in the cover letter; the mandate it followed was to come up with practical solutions to the housing crisis:

Jake Lawrence

When striking the Housing Affordability Task Force, you and Premier Ford were clear: you wanted actionable, concrete solutions to help Ontarians and there was no time to waste. You asked us to be bold and gave us the freedom and independence to develop our recommendations.

This bears emphasis because when I talk about housing issues with my friends and neighbours---all of whom already own their own homes---I hear a lot of airy-fairy suggestions that I think wouldn't go anywhere. These include:

• ending money-laundering (that's the federal government's jurisdiction and something of a game of whack-a-mole anyway)
• stopping the rise in population (that's a great idea---except that both these people and myself are usually also in favour of allowing more immigration---like the Ukrainian refugees already on their way here)
• having the federal and provincial government drive dump truck loads of money into Guelph to build more social housing (good luck with that!)
• Make the rich pay!!!!! (except the rich usually seem to be very good---for one reason or another---at not paying)
• stop allowing people to change apartments into Air BNBs (that wouldn't have much effect except in tourist zones---and enforcement would be a huge pain)
• raising interest rates (that would cause problems for the entire economy)
• financial subsidies for first-time home buyers, like writing-off mortgage payments on your income tax (the US does this, and it doesn't help anyone because the savings just go into pushing up housing prices even higher)
• reform the bureaucracy to speed up the approval process for new housing
  

Here's a video clip from a TVO show where a past governor of the Bank of Canada---and member of the Housing Affordability Task Force---Stephen Poloz, explains what he thinks is really behind the high cost of housing in Ontario. 

It appears that he puts most of the blame on local government. This is the same thing that I've heard time and time again from other experts---municipal councils give far too much power to small groups of local citizens to block developers from building new housing.

If something happens in one community, it might make sense to blame the municipal government. But if it happens all over North America and much of the world beyond, I'd say that there is a bigger issue at play. So if I'm going to blame Guelph's Council for anything, it's a timidity that has kept it from thinking "outside of the box". But as someone who always thinks this way---and was profoundly unsuccessful as a politician---I suspect that the real problem comes down to a few things that are common almost everywhere:

• most people don't vote in municipal elections
• the few who do overwhelmingly already own their own homes
• conversely, people who don't own a place----even if they would like to some day, usually don't vote
• similarly, people who live in a neighbourhood and want to keep it the same will show up at Council meetings---and those who might eventually buy some new housing in that area won't
• retirees (like me) generally have more time to be involved in these sorts of things---and they also tend to the most adverse to change
  

What this means is that there is a conflict of interest in our democratic system that discriminates against potential new home owners plus a system that results in almost no one advocating on their behalf.

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This particular article has been an especial slog for me. Probably because I feel that advocating for people who are suffering from the high price of real estate is such a thankless task, I've found wading through these complex issues really hard to do, even though none of this is new to me. That's just to say that even though I am interested in the subject, a lot of writing these articles is plain hard work. If you think that it's worthwhile and you can afford it, why not support it with a subscription? Patreon and PayPal make it easy to do.
 

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The best way to understand the report's recommendations is to break them down into several different operational categories:

• accurately assess the needs and options for creating housing
  
• re-order the priorities of city council
• take away some key powers from municipalities and give them to the province
• change rules that have gotten in the way of building affordable housing 
• create regulations and penalties that will force municipalities to "get with the program"
• cut the "red tape" that strangles new development
  

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First off, the report points out that in the past both the province and municipalities have badly under-estimated the rising demand for housing. The shortfall has been identified as coming mostly from increased permanent and temporary immigration from both outside of the country and from other provinces. (I discussed this in a previous article.)  

Secondly, most discussions about development have been around the preservation of farmland and water recharge areas. (Doug Ford famously promised the development community that if elected, he'd unravel the Green Belt legislation brought in by previous Liberal governments.) The Task Force side-steps this issue by suggesting that there is already plenty of room to build new housing in low-density suburbs.
 

The recommendations of the task force aimed at these specific parts of the problem are:

• commit to building 1.5 million new homes in ten years
• "Amend the Planning Act, Provincial Policy
  Statement, and Growth Plans to set “growth in the
  full spectrum of housing supply” and “intensification
  within existing built-up areas” of municipalities as
  the most important residential housing priorities in
  the mandate and purpose."
  

I've quoted number "2" in full because it raises an important point. If you look at the current official plan of Guelph, you will see the following statement of goals for the document:

The Official Plan:
a) Establishes a vision, guiding principles, strategic goals, objectives and policies to manage future land use patterns that have a positive effect on the social, economic, cultural and natural environment of the city.
b) Promotes long-term community sustainability and embodies policies and actions that aim to simultaneously achieve social well-being, economic vitality, cultural conservation and enhancement, environmental integrity and energy sustainability.
c) Promotes the public interest in the future development of the city and provides a comprehensive land use policy basis which will be implemented through the Zoning By-law and other land use controls.
d) Guides decision making and community building to the year 2031

As you can see, nowhere in the above statement is there a direct statement that it is a goal of the city to provide adequate housing for all the citizens. 

There's a saying in science to the effect that you can't understand something until you measure it. Well, a somewhat similar thing could be said about governance: if you don't mention it directly, it won't be a priority. Guelph has never made growth in the housing supply or increasing the density of housing into priorities, which means that it has always been "traded off" for other considerations that are specifically mentioned in planning documents. Actually putting these two considerations into our planning documents and also defining them as the top priorities of planning---even ahead of things like creating enough parks, protecting heritage architecture, or, preserving a neighbourhood's "traditional character"---would go a long way to really dealing with the current housing crisis.

The report also makes the case that there already is lots of land to build housing on in Ontario municipalities---it's just been locked-up through exclusionary zoning that restricts it to only single, fully-detached housing. As a result, the population density in our cities is far, far less than that seen in other major cities of the world. Take a look at the following graphic that I've copied from the document.

I've mentioned this issue in previous posts on this subject. But it really does need to be hammered home because almost all of the people I meet simply refuse to admit that this is a real problem. So here's a short explanation of the "yellow belt" in Toronto and where all the land the Task Force says could be used to build the housing needed to end the current crisis.

 

The Task Force is focusing on the issue of building housing stock to lower the cost of living. But there is another side to this issue that also should be mentioned. Low density housing is tremendously expensive for cities to service. In fact, most experts would suggest that in most cases it can only exist because older, higher-density neighbourhoods subsidize them. Here's an excellent video from the YouTube channel Not Just Bikes that explains this issue while talking about a variety of cities---including Guelph.

 

Please note that while the creator of this video is lauding Guelph for building enough higher density housing to keep the city from bankrupting itself, this doesn't mean that it is building enough to keep all it's citizens housed. These are two different issues. Guelph may have enough higher density housing to successfully subsidize its huge swathes of low-density housing, but if we had much more, we might also be able to supply affordable housing to most of the people who want to live here. People have a bias towards thinking in either/or dichotomies---but the universe usually works with percentages. 

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OK, then. How does the Affordability Task Force think that cities like Guelph can increase the density of its housing? 

 

One phrase that they use a fair amount is "as of right". That's a fancy, legal way of saying that they are resetting the "default" of planning. What is now a special case that you have to argue in front of Council or appeal to the Planning Appeal Tribunal (what used to be called the OMB), would be assumed OK "from the get go". The Ontario Housing Affordability Task Force Report identifies a series of different planning decisions that should be considered standard operating procedures across the province from now on:

• building a fourplex of up to four stories on any given single lot
• converting commercial properties to housing
• allowing things like "granny flats" 
• allowing multi-tenant housing (ie: no laws against renting rooms)
• allowing 6 to 11 story buildings with no minimum parking requirement on any existing transit corridor 
• support municipalities to ensure that any greenfield development---both within and outside of existing municipal boundaries---to ensure that it adheres to the same density requirements identified in this report
  

In effect, the Task Force realizes that municipal politics has made increasing a city's density into a "kiss of death". Since it is political suicide to advocate for it, no one on Council wants to support it anywhere. The solution proposed simply takes away the power to veto development that would raise density from the hands of local government. With the power diffused over the entire province, the hope is that no provincial government will be afraid of a local backlash against building more housing in any particular neighbourhood.
 
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Another issue that stands in the way of building more housing are a variety of building code and other rules that have refused to "keep up" with the latest technology and social trends. What they do is artificially inflate the cost of building housing without actually improving the safety or value of the home. 

 

To understand this point, consider the following housing requirements that the Task Force suggests should be changed to allow:

• a single set of stairs in an apartment building
• wooden multi-story apartment buildings
• housing without dedicated parking spaces

The first recommendation deals with a section of the building code that mandates that apartments must have a two separate, closed-off sets of stairs on opposite sides of the building. The reasoning has been that by doing so, the individual units are protected from air intake that would feed a fire, and, give occupants a second option if one of the stairwells is impassable because of the fire.

The problem with this law is that the second set of stairs are an added expense. 

 

Enclosing and separating the stairs from the aisles also removes the potential to use natural ventilation and lighting for the corridors outside of apartments. Take a look at a European apartment stairwell. (Single stairwells are the standard in Europe.) If you add a skylight and cupola on the top of the central stairwell, then light will stream down, and, hot air can exit the top. If tenants open the doors of their apartments (or a vent at the top of their doors) then hot air will get drawn out of their unit and cooler air will come in through open windows (because of the "chimney effect")---increasing ventilation and reducing air conditioning costs.

A Paris apartment building stairwell. Image c/o The Urbanist.

While it's true that the two stairs code was designed to save lives, modern construction techniques (no more hollow plaster and lathe walls, fire resistant solid flooring, etc) plus requirements for mandatory smoke detectors and sprinklers have pretty much removed any reason for this old rule---at least for mid-sized and smaller apartment buildings.

   

A second recommendation is to allow builders across the province the option of building small apartment buildings with modern wooden construction methods instead of forcing them to exclusively use reinforced concrete. I did a quick non-scientific survey of statements wood versus concrete construction, and noticed what seemed to be a great deal of motivated reasoning that seemed to based on which side of the industry was paying the bills. (Could this be why it's taken so long to reform the building code?)

 

After winnowing through the chaff, it seems to me that the key issues to understand are that a new technology has emerged using something called "mass timber" construction for small apartment buildings. This uses "cross-laminated timber" to replace slabs and beams of reinforced concrete or steel.

Cross-laminated timber floor slab being lowered onto beams made from the same material. Image c/o Think Wood.

As you can see from the above picture, the slabs of wood are much bigger and thicker than the two-by-fours most people see in single family homes. This makes them much more resistant to fire.
 

As near as I can tell, the wood itself is not cheaper than either steel or reinforced concrete. What it is, however, is lighter---which helps cut construction costs. It also seems to be easier to work with, which means that labour costs and speed of build are better. This is where wood cuts costs. Moreover, as a renewable resource, mass timber construction is less carbon intensive than traditional methods.

 

There are already quite a few examples of successful mass timber constructed buildings, such as the 2016 T3 (Timber, Technology, Transit) building in Minneapolis below. It's a seven story office building and was constructed over just 2.5 months and used half the construction labour of a comparable reinforced steel building.  

 

The T3 building in Minneapolis. Image c/o Think Wood.

Finally, as I pointed out in a past article, using the numbers provided by an expert in the field---Donald Shoup---plus Guelph's then current parking regulations, underground parking in apartments and condominiums adds something like $75,000 to the cost of each housing unit. If developers were able to stop automatically adding expensive parking to a building---whether it is needed by tenants or not---it could result in real savings for both home buyers and renters. 

 

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Finally, in any attempt to deal with an existing problem it's important to not only change the rules, but to also provide for enforcement. There are lots of examples where governments brought in really good rules to deal with a substantive issue but they were simply ignored and this dramatically reduced their effectiveness. (If you want to check out one example, take a look at this depressing story I wrote about solid waste.) The housing emergency is too important to the well-being of this nation to come up with a good-sounding strategy that just gets sabotaged in implementation.  

 

To that end, there are a series of recommendations from the Task Force aimed at ensuring minimal sabotage to government programs based on it's recommendations:

• if a municipality hasn't raised density levels to provincial minimums within 2 years, the province will allow unlimited height and density next to major transit stations (think about the proposed tower on Wyndham St. across from  the Guelph police station)

If Guelph didn't have it's act together vis-a-vis density, it would be forced to accept this building by the province. Image c/o Skyscraper Page.

• force municipalities to change their zoning and plans to ensure the following:

• preserving the character of a neighbourhood would no longer be a priority
• remove site plan approval and public consultation from any development proposal that conforms to the official plan and has 10 or less units
• create province-wide standards with regard to things like lot size, building depth, landscaping, etc---including reducing or eliminating minimum parking requirements
• remove all floor plate restrictions on towers to allow for the creation of more efficient high-density housing
  

• stop municipalities from having more public meetings on a project beyond those required under the provincial Planning Act 
• force municipalities to allow digital participation in public consultation
• force municipalities to delegate decision-making vis-a-vis site plan approvals and minor variances to staff
• prohibit municipalities from making bulk listing on city heritage homes listings and retroactively declaring a home as being "heritage" after a development listing has been filed. In addition, any home owner who has had their property designated as being preserved for historical reasons should be compensated at the fair market rate for loss of revenue.
• restore the right of developers to appeal municipal plans and Municipal Comprehensive Reviews 

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This pig of an article is already longer than most of my readers will probably like, so I'm going to take a pause here. In part two I'll deal with more Task Force recommendations---the ones aimed at stream-lining the bureaucracy to let housing get proposed and build without years of studies and consultation. I'll also add my own thoughts about what this all means and what I'm going to be looking for this year in both municipal and provincial elections. 

Until then, cross your fingers and hope that the pandemic is finally winding down. If you can, help support the Ukraine war effort any way you think best. Be nice to each other, we've been going through "interesting times"---and they are never fun. 

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Furthermore I say unto you, the Climate Emergency must be dealt with!

 

Housing Revisited, Part Two: the Housing Crisis---Branch and Root

Four years ago I started a five-part series about housing affordability in Guelph with an article about the rental housing situation. It was pretty popular with readers, so I have been tempted to come back to the problem. But while I've seen evidence that the "powers that be" have become more aware of the issue (it was an issue in the last federal election), I've yet to see much evidence of anyone wanting to deal with the underlying causes---which I tried to document in those articles. But last week the Ontario provincial government finally published a paper that does seem to "get it". Because of that, I've done some rummaging through various other reports and thought I'd do a few posts about it as a way of refreshing my readers about what is really at the root of our present crisis before I talk about this new report.

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Henry David Thoreau, c/o Wiki Media

To quote Henry David Thoreau:

There are a thousand hacking at the branches of evil to one who is striking at the root.

As I see it, I have heard a lot about the branches, leaves, and, stem of our housing crisis from the news, politicians, and, my friends. These would be things like:

• landlords converting units to Air BNB
• offshore investors using real estate as a safe place to park capital
  
• greedy landlords that charge whatever they can get away with
  
• crime bosses laundering ill-gotten gains
• real estate speculators "flipping" houses
• real estate agents that use "blind bidding" to start bidding wars
  

I have no doubt at all that all of the above have some impact on housing costs, but to my way of thinking these aren't causes of high housing prices, they are instead symptoms. As such they are the leaves, branches, and, stem of our housing crisis---but not the roots of it.

If there was a glut of housing in Canada, landlords would have to compete for good tenants---which means they wouldn't rent out units as "party Air BNB"s because that would drive away other hard-to-replace tenants. Nor would offshore investors or the mob be buying housing, because it wouldn't be such a safe investment. Moreover, house flipping wouldn't make any sense because speculators wouldn't be able to count on properties always increasing in value. Finally, with a lot of houses on the market and buyers looking for a deal---instead of just anything they can afford---no one would deal with Real Estate agents who tried to start bidding wars.

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The above are just distractions. The real problem with housing is really simple: there just isn't enough of it being built to service the demand. If there were, then prices wouldn't be exploding all over the country.

I have talked to several city Councillors about this and the answer I get from them was that there's nothing they can do. They all said the only solution would be if the Federal and Provincial governments would shower cities with money to build more social housing. 

Pardon my cynical ears, but I don't believe that's true. I got my first whiff of this when I interviewed a provincial cabinet minister who said that cities could build a lot more housing, but they don't want to because most municipal voters don't want intensification in their neighbourhoods. And, most city Councillors don't want to alienate voters, because they fear that they won't get re-elected. As a result, they refuse to allow developers to build higher density housing in existing suburban sprawl. Excuses get thrown around, but the fact is that if the voters don't want an apartment building in their neighbourhood, politicians won't force them to take it. Since most of the land in our cities---including Guelph---is full of single family, fully-detached homes, this means nowhere near enough housing has been built for decades.  

The result of this endemic political cowardice has been the creation of what are called "yellow belts" (does the colour refer to the cowardice of municipal politicians?) in cities all over North America. If you've never heard of this, take a look at this nifty video from TVO.

 

The Yellow Belt is important to understand. Unfortunately, most people haven't  because they are deep in denial about an issue that was first articulated in my youth: the limits to growth. 

It's a simple idea, really. The human population keeps growing but the earth does not. Of course Canada has a lot of land, but as we all know, most of it is rock, swamp, and, tundra. That means when we do find good land to grow food, it is a really good idea that we don't pave it over to build subdivisions. That's why we have The Green Belt and The Places to Grow Act to limit sprawl. 

Under these two guiding pieces of legislation, the job of Ontario city Councils was clear: they needed to encourage intensification of housing to deal with population increases. Unfortunately, most elected officials and voters responded to this legislation by having a temper tantrum every time someone suggested that they should actually allow an apartment building in an existing subdivision. This meant that the only places any developer could build tended to be in a small number of sacrifice zones (like downtown or along Gordon St. in Guelph), where they would build towers. Even there, developers found so much opposition that they never could build big enough to have the economies of scale necessary to actually push down the price of individual units. 

Developers weren't allowed to build enough housing to actually approach demand, which means that they only build for the well-off who can afford to pay big prices. (After all, if you are only allowed to make and sell ten watches, what are you going to produce, Timex or Rolex?) This leaves lots of demand on the table, which resulted in existing run-down homes being bought and fixed-up by people (like me) who couldn't afford a ridiculously over-priced condo (even if it comes with a granite countertop and stainless steel fridge). This refusal to fix bad zoning resulted not only in no new housing being built for working and middle-class people---it also resulted in old, run-down, cheaper rental housing being taken off the market too. (This is called "gentrification".) That left the poor with fewer and fewer housing options. Gentrification means that the only option left for the poor is the social housing that the province and feds are supposed to provide, but chronically under-fund. (Which is probably why I've had Councillors believe more money from the feds is the only "viable solution" to the housing crisis.)

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I'm really annoyed about the way our society has created this stupid housing mess. If you agree---and you can afford it---why not subscribe? You won't hear this sort of analysis from the mainstream press and if people of good will won't support "alternative" voices, they won't get heard. Patreon and Paypal make it easy to support with small monthly payments.

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When I'm given the time to argue the above case to friends, I often get the response that they don't want Guelph to get any bigger, so why doesn't Council just stop people from moving here? I generally see this as an evasion, simply because I hope that everyone realizes that Council lacks the authority to set up armed check points to keep people out. But it is important to deal with this issue in some detail because the Home Builder's Association has identified this as an important reason why housing has become so expensive. 

Escalating prices always have two causes, supply and demand. The decision of city Councils all over North America to cut supply through idiotic planning has been made much worse because of the dramatic increase in demand that came about because of immigration to Southern Ontario. A report published in 2021 by the Smart Prosperity Institute and titled Baby Needs a New Home: Projecting Ontario's Growing Number of Families and Their Housing Needs points out that

Ontario’s population grew by nearly one million people in the five years between July 1, 2016, and June 30, 2021, after growing by just over 600,000 persons in the previous five years. This dramatically increased the demand for housing, while the rate at which new homes were built stayed virtually unchanged. This increased demand, from young Ontarians that have started to, or would like to start, a family with no change in supply, contributed to rising home prices and a shortage of family-friendly housing across Southern Ontario before the pandemic.

We estimate that 413,753 households should have been formed, but only 349,039 new housing units, of all types, were built over those five years. This difference, of 64,714 households, can be thought of as the supply gap of housing over the period. 

Page iii of Baby Needs a New Home

The impact of population growth came home to me personally last summer. For reasons I won't go into, it appears that in the next few years I am going to have to sell my present home and purchase a new one. Looking at the cost of housing in Guelph, it seems clear  to me that I cannot afford as nice a place as I presently have---let alone one a little bit bigger. (My wife is now living with me and we both agree a little more room would be nice.)

With the above in mind, last summer we were looking at communities in Ontario where we could afford to live. We had a couple design criteria in mind---namely we want some place where we can live without a car, so public transit and a Via Rail station are mandatory. What we found that seemed to be within our means were Windsor, Brockville, and, Cornwall. 

I suspected that the reason why these cities/towns seemed relatively affordable was because they are too far from Toronto to commute and are not doing too well economically---so most people don't want move there. I had these ideas confirmed by Baby Needs a New Home because it gives a population break-down for just about every community in Ontario. Here're the stats from Baby plus the most recent census data from 2021. (I couldn't find 2021 data for Brockville, so I left it out.)

• City:  Population by 2001: & 2021: Percentage of change
  
• Cornwall:   47,462 & 47,845 increase of .8%
• Windsor: 218,222 & 229,660 increase of 5%
• Guelph: 110,819 & 143,740 increase of 30%

(Gee, I wonder why housing prices have gone berzerk in Guelph?)

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This raises the question of just exactly who are these people who want to move here? Look at the following bar graph. 

From Baby Needs A New Home, by the Smart Prosperity Institute

As you can see, there has been a substantial acceleration in Ontario's population growth starting in 2016. The blue parts of the graph could show internal factors---births and people moving here from other provinces. There is an increase, but not huge. There also seems to be a similarly small increase in immigration, as the orange parts of the bar. What really stands out, however, are the beige parts that are described as "non-permanent residents".

The report suggests that most of these people are foreign students who have been allowed to stay a bit longer in Canada to continue work because of some relatively new legislation. These people also need places to live, so they too are competing with other people for living space. 

Baby Needs a New Home  identifies the Post-Graduation Work Permit Program (PGWPP) as the main culprit behind the increase in demand. (I'm not entirely sure if this makes sense, but since this is peripheral to the issue of this article, I'll just take it at face value.) In a nutshell, it is a program that allows students who are taking full time study at a Canadian educational institution the option of working after graduation in order to gain in-Canada experience while they are applying to get a work permit in Canada. 

Let's give a hypothetical example. Someone from another country gets into a Canadian graduate program in engineering. This is good news for universities, because he gets money from a corporation that wants him to research something for them---and the university gets bucks from the grant to fund their labs. While working here, this guy decides that he likes the place, so he applies to immigrate or at least work here for a while. Unfortunately, it's hard for immigrants looking for a job to get credit for experience outside of Canada, though. So this program allows people who've already applied for residency, and who've just graduated from a Canadian school, to work immediately after graduation so they can get Canadian work experience. This means that no one will "make strange" at their credentials and work experience and companies can get the really skilled, top-notch employees they need to be successful.

The federal government considers this a "win" for the country, because the Canadian economy benefits from the skilled workers it can poach from other nations. The only problem is, however, that this new slug of immigrants need to have housing, and the province and municipalities didn't take this influx of new people into account when planning new housing developments. As a result, they've dramatically under-estimated the growth in need---when they were already failing to provide enough for the existing sources of growth. The result is "another fine mess" that we have gotten ourselves into!

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Speaking of "fine messes", as I was writing today, I heard that the Prime Minister is going to invoke the Emergency Measures legislation. This effectively puts the nation under martial law and allows him to order whatever he needs to do to end this pandemic of blockades and occupations. From what I can see, it needs to be done. I have to admit that I'm more than a little freaked-out by the level of support that these anti-vaxx yahoos are getting. But it does seem to me that the vast majority of Canadians are against them, and will support our elected officials if they have to get tough. 

Maybe when the dust clears and we have a better idea of what is really going on, I'll write an article on the subject. Until then, try not to get too upset about what is going on. I recommend a good comedy---.

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Moreover I say unto you, the Climate Emergency must be dealt with!