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Can a zoning ‘revolution’ save Canada from a housing crisis?

Click to play video: 'Kelowna becomes sixth Canadian city to receive millions of federal dollars to speed up home construction'
Kelowna becomes sixth Canadian city to receive millions of federal dollars to speed up home construction
A big boost today for the City of Kelowna and its desperate efforts to build more homes in the wake of the ongoing housing crisis. Canada's housing minister today announcing millions of dollars through its Housing Accelerator Fund -- designed to speed up home construction. As Klaudia Van Emmerik reports, Kelowna is the first B.C. city to receive the funds, with the minister saying the Central Okanagan city was an easy choice. – Oct 25, 2023

On Oct. 20, Mississauga Mayor Bonnie Crombie came back from her temporary leave to overrule a previous rejection by city council and allow the building of four-unit housing on low-rise residential lots.

The move not only kept Mississauga in the running for a federal housing grant, but it also added the city to the growing list of municipalities around Canada pushing through massive zoning changes to address Canada’s housing crisis.

Since the federal government’s $4-billion Housing Accelerator Fund was launched in May of this year, cities have been rushing to claim the incentives that are tied to zoning changes. In the last few months, the Ontario cities of Brampton, London, Vaughan and Hamilton, as well as Halifax and Kelowna, have all signed agreements with the federal government. Others, like the Ontario cities of Mississauga, Kitchener and Burlington, as well as Calgary, were making significant gains in zoning changes.

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This has led some experts to argue that Canada was witnessing nothing short of a zoning “revolution.” In much of the country, zoning restrictions mean developers are allowed to build only single-family homes or condo towers in residential areas. There is a huge chunk of housing options, often referred to as “missing middle housing,” that does not get built.

“It’s been really fascinating to watch how quickly that’s happened after almost 50 years of that (single-family) zoning being locked in place,” Carolyn Whitzman, a housing policy expert and expert advisor to the Housing Assessment Resource Tools Project, told Global News this week.

Whitzman said cities around Canada are beginning to realize that single-family zoning is not only serving them poorly but is exacerbating the housing crisis.

“Zoning came in in the 1920s, so it has a century of use in Canada,” she said. “They were made much stricter in terms of suburban redevelopment from about the 1960s and 1970s onward. So now, you’re talking about one or two generations that really can’t imagine any other (kind of) development happening.”

James McKellar, professor emeritus of real estate and infrastructure at York University’s Schulich School of Business, said Canadian cities need to adapt zoning rules to allow for housing that better meets the needs of Canada’s population.

“We just can’t afford this kind of single-family housing. But more importantly, it doesn’t satisfy a growing part of the market as people age,” he recently told Global News, adding that for an aging population looking to downsize, the current housing market is not well suited.

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“The choice is (between) a 2,000-square-feet house or a 650-square-feet condo.”

Click to play video: 'New zoning bylaw paves way for more multi-unit housing in Edmonton'
New zoning bylaw paves way for more multi-unit housing in Edmonton

What's spurring zoning changes now

Part of the reason many cities are accelerating the pace of change is the federal government’s Housing Accelerator Fund. The federal government is pushing municipalities to make rapid zoning changes. This includes pushing municipalities to build more fourplex and mixed housing units. 

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“A lot of people don’t realize, one of the reasons that certain communities in this country don’t have enough homes is because it’s literally illegal to build the kinds of homes that people could live in,” housing minister Sean Fraser said in Brampton last week. 

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While Whitzman agrees that the federal government’s housing fund is contributing to these rapid changes, she said in some cities the conversation has been going on for much longer.

“The latest win for people who want more well-located affordable housing is in Edmonton,” she said.

On Monday, Edmonton City Council passed a new sweeping bylaw that would allow density in the city to boom. The changes will now allow residents of Edmonton to build up to three storeys in residential buildings in all neighbourhoods across the city.

Yash Bhandari, a housing advocate with the group Grow Together Edmonton, said: “We were working for months on this, reaching out to a ton of groups that normally aren’t really franchised with our current approach to municipal governance, reaching out to immigrant groups, reaching out to student groups, reaching out to folks for whom it was hard to go to city council on a weekday at 9:30 a.m.”

In the end, city council heard from hundreds of people. The new laws are expected to shape Edmonton for the decades to come, as many are concerned that suburban spawl is causing harm to the city. A 2014 report that looked at the Edmonton suburb of Decoteau as a case study showed that at no point in the next 50 years will the projected revenues from the suburb match projected city costs if the sprawl of single-family homes continues.

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This is because single-family sprawl is expensive. It costs much more to lay down utilities such as pipes and powerlines in sprawled-out neighbourhoods than in denser ones.

Similar changes are taking place all over the country. In Calgary, city council approved a plan for rezoning the city to allow for more housing types last month. The mayors of both Kitchener and Guelph in Ontario have touted building more fourplexes as a solution to their housing problems. Of the big cities, Toronto and Vancouver have both changed zoning rules this year and will permit the building of more fourplexes and “missing middle” housing.

But Whitzman said one major Canadian city continues to be a laggard.

“I haven’t heard a thing from the city of Ottawa, which worries me. It’s the city I live in,” she said.

Dean Tester, housing advocate and co-founder of the group Make Housing Affordable, said Ottawa’s zoning bylaws are more than 20 years old and a policy paralysis in council is preventing it from upgrading.

“It’s illegal to build apartments on the vast majority of land in our city. It’s illegal to build multi-unit housing almost everywhere in our city,” Tester said.

“Where it is legal, it is extremely difficult. We’ve got floor space index restrictions, we’ve got parking requirements, we’ve got height restrictions, we’ve got setback requirements. And where it is allowed and possible, it’s extremely expensive,” he said.

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Click to play video: 'Could ‘fourplexes’ solve Canada’s housing crisis?'
Could ‘fourplexes’ solve Canada’s housing crisis?

Tester said cities like Ottawa may be resistant to change, because the municipal process keeps young stakeholders out of the system. As a result, he said, voices advocating for the status quo get a bigger platform.

“Ottawa’s planning committee meeting is at 9:30 a.m. on a Wednesday. It’s the same time every week,” he said. How many young professionals, young families, people who have to go to a job and make a living, do you think can actually show up for one of these meetings?”

Ottawa also has a massive problem with vacant residential land. According to a StatCan report released on Wednesday, Ottawa-Gatineau has the highest quantity of vacant residential land in the country, both in terms of proportion (18 per cent) and overall area (162,000 acres). The bulk of the vacant land in Ottawa, nearly 76 per cent, is located in the downtown core. Edmonton, too, had a high percentage of vacant residential lots in the downtown area at nearly 34 per cent.

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However, Tester said he hopes the Housing Accelerator Fund and the provincial government’s Building Faster Fund will give some impetus to the city.

“There’s the Housing Accelerator Fund, which is pushing cities to legalize at a minimum four units per lot. Ottawa has put in an application if they want to access that money, which is going to be over $150 million for Ottawa. They need to do something. They can’t just ask for a handout. They need to actually take action.”

But experts say zoning is only part of the puzzle. Keeping construction costs low and plugging labour gaps will also be key. Of the major cities, Toronto saw the highest jump in construction costs, with the city seeing a 74 per cent increase in construction costs between 2010 and 2022, according to Statistics Canada. Ottawa-Gatineau, with nearly 70 per cent, and Edmonton, at over 62 per cent, also saw significant increases in construction costs. 

Click to play video: 'Edmonton’s new zoning bylaw allowing more infill passes at city council'
Edmonton’s new zoning bylaw allowing more infill passes at city council

Supply chain disruptions caused by COVID-19 were among the reasons cited in the StatCan report.

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The report said that between 2010 and 2022, employment in the construction sector also rose quite steadily. The rate of employment rose fastest in Ontario (over 43 per cent) and Quebec (nearly 27 per cent). However, despite the increase in job vacancy rates, wages in the construction sector have not kept up, the report said.

Some experts believe zoning changes will also need to be accompanied by changes in the way Canadians commute. On Monday, the Canadian Urban Transit Association released a report that also urged all levels of government to integrate housing and transit policies.

Whitzman agrees that zoning changes alone will not be enough. But she said the Housing Accelerator fund had started a conversation between the federal government and the municipalities. Zoning is no longer just a niche conversation taking place in policy circles. It is now part of the national conversation.

“Anything that creates bilateral agreements between different levels of government is good, because you need all three levels of government singing from the same songbook,” she said.

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