Ontario must be decisive on housing reform, says C.D. Howe

Meeting affordability task force's proposals will be politically tough but necessary, says policy expert

Ontario must be decisive on housing reform, says C.D. Howe

The government of Ontario has to be firm in enacting reforms to fight soaring housing costs in the province – and it won’t be easy.

That’s what Benjamin Dachis, Associate Vice-President of Public Affairs at the C.D. Howe Institute, said in a recent commentary.

Dachis cited the final report published by the Ontario Housing Affordability Task Force on February 8. The product of two months of consultation and research, the report proposes radical reforms to increase housing supply.

“The debate on why housing costs are so high is settled. Study after study shows supply restrictions are behind the price rises,” he said. He referred to on study by C.D. Howe, which concluded that delays and extra costs add hundreds of thousands of dollars to the cost of a home.

He cited a previous effort to boost housing supply in 2019, which included Housing Supply Action Plan as well as a first round of legislative and regulatory adjustments, was received negatively by many local governments. Dachis, who worked in the government at the time and was involved in the design of some of those adjustments, said that many local governments responded poorly, and some of the modifications were later reversed.

“Now, the government will need to respond to the task force’s high benchmark for change with even more ambitious reforms,” Dachis said. “It will not be politically easy.”

While many young Ontarians and their families will want more housing supply and better affordability, Dachis said residents also don’t want their neighbourhood to be affected by construction of additional homes. Because local councillors favour local voters, they tend to oppose deeper reforms that could expand home supply.

One of the task force’s most divisive, but also most effective proposals, would allow up to four units per lot in all residential regions of the province. This would eliminate the requirement for a developer to go through a lengthy process of community input before receiving government approval to build such a structure. According to Dachis, the suggested adjustment by the task group would reduce a lot of the risk that developers would have to assume today if they proposed such a structure.

Local officials have already expressed their displeasure with the task force's suggestions, claiming that they will violate their zoning authority. He expects the Minister of Municipal Affairs and Housing will be summoned by local councils and mayors, who will also contact their MPPs. The government will make every effort to appease.

“If the province goes too far in appeasing local governments, say by making zoning reforms optional, the rest of the plan carries no weight,” Dachis said. “Cities across the province will likely reject changes if given the option. And if it’s a unified opposition from the municipal sector, it will make any further action hard.”

Dachis called for the provincial government to set out clear parameters for which zoning reforms will be mandatory for cities to implement. The government must also acknowledge that any zoning changes will have the immediate effect of slowing down development, he added, arguing that such short-term costs could overshadow the long-term advantages if the provincial adjustments aren't aggressive enough.

“Ontarians need to know there’s no other government coming to the rescue on housing affordability,” Dachis said. “If the province doesn’t act, the federal government cannot fix the housing crisis. And neither can cities if the rules that govern planning don’t change.”