Land, Housing & Growth – It’s Complicated

Maybe you saw the recent article, “Blame prices on growth plan, economist says” (Toronto Star, Oct. 14, 2016). Benjamin Tal, deputy chief economist at CIBC World Markets was quoted as saying, “Affordability and Places to Grow cannot coexist.”

I have to point out he was speaking at a meeting of the Building Industry & Land Development Association (BILD). This “leading Canadian economist” went on to say that development charges and slow municipal approvals are contributing to the affordability problem.

Neptis Foundation had already countered this overly simplified view with factual data on October 5 (Land supply not to blame for rising home prices: Study, Toronto Star). 

“Neptis research shows that 80 per cent — 45,660 hectares of the land that has been approved for urbanization in the Greater Toronto Hamilton Region — is still available for building, easily enough to last the region to 2031, and likely well beyond that … let’s get past the argument of land supply — that it is being constrained by our [Ontario’s] policies — because that’s just not true,” according to Neptis executive director Marcy Burchfield.

It seems a little tiresome for the building industry to be harping about government policy more than 10 years after the passage of the original legislation, especially when published research contradicts the argument. BILD could have spent their time more productively by brain storming ideas about how to make housing more affordable – innovative planning, urban design, new construction methods or materials.

BILD’s preferred solution, to allow continued sprawl, just pushes related costs further into the public realm – the need for an expanded power grid, water and sewage infrastructure, roads, and transit at a time when taxpayers are very vocal about tax fatigue.

There are so many factors affecting housing and affordability. It’s complicated. Income inequality is one issue. At one time, one income-earner could raise a family. Now, two income-earners struggle while corporations and the one percent take full advantage of tax avoidance. I heard one report that said 42% of millennials who operate their own business also work at a second job to make ends meet.

Demographics is another issue. Our aging population is growing rapidly and many of these soon-to-be seniors will eventually be selling their homes. Some are pushed into early retirement, many others have no private pension and will be flirting with poverty. A larger proportion of the aged, a prolonged period of slow growth, lower productivity, shrinking incomes, and greater use of robotics, may yet affect ‘affordability’. Like I said, it’s complicated.