The post-pandemic future: Inclusionary zoning can help fix the housing crisis
Mitchell Cohen is president of the Daniels Corporation
Since Covid hit, millions of people in Ontario have lost their jobs: artists and freelancers whose contracts and gigs have dried up; hospitality and retail employees whose workplaces are closed; office workers who’ve been laid off. The pandemic has slammed the door on their income sources, and as a result, many will face an insurmountable challenge paying their rent when government support comes to an end. The average rent for a one-bedroom apartment in Toronto is more than $2,000—much more than they’ll be able to pay until the economy begins humming again and jobs are reinstated.
The city of Toronto was suffering from a devastating shortage of affordable housing long before Covid arrived; there are currently more than 110,000 people on the wait-list for housing in Toronto, and the pandemic has made that shortage even more critical. There is no mystery how we got here. The federal government made significant cuts to affordable-housing programs in 1984, and cancelled all funding for social housing in 1993. And in 1995 in Ontario, the newly elected Progressive Conservative government cancelled 300 projects comprising 17,000 units of co-op and non-profit housing within days of taking office.
Their rationale was that if government got out of the way, an unfettered free-market system would ensure homes would emerge for people at all income levels. Looking back, it is clear that the theory was out to lunch. Virtually no affordable housing has been built over the past 25 years. As a direct result, the need has grown even more desperate.
If we’ve learned anything, it’s that the private sector will not create affordable housing on their own initiative, or on their own dime. Nor should they. The government of Canada adopted legislation in 2019 enshrining adequate housing for all Canadians as a fundamental human right. Housing is a responsibility that must be shared between government and all sectors of civil society, including private-sector builders and developers. The federal government’s national housing strategy is a powerful commitment to affordable housing for all Canadians, and their pledge to invest more than $55 billion over the next 10 years is a clear indication of responsibility as a primary funding partner.
While funding is one part of the equation, we need a delivery mechanism. And that mechanism is regulation. Inclusionary zoning is a land-use policy tool that provides mixed-income housing where none exists. Along with a menu of readily available government and philanthropic funding opportunities, inclusionary zoning is the only way to solve our affordable-housing problem.
Here’s how the partnership could work. Developers seeking increased density will be required to enter a community benefits agreement wherein 10 per cent of that new density is made available for affordable housing, provided that government and other funding partners are at the table. The 10-per-cent-affordable component would be integrated within the developer’s community and managed by a private non-profit or co-op under an in-perpetuity lease.
The community-benefits agreement would also require the developer to make a cash contribution of up to 15 per cent of the land value of the increased density. Subject to community consultation, this contribution, as well as funding from all levels of government, would enable the creation of an affordable component priced at 80 per cent of average market rents. Additional funding from the philanthropic sector would allow for significantly lower rents.
Inclusionary zoning, coupled with government funding and a consistent community benefits framework, establishes a level playing field for all landowners and developers. With this approach, affordable housing becomes the rule rather than the exception in every development approval, from high-rise towers in the core to suburban subdivisions and everything in between.
It is also essential that the public sector walk the walk by allocating all surplus land to deeply affordable housing. Surplus public lands are public assets and must be leveraged to create stable and affordable housing for our most vulnerable citizens, starting at rent geared to income, all the way up to 80 per cent of market rates. For example, Green P parking lots are hugely underutilized public assets, as are standalone libraries that could be built up with affordable housing on top. The city of Toronto is beginning to rise to that challenge, putting a number of surplus sites on the market. However, it is time to be bold and push boundaries with our public assets, to maximize both the number of affordable homes and the depth of affordability.
The provincial and federal governments need to follow suit with all surplus lands, not as an afterthought, but rather as a first principle. This is especially true at every Metrolinx site the province is considering for development, and for sites along the proposed Ontario Line subway. Affordable housing must be at the top of the agenda for every new transit-oriented community. We can’t expect developers to embrace integration of affordable housing if the public sector isn’t clearly demonstrating leadership.
The city recently completed an extensive consultation process on the idea of inclusionary zoning, and city staff will be drafting an official plan for council consideration later this year. In the meantime, however, there are steps that others could take, all of which foster inclusion and diversity, that open doors and change lives forever.
For example, imagine if every developer in the GTA teamed up with Habitat for Humanity, and delivered homes for Habitat partner families in every new community. At Daniels Corp., our partnership with Habitat has created more than 80 homes so far, with 10 more in the pipeline. With other developers on board, hundreds of deeply affordable ownership homes could be created every year.
And then imagine if every multi-family landlord partnered with Covenant House, Dixon Hall or the YMCA to create deeply affordable homes for young people making the transition from supportive to independent living. The success stories of our Covenant House tenants over the years have been truly heartwarming, adding to a bottom line that goes far deeper than dollars and cents.
Finally, imagine developers and contractors donate their expertise and financial resources to help organizations like L’Arche Canada create supportive living environments for people with intellectual disabilities, or that they help Egale Canada create transitional homes for young people from our LGBTQ communities.
I am optimistic that the pendulum is shifting, and that more business leaders are realizing that affordable housing is a fundamental building block of an inclusive, resilient and successful city. Perhaps the pandemic is the wake-up call we needed to open our eyes, to think and act differently, and to welcome everyone into both our front and backyards. And perhaps, if we do that, thousands of those artists, office workers, hospitality and retail employees will find an affordable place to call home.