At Toronto's last Planning and Housing Committee meeting, Chair of the Committee and long-time Councillor for Parkdale-High Park, Gord Perks, followed deputations with an impromptu speech highlighting the achievements of the Committee over the last year or so in making a renewed commitment to publicly-owned land being used for affordable social housing.
The speech honed in on how the advances were achieved despite a housing development market hinged on investor funded growth, which, as Perks lamented, has led to "a glut of little shoebox units right on the top floors of condominiums that were never intended to house anybody but were intended as a commodity" — a truth Torontonians know all too well.
Perks argued that it is this mechanism of Toronto's development industry that has limited the creation of the type of housing the City needs. He also used the opportunity to dismiss arguments that zoning by-laws, fees and fines, and a"robust" public consultation process are barriers to housing, calling the claims "utterly, utterly false."
But during the very deputations that proceeded the speech, HousingNowTO Technical Lead Mark Richardson explained how per-unit costs for studios have reached well over $600,000 at 11 Brock Avenue — a City-led affordable housing development — due to what he described as constraining zoning by-laws.
"It was a constrained site, similar to the one you just approved over at 35 Bellevue," Richardson said. "You're constrained on your height, you're constrained on your density, you're constrained on what you can do on those sites by existing city policies. We've always said about [Brock and Bellevue] they should be blank slates [...] you should be able to do whatever you need to do to generate the most affordable housing at the most efficient costs that you can."
HousingNowTO Technical Lead Mark Richardson
In fact, Richardson shared that in 2021, there was a massing study done on 35 Bellevue that found that they could have built 10-storeys of affordable housing with 140 bedrooms and a mix of units, not just studios, but zoning limited the development to four stories and 78 studios.
In Richardson's view, Perks' denial that zoning has anything to do with Toronto's housing crisis is flawed.
“Unfortunately, based on his comments at Committee, it appears that Councillor Perks is clearly far more interested in recycling anti-capitalist dogma and debate-club posturing than actually executing upon the many new build affordable rental apartment developments and delivery opportunities that are currently languishing somewhere within the City of Toronto and CMHC’s many amorphous bureaucratic blobs," Richardson told STOREYS. "Our volunteers at HousingNowTO have clearly and repeatedly shown site-by-site examples where City Hall policy and processes are negatively impacting the real-world delivery of new below-market rental apartments in Toronto."
In one of these examples, Richardson highlighted a senior's affordable housing co-op development planned for 355 Coxwell Avenue, first submitted in July 2016, but which has yet to be erected a full eight years later. The reasons he lists? Hold ups due to what Richardson calls the City's "mañana ['tomorrow'] machine," including parking minimums (though it should be noted most parking minimums have been eliminated as of 2021), increased costs due to long processing times leading to a re-application process, the requirement of three site plan submissions, and height-restricting by-laws.
"At this point, Toronto’s Planning and Housing Committee needs an intervention – and the first-step in recovery is always admitting you have a problem and that things have become unmanageable," Richardson says. "Our HousingNowTO volunteers are ready and willing to help, once they make that first-step.”
But Perks maintains his stance. “The claim that government interventions through public consultations, zoning regulations, and fees and charges have stopped housing from being affordable is nonsense," he told STOREYS. "Government action is not why there’s a housing affordability crisis in Toronto.”
On the topic of zoning, which he says should not be described as "restrictive," Perks points out that there are "huge" parts of Toronto zoned for many different housing types. As of May 2023, multiplexes are permitted city-wide, though some in the industry, including Chris Spoke, builder and developer with Toronto Standard, say the legislation doesn't go far enough.
Chris Spoke, builder and developer with Toronto Standard
"I think if the by-law were passed with the same specifics five years earlier, we would have seen much more pick up, but the problem now is that land has gotten so expensive that you generally need more of a lift in terms of the density you could add to any given piece of land than the multiplex by-law allows for," Spoke told STOREYS. "So, if we want to see more [development], then we need to see improved permissions: more units, more height, and so on. [...] if you have permission to build four storeys and six units, the incremental revenue that those two additional units would give your project would allow you to pay more for land, and then you’re actually in the game."
But Perks says that if zoning is the issue we would have started having problems a long time ago. "We’ve had zoning laws in place for about 75 years now, all over the place, but the real distortions in the market start around 2010," he tells STOREYS. "Prior to 2010, there was a reliable relationship between people’s incomes and rent and mortgage cost. In order for the argument that zoning and fees are the problem to make sense, something would have had to happen in zoning and fees sometime 10 to 15 years ago, that suddenly changed the relationship, and nothing happened."
Of course, as Spoke explained, outside forces like increased land prices necessitate zoning reform. Additionally, something did happen to fees — they ballooned to levels that now far outrank inflation and the construction price index.
In fact, a recent benchmarking study from the Building Industry and Land Development Association (BILD) found that average municipal fees in the GTA have risen by $42,000 per unit on low-rise developments and $32,000 on high-rises, just since 2022. In Toronto, average fees for a low-rise are now $165,000, and that's before developers lose even more capital to "excessively high" approval timelines that, on average, run 20.3 months in the GTA.
To Marlon Bray, VP of Toronto-based Clark Construction Management, it's these increased costs, among other government actions, that have contributed to the "glut of shoebox units," described by Perks.
Marlon Bray
"We have what they forced the development community to build. To complain about the consequence of your own actions seems odd," says Bray of Perks' comments at Committee. "We have unaffordable homes because of up to 30% in sin taxes on a new home that takes 10 years to develop, often, and with massive risks and low yields. What we have is what councillors and MPPs voted for over and over again in an unmitigated housing disaster, buried in red tape and needless interference."
Perks tells us, however, that there are much larger forces than development fees and zoning by-laws fuelling Toronto's, and many other city's, housing crises.
One thing he hones in on is that the housing crisis is not a Toronto-specific problem. “Firstly, It’s not a local problem. This is a global problem. Every major urban area we have any information about is going through an affordability crisis," Perks told STOREYS. The problem, summarized by Perks, is one of income inequality and wealth distribution on a global scale.
He explained how, over the last 25 years, private investment has largely shifted away from production and manufacturing to real estate. "Probably about three quarters of all wealth in the world right now is tied up in real estate, and that’s been growing," says Perks. "It's a function of the inequality of income and wealth, which is very well documented [...] So you’ve got all this money that’s accumulating with the wealthy, and instead of building factories they're buying land, so the price of land has skyrocketed."
Zooming in, Perks points out that Ontario's development industry works differently than it did a generation ago. "In 1970 or so, a developer would build a building and own it, and they were in for a long haul," he says. "Now you have a whole class that is turning over land fast and then handing it over to a condominium corporation. So you have this quick return thing going on." At the same time, he explains, a building won't get constructed without pre-selling at least 70% of its units — the majority of which are bought by investors who then turn them into rentals or just sit on them forever.
"So you have all these market things going on that are utterly outside of the ability of municipalities to do anything about," Perks says. To him, the solution to this inherently capitalistic model is its inverse: social housing. "If you look around the world, historically, no one, ever, anywhere, has solved a housing affordability problem through the private market," he says. Instead, he points to places like Vienna and Stockholm, where their governments have invested robustly in social housing.
Perks says that the City has been trying to initiate a return to Canada’s social housing hey-day, which spanned from around the '50s to the '90s, through cooperation with the federal and provincial governments. “We’ve got five projects in the ground, 18 that will be in the ground within the next year and a bit, and another 60 or 70 that are ready to go when the federal government, and CMHC particularly, get back into funding social housing like they did in the '70s,” Perks says. “That’s the path out. That’s why it’s important that we look closely at the claims of Market Urbanists and realize that they don’t actually match the facts.”
But while many wouldn't argue that more social housing is needed, government incentives transformed the development industry into an investor-phile landscape, and unequal wealth distribution has superficially jacked land prices, some have said Perks' claim that development fees and zoning have zero role to play in Toronto's housing affordability crisis is concerning.
As Spoke says, "No economist would agree with what Gord Perks said [at Committee]. It’s intuitive. If you make it more expensive to build something, and if you limit the scale of what you're allowed to build, you're going to see less of it built. It’s one thing for anyone to hold those views, it’s another thing for the Chair of the Planning and Housing Committee to hold those views. It’s pretty concerning."
