Today is National Housing Day, and with each passing year, the occasion grows in visibility. This is not necessarily a good thing. It’s a telltale sign of the persistence of this country’s housing crisis. It’s also an increasingly dominant issue during Canadian elections at the federal, provincial, and municipal levels, at the expense of other pressing matters Canadians are facing.
A recent Abacus poll found that “making life more affordable” and “improving housing and reducing homelessness” are the second and third most important issues for Nova Scotia voters in their ongoing election, just slightly behind health care. One of the issues getting crowded out is climate change, with an October Abacus poll finding that Canadians are now looking for climate policies that are not at odds with affordability.
Fortunately, there are a number of housing reforms that help with affordability and climate change. The solution to addressing both is often not through governments doing more but rather doing less. Through targeted tax cuts and red tape reduction, all orders of government can lower monthly expenditures for the five housing-related categories that make up nearly half of all consumer spending: rent and mortgage expenses, transportation costs, property tax, utility bills, and homeowners insurance.
At first glance, it would seem strange to include transportation as a housing-related expense. But one of the biggest determinants of someone’s transportation costs is where they live. Too often, families have been priced out of our cities, forced to “drive until they qualify” to surrounding communities; requiring them to endure lengthy and costly daily commutes to work. By allowing people to live closer to where they work, shop, and play, we can enhance affordability for families.
This can be done through removing a web of regulations that make it expensive to build in our cities, from mandatory parking minimums to angular plane rules, to building code prohibitions on small-European style apartments. Speeding up the approvals process, by instituting reforms like Edmonton’s same-day development permit system, can substantially lower costs.
The web of bespoke rules in each Canadian municipality makes prices higher than they otherwise would be, by preventing builders and developers from exploiting economies of scale.
How efficient would our automotive assembly sector be if Mississauga required all gas tank doors to be on the passenger side, Edmonton required them to be on the driver’s side, and Nova Scotia required them to be behind the bumper? Multiply this by a hundred, and that’s Canadian homebuilding. Streamlining and harmonizing rules could both lower the cost of building but also lower transportation costs. This is best done by having provinces create unified standards for municipalities.
Development charges and other municipal fees can also push families out of our cities because these charges are substantially lower in smaller communities. For example, the development charges in the City of Ottawa for a single-detached home outside of the Greenbelt are over $63,000, three times the rate in surrounding towns.
These high costs are pushing families out of the city, into communities such as Mississippi Mills, often requiring parents to drive back to Ottawa each day for work. This increases their transportation costs and reduces the amount of time they can spend with their kids. Cutting these development charges, and finding better, less expensive ways to pay for infrastructure could substantially enhance affordability.
These transportation savings go beyond simply allowing more people to live in cities. They also end up creating better neighbourhoods, in big cities and small towns alike. I live in one of the old streetcar suburbs of Ottawa, built over 100 years ago, where various housing types were then allowed to co-exist, and retail intermingles with residential homes. The transportation savings from living here are enormous.
Just the other day, I promised my kids take-out pizza for dinner. Instead of having to hop in the car, or pay a delivery fee, I could simply walk around the corner and pick up our food, leaving more money in my pocket. Because of these conveniences, our family has been able to get by on a single car, saving hundreds of dollars each month.
Old mixed-use neighbourhoods like mine are very popular, which unfortunately has also made them some of the most expensive places to live in Canada, negating their transportation savings. But they are expensive because they are in short supply. Why are they in short supply? Because they have been legislated out of existence through post-war zoning. There is no reason why we cannot build great Canadian neighbourhoods like this again. We just need to remove the zoning barriers, which can be done either by municipalities or the province.
Property taxes are also an underrated driver of the financial pinch families are feeling. This week’s Consumer Price Index data reveals that, across Canada, property taxes are up 6 percent year-over-year, growing three times faster than the rate of inflation. Removing red tape and taxes from urban development could reduce per-family municipal expenditures, and therefore lower property tax growth, in two ways.
First, by using more efficient use of land, cities can make better use of existing infrastructure, lowering the amount of infrastructure. Secondly, by allowing more families to live in the city and thus increasing the tax base, the city can spread those costs across a larger number of families.
The climate benefits of these changes are considerable as well. By allowing people to live closer to where they work, by legalizing neighbourhoods with multiple transportation options, and by removing barriers that prevent generating, storing, and using renewable energy on-site, we can lower greenhouse gas emissions.
Transportation accounts for more than a quarter of all of Canada’s emissions. So, it must be at the centre of any climate agenda. Reducing emissions does not always need to come from more taxes or stronger regulations, but instead can be achieved by reducing taxes and removing red tape that is inhibiting decarbonization. Targeted tax reductions and deregulation can play an important role in drafting a credible climate plan.
These ideas and dozens more like them, are part of our latest report “Four Pathways to Housing Affordability.” Politicians across every order of government should look for opportunities to create family-friendly neighbourhoods that both tackle climate change and leave more money in Canadians’ pockets.
Mike Moffatt is the founding director of the PLACE Centre and co-host of the podcast The Missing Middle.
