Rezoning for transit oriented development is the key to new housing supply

According to a new report from the Centre for Urban Research and Land Development, there’s plenty of space for new transit oriented development, but outdated city bylaws are preventing new housing from being built. 

The report titled “Transit Nodes in Ontario Have Untapped Development Potential” was financially supported by the Ontario Real Estate Association and the Ontario Home Builders’ Association. 

The Ontario government predicts the province’s population will increase by 4.3 million over the next 24 years, which would require approximately 1.8 million new households. That means we need to be building 75,000 new housing units a year to accommodate the growth. According to CUR, Ontario averages 63,000 new housing units a year over the last 24 years. 

Clearly, not enough housing is being built, but what’s the solution? The report says it’s time to focus on transit oriented development (TOD), which refers to “diverse, mid-to-high density, walkable neighborhoods near major transit nodes (Public Transit, 2004), for instance, subway stations, light rail lines and GO Stations.” The area of a TOD is technically within 500-800 meters of a transit station, or 10-15 minutes walking distance. 

There are 200 major transit nodes across Ontario that have “unmet development capacity” because bylaws prohibit high density housing to be built. 

A 2009 report from the Canada Mortgage and Housing Corporation studied the density required in order to consider a TOD successful, and found that 1,000 units per square kilometer for a station with infrequent bus service was optimal. When considering rapid rail service, the density jumped to 3,000 units per square kilometer.  

CUR is reporting that “Over 30% of the geographic space surrounding the 200 major transit hubs in Ontario is predominantly single-detached homes and have room to absorb more density.”

The best way to meet these density targets is for the municipalities to strategically implement “as-of-right” zoning for transit corridors. Currently, municipal bylaws dictate the types of housing being built, but many of the zoning rules date back to the 1970s, in a time when more car dependant, single-family communities were being built. This doesn’t make sense today (though detached housing is still the preferred housing type for most buyers).   

CUR highlights two ways higher density housing can be built in these transit corridors with outdated zoning: either the land owner applies for rezoning or the municipality updates the zoning in anticipation of the development of mid- to high-density housing. 

When a rezoning application is filed, it can be (and usually is) a long process, and the longer a development takes to get approved, the more costs that get passed down to the homebuyer. So, how can municipalities take action?

CUR researched 1,500 square kilometers of land around transit nodes and discovered that municipalities only rezoned 154 square kilometers. Clearly, municipalities aren’t being proactive with regards to the need for higher density residential developments along transit corridors. 

The key is for municipalities (and everyone living in these areas) to recognize the economic benefits of making zoning changes to allow for higher density housing. CUR says that rezoning along low-density transit corridors could lead to 20,000 more new housing units a year, which “would result in a $5 to $7 billion uptick in residential construction expenditure.” This translates into more jobs, higher disposable income, and financial and time savings for those living in and near TODs.  

Overall, CUR believes the 200 transit nodes in Ontario could accommodate up to 4 million housing units via missing middle development. 

We have the land, it’s just a matter of rezoning certain areas to allow for the growth to happen. Land supply isn’t the issue - it’s politics and policy.

We highly recommend reading the full CUR report.