This is the key to building more affordable housing

On vacation in Vancouver this week, a friend of mine remarked on how much land there appeared to be available for development. In a city with out of control prices (even more than ours) that just took the minor measure of taxing foreign investment, unlocking land for building strikes me as the most urgent need to addressing lack of housing supply, which in turn would adjust prices downward far more than any tax.

McKinsey, a global consulting firm, in 2014 predicted that the number of urban households living in substandard housing could grow to 440 million from 330 million by 2025, translating to a housing gap that would affect one in three city dwellers.

In its McKinsey Global Institute report “A blueprint for addressing the global affordable housing challenge,” the firm defined the housing gap as the “difference between the cost of an acceptable standard housing unit and what households can afford to pay based on no more than 30 percent of income.”

Using as a base 2,400 metropolitan areas and case studies garnered worldwide, they found that the replacement of inadequate housing and the construction of new units by 2025 would require $9-$11 trillion in construction spending alone; with land added, that could total $16 trillion.

Such a figure is nearly impossible to grasp, so I Googled “how much is a trillion dollars” and learned that if I spent a million dollars every day since the birth of Christ, I would not yet have spent a trillion dollars. A trillion has 12 zeroes — that’s a thousand billion, and a billion is a thousand million. Let that sink in.

The report said that the use of four approaches used in tandem could reduce the cost of affordable housing by 20-50%. Their four-pronged approached starts with unlocking land supply; the others are reducing construction costs; improving operations and maintenance; and lowering financing costs for buyers and developers. Deceptively simple, each is of course up against numerous obstacles.

Driving around the GTA, it isn’t hard to spot land that is seemingly available for building, but currently designated to green spaces, privately owned, or zoned for lower density. I don’t want to live in a city devoid of green space, obviously, but nor do I want to live in a city where housing costs mean families can’t afford a decent place to lay their heads.

Unfortunately, the haves tend to protect what’s theirs from the have-nots, and since the haves are a more influential force politically, we haven’t turned to some tough but increasingly necessary measures to free up land for building more housing. More supply would, naturally, help keep pace with demand, which naturally lowers prices. But regulatory measures to free up private land, such as idle-land regulations, would be a tough sell to a voting public.

We tend to think in an all-or-nothing way about densification — either we have the desired infrastructure available or we don’t build. But sometimes a half measure is better than none. Should we be looking at relaxing infrastructure standards? And while public art is lovely, I’d rather see builders contributing to affordable units than putting up another abstract sculpture. The approvals process for repurposing existing buildings should be quick and straight-forward, but seldom is.

We’ve made some strides towards unlocking public lands, such as the LCBO head office site down the street from the Toronto Star building, but there’s work to be done. We’re still in the process of reviewing under-enrolled schools, but the idea of school closures always sparks hot debate. And much of the area of land under the Gardiner remains an underutilized eyesore.

We used to think of affordable housing as something needed by the underprivileged, but these days it could apply to almost anyone in the GTA. We aren’t quite where Vancouver is now, but with the average detached home price in Toronto hitting the $1 million mark, we need to get a lot more realistic about addressing it. A 15% tax on foreign ownership just ain’t going to do it.