Our housing supply crisis is at a critical crossroads. To tackle the problem, we must find a way to lower the tax burden on new residential construction, reduce the red tape and bureaucracy around development approvals, and – just as important – allow more density in our cities.
Current zoning laws in many municipalities are too restrictive and severely limit the number of homes that can be built. To boost supply, regulations must be altered to permit more as-of-right zoning in municipalities, pave the way for more densification and reduce housing costs.
Other jurisdictions around the globe have figured it out and are taking bold steps to reform their policies, proving that real change is possible. We must follow their lead and do the same here.
Cambridge, Mass., a college town of 120,000 across the Charles River from Boston, just voted to end exclusionary zoning. Council there voted 8-1 for zoning reforms which will clear the way for more densification that will support more housing units and bring housing costs down.
Before the changes, single-family zoning and other exclusionary zoning codes were in place throughout much of the city. Now, up to four storeys can be built anywhere in the city, and residential buildings up to six storeys can be built on lots greater than 5,000 square feet, as long as one of the units are deemed affordable.
Lesson to Be Learned
The zoning amendments passed by Cambridge are a prime example of what real reform looks like. The reforms are a dramatic change and go beyond the ineffective nibbling that we’ve been experiencing. proving that real change is possible when governments take action.
There is a lesson here for governments in Canada. Densification can help to address our housing crisis. We need zoning reforms that permit more homes to be built in residential areas.
In Ontario, for example, each municipality has zoning rules that control the use of land and development inside designated areas as well as bylaws that dictate the permitted height of buildings. However, these rules are only exacerbating the housing crisis by restricting building heights. We need rules that enable us to build housing that better suits the needs of Canadians.
Some steps have been taken.
In 2022, for example, the Ontario government passed the More Homes Built Faster Act, 2022, that required municipalities to allow up to three dwellings on a parcel of residential land within fully serviced settlement areas. However, the government hasn’t budged on allowing as-of-right fourplexes province-wide, despite being recommended by the Housing Affordability Task Force.
Calgary city council has approved a plan to permit more housing types while the mayors of Kitchener and Guelph have touted building more fourplexes as a solution to the housing problem. Victoria also took significant action, adopting a proposal to allow multi-unit homes in most of the city where zoning has excluded anything but single-family homes for more than 40 years.
Toronto city council adopted as-of-right zoning to allow up to four housing units to be built on a single lot in all low-rise residential neighbourhoods. Earlier, Toronto also approved an official plan amendment to allow small-scale apartment buildings and townhouses up to six storeys and 60 units on major streets and in designated neighbourhoods. Prior to the change, townhomes and small residential buildings were only allowed in specific areas throughout the city.
Housing Situation Is Bleak
There is, of course, an urgency to all of this. Many people simply do not realize just how bleak the situation is at the moment. And it’s only getting worse.
Sales of new homes in the GTA are at a record low. Buyers are sitting on the sidelines despite excessive inventory.
In January, sales of new single-family homes in the GTA were down 27 per cent from the same month in 2024, and condo sales in the region were down 58 per cent over the same time period. In the Greater Toronto and Hamilton Area (GTHA) in 2024, 14 condo projects were cancelled.
Densification alone can’t solve the housing supply crisis, but in concert with initiatives to lower taxes and reduce the paperwork for residential developments it can get us back into race.
Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at media@rescon.com.