Affordable Housing & Inclusionary Zoning: A Viable Solution for Toronto?

Affordable Housing Via Inclusionary Zoning: Viable in Toronto?

By: Gilbert Neumann

Seventy years after the United Nations first declared housing to be a human right, the federal government of Canada belatedly followed. After formal recognition by Prime Minister Justin Trudeau, stating that “housing rights are human rights,” anti-gentrification groups (henceforth AGGs) in Ontario rejoiced (Tasker). For this diverse sector of organizations, this federal acknowledgement was an important victory: housing is a federal, provincial, as well as municipal responsibility. At the provincial level, the Ontario Human Rights Commission had previously recognized this same right. Consequently, the (now former) Ministry of Housing Peter Milczyn was now under increased political pressure to act on the housing recommendations contained within the reports released by the province.

Historical Context

Before delving in, it would be worth engaging with relevant moments in Canada’s history that made affordable housing an issue today. Following “the sharp recession of 1981–82 and a second oil price shock, leading to an even larger federal deficit”, governments “became much more restrained in expressing confidence about the ability to influence macro outcomes in the short term”  (Doern et al. 63-4). In turn, they focused primarily on what they reasonably could do without interfering with the economy and positively influence it in the mid to long term (64). Thus, Canada turned its head towards neoliberal policies, shifting the responsibility of the federal government on social issues to the provincial and municipal level by cutting federal subsidies to programs (Mah and Hackworth 58).

Seeing as the federal level organized and financed much of the country’s social housing, it especially fell apart, save for a small program to aid Indigenous peoples housing. This inevitably resulted in “municipalities […] struggling to build, retain, or even adequately repair the social housing that [it] ha[d] been downloaded” (58). Consequently, affordable housing became the issue it is today.

Inclusionary Zoning Draft Regulations

Anti-gentrification groups fight for affordable housing through things like inclusionary zoning (henceforth IZ) which serves as a way to achieve this. This method is a land-use planning tool that can be used to develop affordable housing units as an addition to housing projects of at least ten units (Inclusionary Zoning). Because of this, these groups found it encouraging that the Ministry of Housing put forth a draft for IZ regulations intended to create more affordable housing in 2016. By December 2017 Milczyn released the draft regulations for inclusionary zoning.

Though it allegedly received excited feedback, it also raised many concerns. For instance, sixty anti-gentrification groups reached a consensus that they were “distressed to see a set of draft regulations that undermine virtually every aspect of the legislation” (Banks 1). In response, all sixty of these groups sent their criticisms of the draft regulations in the form of a collective letter directed to Milczyn and released publicly.

In response to the many worries, Milczyn published an article entitled “Ontario housing minister explains inclusionary zoning rationale”. He insisted to concerned individuals that “[t]he draft version of inclusionary zoning I have proposed will not be the final version. I have heard a lot of good ideas from the public and from housing advocates. That’s why consultation is important to me. That said, I want to dispel some myths about my proposal.” Yet, this effort to be accountable backfired. Less than a month later, the Chairman of Maytree Alan Broadbent responded to this opinion piece by writing an open letter to the Milczyn. The Chairman set himself and, by extension, his public policy organization, as another housing stakeholder whose informed, evidence-based analysis must be taken into consideration “to give Inclusionary Zoning a chance to succeed.”

Analysis of Official Regulations

Though the revisions on IZ regulations had been officially documented by April 12, 2018, it is worth noting which of the concerns provided by AGG’s and Broadbent had been remedied or are relevant when considering the socioeconomic and legal circumstances. For brevity’s sake, the issues raised by AGG’s and Broadbent will be mentioned first: (1) in the new regulations affordable housing can only occur along for-profit development and the need to compensate to developers; (2) the regulations provide the province with too much power over municipalities in the planning process; (3) the minimum number of units in for-profit development for IZ is too high (twenty initially); and (4) a regulation on the number of units per housing project. Before going further, it must be mentioned that the points made here assumes that each actor involved in IZ–primarily the Ministry of Housing, municipalities, developers, community members–goes along with the current regulations and does not consider misuses of power or unforeseen obstructions that may affect IZ.

The first point forgets to consider the historical context that made co-operation with for-profit projects necessary and the current municipal budget.

Because municipalities are often cash-strapped due to neoliberal policies, they often resort to section 37 of the Provincial Planning Act, especially Toronto. Here, councillors of municipalities to negotiate with developers by providing them with density bonuses. This permits them to increase the size of a building and number of units and approval in their projects in exchange for community benefits (Pantalone 2).

If a developer rejects these bonuses, though often rare, they can appeal to the Ontario Municipal Board to remove the community benefits and initiate the project regardless (30). Many of these refusals to benefits can include its lack of connection to the developer’s project (20-30). Making IZ a part of the planning process frees negotiating with developers that may refuse density bonuses and thus, lengthen the development process. Additionally, they provide the residents involved information to how their homes are constructed.

The historical use of section 37 for community benefits and use of neoliberal policies also explains why the affordable housing section of Toronto’s budget is considerably smaller than other sections (Budget Basics). Section 37 frees municipalities and taxpayers from paying for IZ. This can allow for focus on temporary social housing programs that already exist. This should not be interpreted as deliberately sabotaging those in need of housing; because housing takes a great deal of time to construct, the priority should be supplying shelter in the meantime. Though it can be argued that compensation to developers is unnecessary when municipal funds exist, it should be remembered that developers need an incentive to include IZ in their projects. Cooperation with the private sector is therefore helpful, though not ideal, given the current socioeconomic circumstances.

The second matter seems to conflate provincial power over municipalities with an establishment of standards for inclusionary zoning. While there is some truth that implementing inclusionary zoning effectively would depend on local contexts that vary wildly, it can be argued that setting standards ensures that they are built. Variability may lead to disagreements that can prolong the time to construct homes. Again, not ideal, but may be necessary. Additionally, the construction of standards here do not completely restrict municipal planning. Many of the limits imposed on IZ center on the number of units necessary to construct it. The need for an official plan in every scenario provides much freedom to municipalities (see section 3 of the IZ regulations and section 16 of the Planning Act below). The third has changed from a minimum of twenty into ten, thus making IZ more available with a lower limit. The last issue concerns the regulation on the number of units on the basis that it should depend on each local context. The final regulations state that the quantity of housing units ought to be derived by the urban planning staff. In theory, this would remedy their concerns so long as the optimal number of units are constructed without obstruction. In these issues, the final official regulations seem to make IZ more possible and viable through legal means.

Between the AGG’s and Broadbent, the former state unique points worth looking through. They include the following: (1) limits on the length of affordability and (2) lack of clarity regarding proximity. The initial IZ regulations draft limited the affordability period to twenty to thirty years. This has been changed so that municipalities determine the period in their planning. However, this likely does not completely satisfy the AGG’s; they state that other North American jurisdictions are, “moving to longer affordability periods and in many cases to perpetual affordability or 99-year affordability periods” (2).

They rightly claim that a twenty to thirty year period is too short for any family to reach a stable and reliable income. However, arguments for perpetual affordability misses the point of preventing homelessness in the first place. The need for affordable housing comes from prevalent homelessness. The concern should be what can be done to prevent housing issues; not primarily on what we can do to providing for those who need it.

The second point does maintain some importance. As it is, the proximity is to be determined by by-laws passed by municipalities. Such vague language raises suspicion in its application, so any concerns should be seen in the future.

Criticisms of Regulations

Bear in mind that the above explains the roots these regulations rather than a defense of them (though their benefits can be admitted). Truthfully, in the long-run, they do not remove the causes of homelessness. Instead, they serve as temporary bandages to homelessness and poverty. The root of the problem undoubtedly lies in the current capitalist economic structure. Ergo, obstructions to the way capitalism sustains itself should lead the way to remedying social problems.

To support this rather bold premise, it would be sensible to describe the functions of capitalism that lead to socioeconomic inequality. One defining quality of capitalism is its inherent evolutionary tendencies via innovation. As Joseph Schumpeter notes,

“[capitalism] is incessantly being revolutionized from within by new enterprise, i.e., by the new intrusion of new commodities or new methods of production or new commercial opportunities into the industrial structure as it exists at any moment” (31). Additionally, he writes, “every situation is being upset before it has had time to work itself out. Economic progress, in capitalist society, means turmoil” (32).

Because capitalism by nature strives for profits for expansion, it follows that firms tend to invest in new production methods for improved efficiency to reduce costs. For example, firms can cut the amount of employees needed to operate a machine by simplifying the production process. This can increase profits for more expansion as well as decrease job availability overall. New commodities that replace old ones due to better utility and/or cheaper costs can displace workers that produce the latter. A significant application of this idea can be readily seen in the shift from the dominance of the manufacturing industry to the prominence of the service industry. Because there is little overlap between the two in the skills used, workers of the former  are easily displaced in the short-run. In turn, those greatly affected by these shifts suffer because their reduced incomes hamper their spending for essential goods. Innovation in a capitalist system, though can be beneficial in the grand scheme of things, can be detrimental in social well-being.

So long as the private sector continues to dominate in the economy without enough government intervention to lessen the consequences, job availability and stability remains suspect in the long-run. To put the issue more overtly, all levels of government should make greater strides in ameliorating social problems. As stated earlier, the Canadian government decided to withdraw from intervening in economic affairs due to their assumed inability to establish meaningful change. This naturally raises debate in what the government’s role in the country is (i.e whether it is ethical for it to intervene or not). However, if the premise of refraining from society stems from the supposed inability of federal government to solve social problems, then the adoption of neoliberal policies should not be the answer. It makes more sense to adopt a different method of creating public policy that involves government intervention rather than abstaining from societal affairs. The current IZ regulations only suffice to fix homelessness in the short term, but fails to address and subsequently weaken the other factors that cause it. They realistically aid it; these regulations hardly affect the neoliberal policies that begat these issues. Because the growth of private markets is a significant factor in poverty and homelessness, neoliberal policies ought to be abandoned to create meaningful change.

Looking Ahead

As seen, the whole anti-gentrification movement presents relevant issues regarding affordable housing via IZ. Many of the points raised by the AGG’s and Broadbent, including length of affordability and regulation on minimum quantity of units for IZ to apply, have been remedied to a degree. Other arguments however seem to neglect the historical context that made some of the legislations, though not ideal, understandable given the socioeconomic circumstances wherein neoliberal policies dominate. It should be remembered that understanding the rationale behind these regulations is not completely defending them, for they perpetuate neoliberal policies. Without addressing how the private sector plays a large role in propagating homelessness and poverty, the long-term consequences seem bleak. These legislations should realistically be taken with a grain of salt because there remains the potential for a politician to abuse their power to revoke IZ for whatever reason. Nothing is certain, but it would do well to be cautious. Despite many setbacks, the anti-gentrification movement strives to continue to ensure the government follows through on the commitment to housing. Now that housing as a human right has been recognized at the provincial and federal level, whether either of these levels of government successfully act upon such important issues remains cautiously optimistic.

Works Cited

Banks, Milton. “We are writing to express our deep concern over the draft inclusionary zoning  regulations published shortly before Christmas.”. Estatedocbox. 2018. https://estatedocbox.com/80111824-Buying_and_Selling_Homes/We-are-writing-to-express-our-deep-concern-over-the-draft-inclusionary-zoning-regulations-published-shortly-before-christmas.html. Accessed 17 Dec. 2018.

Broadbent, Alan. “Let cities build affordable housing: An open letter to the Honourable Peter Milczyn, Ontario Minister of Housing”. Maytree Foundation. 22 Feb. 2018. https://maytree.com/publications/let-cities-build-affordable-housing/ Accessed 27 Dec. 2018.

Budget Basics. City of Toronto. 2018. https://www.toronto.ca/city-government/budget-finances/city-budget/basic-basics/

Doern, G. Bruce, et al. Canadian Public Budgeting in the Age of Crises : Shifting Budgetary Domains and Temporal Budgeting, MQUP, 2013.

Inclusionary Zoning. Ontario Ministry of Municipal Affairs and Housing, 2018. http://www.mah.gov.on.ca/Page13790.aspx. Accessed 17 Dec. 2018.

Mah, Julie, and Jason Hackworth. “Local Politics and Inclusionary Housing in Three Large Canadian Cities.” Canadian Journal of Urban Research; Winnipeg, vol. 20, no. 1, 2011, pp. 57–80.

Milczyn, Peter. “Ontario housing minister explains inclusionary zoning rationale” Toronto Star. 30 Jan. 2018. https://www.thestar.com/opinion/contributors/2018/01/30/ontario-housing-minister-explains-inclusionary-zoning-rationale.html Accessed 20 Dec. 2018.

O. Reg. 232/18: INCLUSIONARY ZONING. Government of Ontario, 2018. https://www.ontario.ca/laws/regulation/r18232 Accessed 18 Dec. 2018

Pantalone, Peter. “Density Bonusing and Development in Toronto”. Outstanding Papers – Year: 2014. Toronto, 2014. Accessed 17 Dec. 2018.

Planning Act, R.S.O. 1990, c. P.13. Government of Ontario, 2018. https://www.ontario.ca/laws/statute/90p13 Accessed 18 Dec. 2018.

Schumpeter, Joseph A. Capitalism, Socialism, and Democracy. Harper Perennial Modern Thought, 2008.

Tasker, John Paul. “Trudeau says housing is a human right — what does that mean exactly?” 5 Dec. 2017. Canadian Broadcasting Corporation. https://www.cbc.ca/news/politics/trudeau-housing-rights-human-rights-1.4414854. Accessed 5 Jan. 2018

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