The Future of Housing in the GTA: Challenges and Opportunities

The Empire Club Presents

Joe Vaccaro, Ana Bailao, Riz Dhanji and Jason Mercer, Moderated By Chris Spoke

With:

The Future of Housing in the GTA: Challenges and Opportunities

Welcome Address, by Paul Fogolin, Vice President of the Ontario Retirement Communities Association and President of the Empire Club of Canada

May 23, 2018

Good evening, fellow Directors, Past Presidents, members and guests. Welcome to the 114th season of the Empire Club of Canada, and welcome to the Spoke Club.

For those of you just joining us through either our webcast or our podcast, welcome, to the meeting.

My name is Barbara Jesson. I am the President of the Empire Club of Canada and your host for tonight’s event, a discussion on the future of housing in the GTA.

Before we get started, I would like to draw for our door prize, which is a bottle of Ripasso Bosan, sponsored by Cesari Fine Wines of Verona. Eric Martin, congratulations!

Years ago, I read a book by Canadian American architect and writer, Witold Rybczynski, called Home: A Short History of an Idea. In this book, he talks about how the emergence of domestic housing, more or less as we know it today, first appeared during the Renaissance. Until that time, people lived more or less in communal settings. Rybczynski observed that our modern notions of privacy and a life of the interior occurred with changes to our domestic living arrangements and that the creative burst we identify with the Renaissance came about because of this.

I have been thinking about this a great deal as we look at our current housing shortage and the rising prices that make the notion of owning a home almost impossible for ordinary people. Not meeting the physical needs of so many people by providing adequate housing is one thing, but just think about all the creative opportunity costs lost because so many children lack a secure environment in which to thrive.

I live in a very trendy part of the city. When I bought my house, I did not have two cents to rub together, but I had reached a point in my life where everything seemed so frenzied that I just needed a settle place to recover and nurture myself, a central core of quiet. In those days, you could still scrabble together enough money to put a down payment on a house. Today, most of my neighbours are cashing in on the huge upside created by demand in our community where homes sell for well over $1 million after being on the market just a few days. I am one of the last few die-hards among my original neighbours still hanging on, and I come home almost daily to a note in my mailbox from a realtor asking if I would consider selling.

When did we start thinking of our houses as investments and sources of wealth and not as our homes and safe havens? I was really very pleased when I was thinking about this meeting, tonight, to hear the CBC—I think on Monday morning. Matt Galloway was talking to some people who now are finding that they are foregoing best price in favour of a note or a letter from the would-be purchaser talking about why the home in the neighbourhood means so much to them and why it would be meaningful to them. And I think it really is an important aspect of life in the city that we seem to have forgotten. I was so pleased to hear him have that discussion.

I know, tonight, we are going to consider the practical side of the housing market. Have we reached the breaking point? Have rising mortgage rates, the new mortgage stress test and changes for foreign buyers led to a shift in the market? I hope that we will also give some consideration to those more qualitative aspects of housing and how important homes are to, especially, the next generation.

Our panel, tonight, will consider the GTA’s housing market and will look into the future. Our panelists will consider the evolving needs of young millennials and our aging population, the impact of innovation in community planning and homebuilding, and the ideal relationship between the government and homebuilders. As we look at these issues, the importance of providing shelter and community building, I hope, as I said, that we can give some thought to these larger questions of home and what individuals need, not just to exist, but to flourish.

Let me introduce our panelists. Joe Vaccaro is the Chief Executive Officer of the Ontario Home Builders’ Association. His organization oversees 29 local associations representing 4,000 members made up of professionals within the new home and renovation industry. The OHBA is focused on improving new housing affordability and choice for Ontario’s new home purchasers and renovation consumers.

Deputy Mayor Ana Bailão is the Toronto City Councillor for Ward 18, Davenport, and Toronto’s Housing Advocate. When asked to chair the Affordable Housing Committee in her first term, it was at a time when external housing funding was shrinking. Ana has created new opportunities by reducing obstacles and providing new City incentives for the private and non-profit sectors to build affordable housing.

Riz Dhanji is a sales and marketing specialist responsible for marketing some 11,000 condominium units representing over $3 billion in sales. Notable projects include Canada’s tallest condominium at 80 storeys, Aura at College Park; DNA Condos in King West; and YC Condos at Yonge and College.

Jason Mercer is the Toronto Real Estate Board’s Director of Market Analysis and Service Channels. His work provides products and services that help realtors and their clients fully understand trends in the GTA housing market and underlying economic drivers.

Our moderator, this evening, is Chris Spoke. He is the Founder and Executive Director of Housing Matters, where he leads an outstanding team of staff and volunteers advocating for greater housing availability and affordability in Toronto. Ladies and gentlemen, your panel.

Joe Vaccaro, Ann Bailão, Riz Dhanji, Jason Mercer with Moderator Chris Spoke

CS: Thank you. Thanks, all, for joining. Before we start, I am going to make a couple of quick comments on format. We are going to have a moderated discussion here for the majority of the panel. What we would like to do is have two or three questions from the audience following the discussion. If you have anything that is burning up, please, do save it and raise your hand afterwards, because we would like to hear from you guys.

To start this off—and thank you, again, panelists, for joining—the big news, of course, in Toronto and Ontario, is the provincial election that we have upcoming on June 7th, so I would like to start the discussion by looking backwards before we go forward. In the fall of 2016, we saw a steep rise in prices for housing in Toronto. As a response, the Liberal government advanced the Fair Housing Plan. This policy included many provisions, including a foreign buyer’s tax, an extension of rent control on units, including those that were built after 1991. I would like to hear from our panelists.

Councillor Bailão, you first. Do you think this was the right response to the rising prices? We have seen prices moderate since then in the resale market, although rents have continued to rise. If so, why, and if not, why not?

AB: I think it was a good start. I think that it acknowledged that the housing spectrum and the housing continuum needed action at different points in time. There are issues with renting; there are issues with ownership; there are issues with social housing, and they try to bring solutions for those different issues.

I think the most important issue on this whole discussion, to be honest with you, is that it is really for all of us to start bringing to the table because of that lack of data that we have on all of this. I think that is really important—for example, the foreign buyer’s tax or, for example, we, at the City, are talking about a vacant tax. The importance of data and really seeing whether this is having the impact that we truly want are really important. We cannot just have reactive actions just because something is happening and basically start throwing everything at the wall to see if some stick. I think that is a little bit of what happened because, for many years, many levels of governments from all different parties have ignored this housing issue, and it got to a point that we have issues at all kinds of the spectrum from market housing to social housing, and no data, no study, really, on what are really some of these issues.

I think as we move forward, I think it is really important that all three orders of governments and the private sector look for a system such that we have data, so we can look at how these new measures are being implemented. Do not be afraid, if something is not working, to step back and move away from some of these initiatives. I think that it is upon all of us to give the comfort level to the governments to say this initiative did not have the effect that we were expecting it to have and, at the end of the day, to understand that different solutions are for different problems. Very often I hear people say, “Is that going to solve the housing situation?” No, there is not one solution that is going to solve the housing solution. There is not one level of government that is going to solve the housing. There are not just even governments that are going to solve housing. It is complex; it is an ecosystem; it needs to have a dialogue; we need to have data; and we need to keep at it.

The other thing that we need to look at is what I call the ‘soft’ aspect of this issue and the ‘hard’. You have all the planning issues and the zoning and the effects. We need to start understanding more about the social component and the emotional component of this issue.

It is very hard for us, for example, to deal with the fact that people still identify success and the Canadian and American dream with a single-family home and a car parked outside their driveway. This is how people identify success. Maybe in some countries in Europe, they identify success with a two-bedroom condo where their kids share their bedrooms. The fact is that we need to start understanding the emotional and the cultural components of these housing discussions the same way that we need to understand the impact of all the planning and zoning—all these issues, and economic as well, because there is a big economic component to it. The financial component needs to be part of it. I think that very often we do not look at the social and emotional side of it. I think that as we are developing housing policy, we need to bring these three together, the financial planning, the social and emotional sides to it.

CS: Thank you. Joe, I think Ana makes a good point that the housing market is kind of differentiated. We have, on one end, social housing, which probably requires its own policy strategy, and market rate housing, where we are obviously seeing some affordability issues, again. Concerning the Fair Housing Plan and its impact on, let us start with market rate affordability, both in the resale market and rental market. What are our thoughts?

JV: The Fair Housing Plan came into effect because lots of organizations, lots of people, said to the government, “We need you to take some sort of action.” We are amongst that group. There was a real data issue there because the government has, for the last 15 years—the Liberal government has—really done a lot of work in the planning space, that soft space: Changes to the Planning Act, changes to the Growth Plan, Greenbelt, all these pieces. At some point, all those pieces sort of stacked up together, and what we saw was the housing price index for low-rise and for condominiums just continue to spiral up.

At some point—I call it a ‘pain point’—there was a pain point where the government felt the need, now, to act. Fair enough. Was the plan the right plan? I think the plan, from a demand side, tried to deal with, as they call it, the foam on top, that foreign buyer’s piece, whatever that means.

I think, to one of the comments the councillor made here, the reality is—and we see this in all the surveys that we do, and other agencies do—the dream of home ownership is a real dream. Ontario is full of home believers. They want to own something. By owning something, they become part of that community. That is how they become part of that social network. Whether that home is a single-family home or a condominium, that is open to interpretation. Generationally speaking, we are all going to see that. When my grandparents came over here, they wanted a home because that said to the community, “We are here now; you cannot throw us out; we are established.”

Their children inherited that sense of ownership, which means that you are part of the community. It also means you should give back to the community. I think that is just part of the reality on the social piece. What that form is, is a different conversation, because it is different for different people, and that is fine. I think the governments—

AB: I do not know if it is different. I agree that people want home ownership, but what I think is that the Canadian dream is still the single-family, detached home. I think that is one of the issues.

JV: I think I would make the argument that goes like this. If price was not the issue, would everyone want to live in single-family home with a backyard and a two-car garage, if price was not the issue? That is one of the questions you have to put out there, right? I think when we survey that question, we get back overwhelmingly that 75% say yes. If price was not the issue, yes, that would be the ideal.

Now, here comes reality. This is the academic discussion. I love the academic discussions because that is where all the policy entrepreneurs get involved. The practical reality is price is an issue, so you can buy what you can buy, depending on your stage of life, and then you can buy what you need, and then you also live where you need to live. There are lots of families who live where they need to live, not because they can afford what they actually need, but they live in that bedroom or that condominium or the townhouse. There are lots of pieces to it.

I would say, on the government piece, they acted because they were asked to act. I would say that where they fall short in their plan is they respond to demand, data collection—those are all easy, academic fixes. Where they failed is on the supply side because what they failed to do, as a province, is use their tools to get stuff done, and, ultimately, as the advocate for industry—and my member here will say this—at the end of the day, you just want to get it done. If we have an approval, what follows the planning approval is an infrastructural approval. There is no point in saying, “Yes, you can build that building or that subdivision,” and then drag out three years to build the pipe. I need to actually turn the water on. You have not actually done anything. I think that is where the provincial plan falls short. It falls short on actually using provincial tools to get things done, to get supply built. We need all kinds of supply, whether it is laneway houses, townhouses, stacked townhouses, singles, semis, transit-oriented communities—whatever the shape of the development is. We need more of everything. That is the way I would put it to you.

CS: Sure. Thank you. Riz, I think Joe makes a good point that a lot of what we hear in the news addresses the demand side of the market. Provincially, we have this foreign buyer’s tax. Even municipally, we have been looking at short-term rentals and how to better regulate those as they add to the demand for what might otherwise be long-term rental units. Again, going back to the Fair Housing Plan, what are your thoughts? What is your critique? There was some language in the Fair Housing Plan around looking at the development application process and maybe putting together some ideas on how to speed it up and have some sort of supply measured there. Do you think it went far enough? What do you think about all of that?

RD: Overall, on the Fair Housing Plan, I think what Joe is saying is that I think the province had to act, because I think that there was this pent-up demand that was going out of control. I think there was a lot of speculation in the market, and I think that the foreign buyer’s tax, to me, was a right move. Where I do feel it fell short was a lot on the supply side that Joe spoke about. One of the things that I think is the biggest problem is rent controls. I think implementing rent control really does not incentivize a developer to build more rentals. We saw a pipeline of somewhere between 40,000–50,000 purpose-built rentals that were in the pipeline to be built. A significant portion got pulled back. We are only seeing a quarter of that, that is going to be built at some point. Rent control—basically what it does is it caps a developer’s amount that he can rent it out in the beginning, and any future increases—whether they go up by 5%, 6% or 7 %—are capped at a minimum amount on there. Who is providing that rental supply back into the market? It is really the development industry and the condominium industry and the individual investor that has bought their condo that is putting them out for rental. The problem that is happening is that when I am putting out a unit out for rent, I know that renter will probably stay in a lot longer, so I am going to ask a higher rent to make sure that I compensate for maybe two, three years of flat rents on there. That is what a lot of the purpose-built rental companies are doing right now. What you are seeing is rent prices actually increase to the point that I believe last year it was said it went up by 10% in the year, and we expect that it is going to go up another 10%, 15% next year.

Supply is down significantly where vacancy rates are lower than 1%. Where did that actually help the supply side of the rental market? It did not, and it actually made it worse. We are seeing problems of that, and it is going to continually persist on there. That, to me, was the biggest issue that you had there.

As for development applications and getting sped up and increased, there was a conversation about it. I do not see anything that is being done on a provincial or city level to be able to expedite that. In fact, we will go into it a little bit more, but I think the removal of the OMB is actually going to be a detriment to the city, overall, in affordability. I think that those are things that we need to start working on is the supply side. It is a major issue.

CS: Sure. Just to add some data to that, last year, in 2017, we saw rents increase in Toronto by the most that they have in 15 years. We also saw that the CMHC put out a report that we have the lowest rental vacancy right now that we have had in 16 years. This is following the announcement and the implementation of much of the Fair Housing Plan, so, in terms of a metrics for success, we are not doing so well yet.

Jason, what do you think about, again, the Fair Housing Plan and whether or not it was the appropriate response?

JM: I think I will pick up on a couple of things that Councillor Bailão brought up off the top. Number one, I think the Fair Housing Plan did recognize a need for more data to be in the marketplace on all issues surrounding the housing market. I know TREB, and I know the building industry have been happy to take part in those discussions and provide their input when asked.

She also mentioned emotion. I think that even before the Fair Housing Plan was announced, there was data out there. Some were provided by TREB; some were provided by other organizations that suggested that there was, indeed, a supply problem in the Greater Toronto Area and, indeed, the Greater Golden Horseshoe. There was data on foreign buying activity, too. There was some in the GTA—most of our population growth comes from immigration, so it makes sense that we are also seeing foreign buying activity to a certain degree, but that number was small. That share was small. It was pretty obvious that while you could have a psychological impact by implementing a foreign buyer’s tax, it was not going to get at the root of the problem that we are experiencing in the Greater Toronto Area, today.

I argue that right now it has masked that issue further than where it was a year ago, because there has been an impact, because as they have seen some buyers pull back and move to the sidelines. That has been magnified to a certain degree by the stress test that was implemented at the beginning of this year as well. That has masked it a little bit. Things are not quite as tight out there in a lot of segments of the marketplace, but we have seen the largest drop in new listings on TREB’s MLS system on a year over-year basis that we have seen in the last two-and-a half years in April. I would expect that to continue.

As you start to see people move back into the marketplace, you are going to see conditions tighten up again over the medium to longer term, unless we deal with this supply issue, so it is important to note. When we have the data, we have to take emotion out of it, and we have to make proper decisions because when you are thinking about the housing market, certainly, the majority of households, the majority of people that have purchased a home or will purchase a home in the GTA, are or will be happy to have that home, and it is a place to live, but the great, great, great majority of them also do see that as probably the single-greatest investment they are going to make.

There are policy decisions that impact that. It also impacts a broader economy. You are talking about $7 billion a year in spinoffs just from transactions that are reported through our MLS system. Add to that the economic activity that spins off from new home construction, and it is even greater. We are talking over 140,000 jobs; we are talking about $3 billion worth of government revenues. This is sort of the interplay at work when you are making decisions surrounding the housing market. I would argue that we have not made any decisions yet aside from looking at data and looking at other data sources that are going to impact the supply issue in any meaningful way, whether you are talking about the resale market or the new home market.

JV: The one thing I would say is that the one thing that is a bit of an interesting point is that demand is real. Two hundred thousand plus people joined this region last year, so demand is real. There seems to be this idea that we are either producing too many homes, because they do not have many family formations, but, in the industry, we have a running joke that not only is demand real, but demand is being masked by what we call ‘born-again singles’: Couple gets divorced; mom keeps the house; dad needs a condo. That is the reality. You start seeing that as a secondary marketplace. That is part of the demand. On the supply side, if you are not building new supply, and it is only the private industry really building new supply, then the other end of the equation is, as Barbara said, people who are moving out of their family homes and making that home available. You are not seeing that because people are living longer; they are happy to stay in their homes; they are happy to invite their children back to live with them and their grandchildren to visit. What you have is that turnover communities are no longer turnover communities, so you have it at both ends.

AB: I do not know if they are happy to stay in their homes or if we have a system that does not facilitate the movement of them into their homes, because there are about 2 million empty rooms in the GTA, and we need to get to the bottom of that. Why are people not moving? Is it because we do not have the stock that they would actually be interested in moving and make that home available for the next family? When I say the lack of data, I mean actually the lack of us understanding how people are moving. What will get these seniors out of their homes? I could say let us build missing middle, so they do not have to leave the communities and do all that. Maybe, but I have no data to show you this; this is just from the conversations. This is, I think, where we have to get to the roots of these problems. It is understanding.

There are two million empty rooms in our region, and there are families that want to have a family home, and they cannot. How do we make sure that it is easy for people to move around?

The same thing, for example, a lot of people have a big issue at City Hall to support luxury rental. We just had an incentive program for rentals at 150% average market rent. Some of my colleagues are asking, “Why are we supporting an average market rent?” It is about making people being able to move. Maybe some person that is able to afford the 170% or 200% of AMR— if you build it, they will move, and they will probably leave the one that is at 100% that was built 30 years ago that is probably some of the most affordable stock right now, available for somebody else. It is creating this movement that I think we also are not understanding what makes people tick and how we get people to move around to get that stock more readily available. I think we governments have a big role in that, because all kinds of policies either incentivize people to move or prevent people from moving. I think that is where we have to understand this issue a lot better.

CS: Speaking to that point, the Globe and Mail had a report a couple of weeks ago that showed that 52% of Toronto’s land mass actually saw a decrease in population and decreased density. Speaking to the point that the councillor brought up, we have an election coming up, so concerning a lot of what has been done, provincially, we have a chance at doing it again.

It looks like there is somewhat of a neck-and-neck race with the provincial NDP and PC parties. What would you like to see from these campaigns? The PC party has not yet released its platform. What would you like to see from the PC platform, NDP platform? If you could, Riz, we will start with you. Include in your answer, a thumbs up and thumbs down on both the issue of inclusionary zoning, which has gained a lot of traction, recently and the Greenbelt. And for those who do not know, inclusionary zoning is policy that would require that any new development have a certain percentage of its units set aside for affordable or below-market rate rental—so inclusionary zoning and the Greenbelt obviously came up with some of Doug Ford’s comments that he walked back. What would you like to see from the parties ahead of this next election?

RD: Definitely something to do with a mediation between what the OMB is and the new policy that is going to be happening with the city because I just do not have faith that, with the removal of the OMB, we are going to speed up our development process any faster. I think density is going to be an issue with respect to what we are going to be doing in the downtown core, especially, where I focus on, and I think that land values, today, are at astronomical pricing. If we do not get some sort of density in here, I think affordability is going to be even worse than what we see today. That is the biggest scare that I have in the development community that has—Joe can talk about that more—become a real problem for the community. It is a real problem for affordability in the future. I started in this business probably 20 years ago, in Toronto, and then you could get a project zoned in a year, a year and a half. That same process today from buying a piece of land is close to three years. Then, you have got to sell the project, and you are looking at about a year from there, and then you have got another two to three years of actual construction. The risk factor that has gone from a developer, now, has gone astronomical to where the point where returns are in single digits. I just cannot understand why a developer would do development, today.

CS: Even with the prices that we are seeing?

RD: Even with pricing going up, it just does not make any sense. I looked at a proforma today of a site that we are looking at. Because the development charges are going up by 30% over the next three years, by the time the development charges are fully implemented is when we are actually going to start paying for that land—the development charges were the same price as actually the land value. It just does not make any sense to me. Why would anyone want to buy a piece of land when your development charges are the same value of it, as the land? I really think that there needs to be some provincial effort to look at fast-tracking approval processes, looking at density, to be able to increase that.

With respect to inclusionary zoning, I am not a fan of it, so I am not—I am going to tell you a thumbs down for that. I can spend a whole hour on that. With respect to the Greenbelt, I am actually not, I am okay with the Greenbelt being as it is. I just think that there needs to be more density and urban density to be able to compensate for the loss of development land opportunities.

CS: Sure. Jason, same question. What would you like to see from whoever the new provincial government happens to be and, again, if you could, thumbs up, thumbs down on both inclusionary zoning and the Greenbelt?

JM: Councillor Bailão had mentioned the empty bedrooms and that sort of jumps off a study that CANCEA had undertaken for TREB, in conjunction with its year in review, an outlook report that came in January, and certainly it is clear. It gets back to something we talked about earlier as well that if you undertake consumer survey work—and we all have—and look at what people are looking to buy, and it is true. The majority of people, given all the options, would like to have that single, detached home. The issues right now is that there is not a lot of in between—between that single, detached home and say a condominium apartment. We certainly agree that tackling the missing middle issue is an important one.

CS: Sorry, can you define ‘missing middle’?

JM: Yes, from our standpoint, it would be sort of a progression or a continuum housing that is higher density than say a single-detached or semi-detached home, which is the sort of common low-rise type, let us say, in the city of Toronto and many parts of the surrounding region, but lower density than say a condominium apartment. You are getting a little bit more square footage; you are getting more density on a given piece of land, but, at the same time, I guess you could say it is a hybrid that may meet a lot of the needs of people that are initially looking at say at a detached or a semi, so providing those options. I think from a policy perspective, I would like to see— and this is from any party—decisions that are made on policy are data driven and are driven that you can make a concrete argument beyond the emotional side of things that this policy decision or that policy decision made sense because, again, I would argue right now that certainly the policy decisions that were made by the provincial government this time last year had an impact on the market. That is true. I do not think anyone would argue with it, but I do not think they had a long-term impact on the market. They certainly did not have an impact on the supply issue, even when they are presented with the data that said those types of policies would not help.

Insofar as the Greenbelt goes, I think a lot can be done within the current provincial planning constraints when it comes to the missing middle and what have you. It gets more back to the development approval sides of things. I defer to my colleagues that are more versed on the development side on the day-to-day basis, but, I think, certainly, that is an area to start. I am not expert enough in the inclusionary zoning thing to really weigh in on it.

CS: Sure. Going back to municipal politics, Councillor Bailão…

AB: You do not ask me what I want from the provincial government?

JV: Me, too. Me, too. Me next.

CS: Okay, thumbs up, thumbs down, inclusionary zoning, Greenbelt, and, yes, what would you like to see from next government?

AB: I would like to have a government acknowledging that they need to come to the table with money to repair social housing. We need a strong housing benefit program. We have an opportunity with the National Housing Strategy, so we do need a strong national housing benefit and the province needs to be part of it. We need land. We need to make land available. What we did on the west Donlands needs to be replicated and done all over the city. We should not have to, but I think it is important to be given the direction from the province that on the transit corridors—and we are talking about it. But I think that having that direction very strongly from the province would be helpful. There has to be up-zone done; there has to be proper planning and up-zone as of right done along those corridors. There are major investments done with inclusionary zoning put in those lands as well, and we need incentives for rental.

They started with a good program, but, we, the City of Toronto, got $60 million; that is like peanuts. We have been advocating to have HST waived on rental for a long, long time. That is something that the rental people have been asking for a long time. I think this is the right time to do it. These are some of the things that we definitely need to see from the provincial government.

CS: Sure. Greenbelt, thumbs up, thumbs down?

AB: We need to keep the Greenbelt, absolutely. What we need to do, again, it is to ensure that we have an effective and efficient way to develop. There are plenty of spaces that we can develop. Look at all our avenues. We just need to be more effective and efficient, so that the development industry picks up on it.

CS: Sure. Joe, same question. Actually, just building off a point that Councillor Bailão mentioned, there has been a lot of discussion recently about unlocking employment lands for residential, or at least mixed-use, development. Do you think that should be part of a strategy? Let us get a thumbs up, thumbs down on that as well.

JV: I think on the employment lands, as I understand it, not just in Toronto, but in a number of municipalities, they are locked into a 20-year-old policy structure, which amazes me when you think about the fact that we are all talking about mixed-use complete communities. You have employment lands on a transit corridor and there is an opportunity to add mixed use to it. What are we waiting for? I think this goes back to the councillor’s comments that cities need provincial guidance. They need provincial direction. Let us be clear about it, as your local councillor is elected by the local residents. The local residents do not want to see towers in their communities. They are going to elect the councillor who says no towers in our community. That councillor has an obligation when they go to council to say I was elected to stop towers in our community, so the employment lands get mixed into that conversation.

When I hear council asking for provincial direction, what I am really hearing is council does not have the ability, politically, to make a good planning decision because local politics demand they say no, so, dear province, come and fix this for us. I think we fall into that trap. That is why getting rid of the OMB becomes a big problem because, now, the province is doubled down on local council making the planning decisions. We will wait to see how it all plays out.

On the appointments thing, we absolutely need a change there and need council to be honest about it. Some of those factory jobs are never coming back. Why are we keeping 200 acres of industrial park, an area that is not coming back for industrial use? It makes no sense.

AB: I think having a planning system that actually—I mean, we only look at the horizontal. We could probably have the same density as we have today in employment and add residential if we have been able to stratify that space, but, right now, we do not really have much of those tools. That is what we need from the province. We need them to say, okay, maybe we can do that because it is true; reality is that there has to be a balance between protecting employment lands, but a lot of the employment that we are bringing to the city actually wants to be in mixed communities.

In my area, I had a big gaming company that came to the middle of my community, not to the employment lands, right in the area where there were residences and the people could walk out and have a coffee. How do you protect that and start seeing that you need to create these protections not only on the land, but also on the strata and that is how you create some of these.

JV: On the Greenbelt thing, let me just be on record when I say that we have always supported the Greenbelt. It is not going anywhere. It needs to be protected. The issue, for us, has always been what are the priorities when we do future mapping on the Greenbelt? Our view is there are lots of opportunities within current city limits. You do not need to touch the Greenbelt, but you have got to get those city limits to work. That goes back to approvals. It goes back to employment land policies. That is what it goes back to. It is not a Greenbelt issue in terms of land supply; it is about city limits. There are lots of available opportunity. Who wants to get it done? Is there a council that is supportive of moving those things forward or not? Typically, they are not, or they are into the extraction game. You could do that, but we need Section 37, or we need affordable housing units, or we need something to make it work. That is just the extraction game that, whether we like it or not, is part of the process during every single day. That is your job.

I am on the policy side. God bless you. There is that piece. The last thing I would say is this. On inclusionary zoning, I would say this. I am going to give the province an F on inclusionary zoning because they came out with a set of policies that was about a partnership. Developer, you will have to provide; municipality, be a good partner and provide the incentives back. This is how the American model works. Then, the province walked it back and said the good politics are simply to give the keys to the City to figure it out for themselves. I am going to give the province an F. I am going to wait to see what the City does. I have been told that Cities are mature levels of government. They will make good decisions. Okay, let us see it. Now, is your chance. Show me you can make a good decision because it is very easy to give a planning approval to a developer on the planning merits, but if you really do not want that tower, then you can walk in and say, “Okay, developer, 80% has to be affordable units. Are you going to build that building? But, we gave you the approval. Are you going to build a building?”

CS: NO.

JV: We do not win. I think you have to wait to see how council wants to use this tool. Councillors who want to see things happen are going to make things happen. They always do. For the other 90% of council, it is just another tool to frustrate delay installing. I am always going to go back to housing supply and choice, whether it is townhouses in Rosedale or apartment buildings in Yorkville. People who do not want it will find a way to stop it. That is what we have to watch out for, now.

AB: I think that we could actually use inclusionary zoning to partner with the development industry, but actually have development and use it as an incentive to actually have development happening more in some parts of the city that, yes, that definitely needs it. It is a big city. There are different economics. We need to look at this as a big economic issue. It needs to work. When the minister did the announcement, I said, if we do not make this work, we are not going to get anything. This can be a feel-good policy, and it is going to be hard. I know it will be hard to have this conversation at council because there is always—we are having that conversation right now in laneway housing. It has been extremely frustrating because I am afraid that the policy is going to die by a thousand cuts. That is what we really need to be careful about. The same thing is going to happen with this inclusionary zoning. It is people understanding that if you do not create a policy that actually is going to produce and is going to continue to have a healthy development industry, we get nothing out of it because, if they are not successful and they do not build, we have nothing. We only get units when the project is going to be built, and it makes sense and people incentivize.

JV: We need 47 more councillors like Councillor Bailão on this issue. You all have a job tonight. Go find 47 more councillors.

CS: I will also mention on the laneway suite issue that Councillors Bailão and McMahon have been ex-lane. We know that there are a lot of political issues that Joe alluded to with who it is that ultimately elects councillors versus who it is that gets priced out of the city if prices continue to rise. We spent a lot of time on provincial politics. Unfortunately, we are running out of time, so instead of getting deep into the weeds on municipal politics, what I would like to do is take at least one or two questions from the crowd just to allow for anything that might be pressing out there to be answered by our panelists.

Questions & Answers

Q: Hi, I just had a question. I am from Interval House, which is a women’s advocacy group and shelter. It is the oldest shelter in Canada. Just putting that out there. It was about the inclusionary zoning aspect in terms of affordability. We are all aware that the rent in Toronto is astronomical, and new rentals are relatively at a standstill. Can you share an idea of what low-income people can or should do about affordability in the city, because the benefits by the city, right now, are really, really limited? I know that sounds like a ridiculous question a bit.

CS: That is a good question.

Q: What is something substantial that citizens and advocates can look into while people are suffering or while people are waiting or trying to find rentals?

CS: Sure. Short-term solution that has a real meaningful impact on rents.

AB: Let me say, the first thing is that inclusionary zoning is not going to solve the issue of shelters and very deep subsidies and low income. This is the perfect example that people hear one solution and think that is going to solve all the issues. This is where we have to think of a spectrum. You have to think of people and incomes that go from $15,000, which is the average of income in Toronto Community Housing. Families at Toronto Community Housing make an average of $15,000 a year. To be honest with you, $100,000, $120,000—and there is going to be different programs, and in some instances, we are going to have to stack programs. Inclusionary zoning will be helpful once we are able to get those units, and, then, hopefully, having a benefit, a housing benefit such that we can get some of the people from the shelters and such that there is a nonprofit organization or something that is working with some of these units. That is the only way. Inclusionary zoning—let us be honest—is not going to produce housing for people that make $20,000, $15,000, $30,000. People that are out there—and I know there are some out there that are trying to portray this image, but they are not being honest with you.

What we need to understand is that there are people from $15,000 to $100,000 that need programming, and we are going to have to, in many instances, stack these programs from different levels of government. That is why it is so important to have a coordinated approach, to have a national housing strategy, and to have a strategy where three levels of government are working together with the assistance of the development and nonprofit to make sure that we are channeling people in the right direction. That is the only way that we are going to do the shelters.

On the shelter issue, as well, there is about 10% of our shelter users that use 60% of our nights, which is the chronic homelessness. The only way you are going to deal with those issues is if you bring the healthcare system into the equation and build good, supportive housing because when you have the majority of the nights being used by such a short number of people, they need more than just a roof over their head. It is not the inclusionary zoning; it is not the housing benefit; you actually need the supportive services. For those people, you need another level of service. It is also thinking about the people. You have the homes. We need the stock, but it is thinking about the people.

I often say, as much as probably some people here would not agree with me, we will not find a solution out of this issue just building our way out of it, just building stock, but we will also not do it by subsidizing it.

It needs to be both, because for different people, you need different solutions.

CS: Anyone want to add anything to that before we wrap it up? That is time. We got to about 1% of what there is to talk about in the housing market, but I hope it was helpful and that you all kind of mull over some of these ideas as you go and vote June 7th. Thank you.

BJ: Thank you so much. There will be an opportunity to talk further about these issues in the period after the formal remarks. I would like to call on Paul McGowan, vertical leader of real estate, Teranet, to thank the panelists.

Note of Appreciation, by Paul McGowan, Vertical Leader of Real Estate, Teranet

Thanks, guys. On behalf of Teranet, I just wanted to thank everyone on the panel today—on behalf of not just us, but everyone in attendance today. We really appreciate all your insights and your perspectives on the future of the housing market in the GTA. I think that everything that you were able to share tonight was great, was insightful, and it really gives us a fresh perspective on what is happening, what we need to consider and how we can move forward in making the GTA a better place to live.

When I was listening to some of the comments, one of the things that resonated with me, personally, was really around the definition of success as a typical Canadian. I would say that I fell into that same pattern myself: “I need to get out of my parents’ house; I need to get a job; I need to get a house, and then I can start a family, and I can evolve, and I can grow.” I believe that is still strong in the market today, but, Ana, I think you pointed out as well how those social impacts play into the decision, not only for first-time homebuyers, but even for the aging population. I look at my parents, for example, and they live in a house that is far larger than what they need. There are multiple empty bedrooms in that place, but it is more of the social impacts that are keeping them there versus any of the financial aspects. It is sense of community. It is a sense of what I want; the inventory is not necessarily there. It really resonated with me—not just the issue of what the numbers look like, but what the social impacts are and the other data that is still missing out there that can really drive that forward.

Again, on behalf of Teranet, we are really proud to sponsor this event. I hope everybody here enjoyed the panel discussion as much as I did. Again, please, give our panelists a great round of applause for tonight.

Concluding Remarks, by Barbara Jesson

Thank you, Paul. At the Empire Club, we really pride ourselves on being in a position to bring issues like this to public debate, but we could not do it without sponsors. We are extremely grateful to our sponsors, Teranet and REALPAC, for making the event possible.

I would also like to thank mediaevents.ca, our online event space for live webcasting today’s event for thousands of viewers around the world. Thank you to the National Post, our print media sponsor.

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Finally, please, join us again soon at our next event, in one week’s time, on May 30th, with Premier Sandy Silver, the Premier of Yukon, at the Sheraton Hotel in Toronto. Thank you so much for joining us.

We look forward to further discussion.