Land supply not to blame for rising home prices: Study

TheSpec.com
Oct. 5, 2016
Tess Kalinowski

Some developers and economists have said the Greenbelt and the provincial Plan are partly to blame for the Toronto region's soaring home prices.

But the first comprehensive, independent analysis of how much land is still available for development shows that there is no land shortage pushing the cost of housing higher.

In its study released Wednesday, the non-profit Neptis Foundation, a non-partisan research group, found that only 20 per cent of the land that was designated for building when the Growth Plan was implemented 10 years ago has actually been used.

"We're here to put the facts on the table and say, there is no constraint from the Greenbelt or the Growth Plan on the land supply," said Neptis executive director Marcy Burchfield.

"We're not in an argument with the development community. They're part of who are building our region. It's just — let's get past the argument of land supply — that it is being constrained by our policies — because that's just not true," she said.

The foundation is releasing its research in an environment that Burchfield described as "ripe for misinformation," as the province prepares to update its 2006 Growth Plan early next year.

Some developers want Queen's Park to limit municipal population and employment density targets, and extend the area that can be used for urbanization, called the Designated Greenfield Area (DGA).

But the Neptis research shows that 80 per cent — 45,660 hectares of the land that has been approved for urbanization in the Greater Toronto Hamilton Region — is still available for building, easily enough to last the region to 2031, and likely well beyond that, said Burchfield.

Municipalities have already designated much of that land — known as the Designated Greenfield Area (DGA) — for single family dwellings, semis and townhomes, she said.

Neptis found that 45 per cent of the land that has been developed in the region in the last decade was in three municipalities, Brampton, Vaughan and Milton.

"Even so, these three still have plenty of land to build on — about 15,700 hectares, or 35 per cent of the remaining DGA land supply in the Greater Toronto Hamilton Area," says the Neptis brief.

Other municipalities, including Oakville, Whitby and East Gwillimbury, have barely touched their supply. Pickering has almost 3,000 hectares left in the Seaton area.

Burchfield said other factors such as municipal approvals and market shifts may be contributing to home prices.

"There are certainly more condominiums going up," she said.

"The hope is that you have a diversity of housing out there," said Burchfield.

The Neptis data is information that the province should have been gathering centrally since it implemented the Growth Plan in 2006, she said.

"Instead we had to take three years to do that. The province never required that information to be delivered up the chain," said Burchfield.

Municipalities collect the information on how much land is designated for servicing but they don't necessarily release that information publicly. Some want to avoid pressures from developers or other interests.

A recent study by the Ryerson City Building Institute and the Ontario Home Builders Association recommended municipalities change their zoning and development charges to help builders create more affordable housing options such as mid-rise, family-sized condos that are close to transit.

Land that is designated for development is typically more valuable even if the plan doesn't call for it to be immediately built up.

A July report from the Building Industry and Land Development Association (BILD) showed new homes, not including condos, had risen more than $100,000 in the previous year.

It has urged Queen's Park to go slow on implementing changes to the Growth Plan until the impacts can be assessed. BILD says the effects of the policy are just starting to show in housing supply and prices. It is also urging the government to do more consumer education about the plan to intensify the region's urban areas.

Toronto region land supply

• 56,540: Hectares designated for development in the Greater Toronto Hamilton Area between 2006 and 2016.
• 10,800: Hectares of land that were built on in the last decade.
• 10 per cent: Rate of urban expansion in the Toronto region, down from 26 per cent when the Growth Plan took effect.
• 1,379: Inventory of new low-rise homes available for sale in the Toronto area, compared to 16,560 in June 2006

Neptis Foundation and Building Industry and Land Development Association (BILD)