Despite downtown construction, Toronto has lost housing units over five years. A report tells us how

Nearly 40 per cent of Toronto’s neighbourhoods are struggling to keep up with demand for housing, reports the Fraser Institute, with the city reporting net loss of 7,195 units from 2016 to 2021.

Thestar.com
June 13, 2023
Clarrie Feinstein

Nearly 40 per cent of Toronto’s neighbourhoods are struggling to keep up with demand for housing as the city has reported a five-year net loss of 7,195 units, according to census data from 2016 to 2021.

A report from public policy think tank Fraser Institute found that while Toronto’s core is building at a rapid rate, construction of new housing in many neighbourhoods isn’t happening at a pace fast enough to meet demand.

Gaps left by apartments being razed or multiple units being converted to single family homes are just two reasons the city now faces a net loss of housing units, says report co-author Josef Filipowicz.

“There’s a phenomenon playing out here across Canada,” said Filipowicz, an independent urban policy specialist, “and Toronto is no exception.”

The report goes on to say the “acute shortage of housing,” is a problem nationwide with more than 26 per cent of urban neighbourhoods losing more dwellings over the five-year period than they’ve added, representing a cumulative net loss of 33,723 dwellings.

In some cases, large apartment buildings are making way for even larger buildings not yet constructed. Filipowicz points to the southwest corner of Toronto’s Yonge and Bloor as such an example. That neighbourhood alone, says Filipowicz, lost more than 700 units -- but likely to gain more with the new construction.

While there has been an overall increase in new residential builds over the five-year period, it’s happening in selective parts of the country, the report said.

More than 54 per cent of the growth in Canada’s housing stock between 2016 and 2021 occurred in existing neighbourhoods, rather than on undeveloped land. This process, known as “intensification,” allows more housing to be built in existing neighbourhoods.

“Slightly more than half of Canada’s recent growth in housing stock occurred through intensification,” the report said. “A little more than half of this intensification occurred in the fastest-growing five per cent of urban census tracts (neighbourhoods), suggesting a highly uneven pattern of growth in the housing stock.”

That means the majority of the development occurring in Toronto is in the downtown core and along public transit, especially close to Line 1 around Yonge Street and Eglinton Avenue, said Filipowicz.

“As soon as you look outside of the city’s core,” he said, “there’s a cliff edge where we see a significant drop of homes being built.”

Neighbourhoods such as the Annex and Cabbagetown have little intensification, as well as the suburbs such as Etobicoke, Filipowicz said. Part of the reason is restrictive zoning laws which limit the type of housing that can go up in certain neighbourhoods. Known colloquially as the “yellowbelt,” many neighbourhoods in Toronto only allow for development of single or detached family homes, Filipowicz said.

Because of this, cities can’t keep up with demand and it’s “important for growth to occur where there’s demand.”

To improve the housing crisis, Canada can boost supply by spreading outward by adding new neighbourhoods at the urban fringe, or intensify, which is the best path forward as urban centres experience the highest levels of demand, the report said. For example, the report points to a ground-level parking lot converted to an apartment building, or a single family home being turned into a triplex.

As Canada faces a housing deficit of millions of housing units, adjusting restrictive zoning laws is necessary to improve access to housing in urban areas, said Alex Hemingway, senior economist at the Canadian Centre for Policy Alternatives.

“When you exclude building more units in certain neighbourhoods you drive up the land prices in the few areas you’re able to build apartments in,” he said. “It also displaces people by dictating where they can live.”

Not allowing intensification in low density areas is a significant roadblock for high-demand regions to produce enough housing stock for Canada’s rapidly growing population, Hemingway added.

“People lucky enough to afford detached and semi-detached homes shouldn’t have veto powers on what type of development can occur in those high-demand areas.”