It’s late, but I’m still buzzing from the QDAR All-Candidates Meeting held tonight at the Legion! A good event. Being hosted by the Quinte & District Association of Realtors, the main topic of the night was housing. As a Realtor myself, it was familiar territory; but much of the language and policies that were discussed were not familiar to the entire audience – or even some of the candidates. Someone asked me to clarify some terms afterward, and suggested I do so here – good call! So here goes: some of the issues and policies that we gave 1-minute answers about!
We hear about “affordable housing” all the time, but it isn’t always clear what that means. There are three approaches to “affordable housing”:
- The Market approach: sometimes when people talk about housing being “affordable” they mean on the low end of the current market. This is a terrible metric for “affordable” housing, because the market as a whole can be entirely unaffordable (as it is now).
- In relation to personal income: the official metric of whether or not housing is affordable is if it costs no more than 30% of household income. For many people, housing in Brighton costs more than 50% of their household income each month; for people on social assistance, it can cost more than their entire monthly allowance, which is why they need subsidized housing.
- Subsidized housing: often “affordable housing” refers to subsidized housing programs, which are actually called Rent Geared to Income (RGI) units. These are housing units (usually apartments) subsidized by Northumberland County. There are a few of these units in Brighton; the waitlist to get one is ~5 years.
There are a lot of reasons that housing is expensive, so there are also a lot of ways to make it cheaper. None of them is a silver bullet. Some things that can be done at a municipal level:
- Build smaller, higher-density units. An apartment building can fit dozens of apartments in the same space as a few bungalows, and the cost per living unit is MUCH lower. Even a semi-detached home with basement suites can fit 4 units in less space than two bungalows, while staying in the “low density” category. This is already happening: developers in Brighton are taking these steps, sometimes voluntarily and sometimes at the requirements of the municipal Planning department. But there’s enormous pushback to even medium density, as residents don’t want higher traffic or more crowded neighbourhoods. We need to recognize that the cost of bungalows with big yards is that housing remains expensive.
- Build secondary suites. This is already possible in all residential zones: anyone can have a basement suite or convert their garage to a housing unit. Having trouble paying for your mortgage? Consider renting out your basement; it helps your bills, and your tenant’s. And secondary suites in homes owned by the primary resident is much preferable to a home with two units both owned by an investor who doesn’t live there. There’s a Community Improvement Plan in progress that would create financial incentives for people to build legal suites – please do!
- There was a lot of talk about tiny homes tonight, and that word needs to be unpacked a little bit. Not all tiny homes are significantly cheaper! It often gets used to refer to any home under 800 sq ft, and as small as ~200 sq ft. Homes of this type are thoroughly designed to get the most use out of the space, are often highly efficient and cheap to maintain, and because of their small footprint they might someday be useful for increasing density. One candidate raised his voice about the need to change the rules to make this possible, but that’s already under way: our current Planner has already removed a minimum footprint from most zones, and is working on getting rid of minimum sizes altogether. The only part that’s still missing (in my opinion) is to allow them as secondary suites on the property of existing homes. Right now you can convert your garage or basement (not both), but you can’t have a tiny home in your backyard.
This is the term that prompted someone to ask me to write this. A “Brownfield” is a property that has been developed in the past, but is not currently developed, usually because of environmental contamination. Think of the notorious empty lot downtown, that used to be a gas station; or the overgrown lot on the east side of Prince Edward Street, just south of the tracks, that used to be a chrome factory. These properties can’t be used for any other purpose until they’ve been remediated. Doug LeBlanc has a company that remediates soil, right here in Brighton, but it’s up to the owners to clean it up. Brighton has started a Community Improvement Plan (CIP) to create financial incentives for Brownfield remediation, and I hope that we’ll see those properties used for more than shortcuts soon!
Greenfields didn’t come up tonight, but it’s relevant. A Greenfield is a property that has never been developed. Our Planning department is currently writing a Secondary Plan that will determine the best uses of the Greenfields within Brighton’s built boundary. That’s important, because the provincial government requires that we use up the land inside our built boundary before we build outside of it.
Municipal Land Transfer Tax
When you buy real estate in Ontario, you pay provincial Land Transfer Tax. It’s included in the transaction, along with a host of other fees calculated by real estate lawyers. Because it’s calculated and charged as part of the transaction, and especially because most transactions include financing, it’s somewhat hidden: 1-2% (for most homes), spread out over a 30-year mortgage, isn’t always significant to the homeowner. It’s also somewhat progressive: being a percentage of the purchase price, with purchases under $55k charged at 0.5% and properties over $2M charged at 2% or more, those who can afford more are charged more. First time home buyers also have their LTT capped to reduce the negative impact on buyers (folks who have just sold a house can theoretically afford it).
In Toronto there’s also Municipal Land Transfer Tax (MLTT), which is more or less identical to the provincial tax – so it doubles the LTT. A few municipalities have tried to follow in Toronto’s footsteps in order to raise more revenue, but it’s never popular to propose a new tax!
The reality is that municipalities are very limited in their ability to raise revenues. They’re also limited in their ability to take on debt, and they’re not allowed to run a deficit – all reasons why municipal councils are notoriously conservative. Tonight there were several candidates who talked about keeping taxes low, or even reducing them, but keeping services the same or better. As I said in my closing statement, we can have whatever we’re willing to pay for: if we want better roads and a pool and affordable housing and faster municipal response times, we need to think about where that money will come from.
As much as Land Transfer Tax is progressive and relatively affordable because it’s included in a mortgage, it would be more affordable still if it were charged as a “windfall tax”. This is similar to what Generation Squeeze has proposed: a surtax on real estate that is paid when the property is sold, rather than when it is bought. They propose a type of wealth tax on real estate, calculated annually but deferred until the sale of the property so that it comes out of the profit. This is particularly relevant in a rapidly rising market like the one we’ve had for the past few years.
IF we get to a point where we desperately need municipal revenues so badly that we’re willing to look at a municipal land transfer tax (MLTT), I would recommend that it follow this pattern of being paid by the seller rather than the buyer; or to be split between them.
This topic stumped some of the candidates – it’s a little niche. The gist of it is that all of Brighton is divided up into “zones” in which only certain types of development are allowed. R1 zoning only allows single-family detached dwellings and duplexes; R2 also allows semi-detached dwellings; and so on. R1 is “exclusionary” in the sense that it prohibits a lot of different types of buildings. Likewise, there are zoning categories for agricultural, commercial, and industrial properties that regulate their use.
Exclusionary zoning used to be the norm, and is still prized by those who feel that a neighbourhood should have a particular “feel” or appearance. Some neighbourhoods even have restrictive covenants that require all homes to conform to a certain style and colour scheme. These types of neighbourhoods are not as popular as they once were, and Planners are recognizing that there’s a lot of benefit to having mixed-density, mixed-use neighbourhoods. Imagine a neighbourhood where you can live, work, and shop, all without having to drive anywhere! Where some of your neighbours live above a shop, and others live in an apartment building across the street, and half a block down there are semi-detached homes and townhouses, while just a block or two away there are single detached homes. These types of neighbourhoods are dynamic and diverse, and more socially and economically sustainable.
While Brighton’s Official Plan still has exclusionary zoning, we’re moving toward more mixed-density, mixed-use planning. The latest approved development on the west end of town will have over 500 units, but of those only 26 will be single-detached homes, of which 11 will have pre-built secondary suites. The rest will be semi-detached, row housing, apartment units, and commercial. We can have this type of dynamic neighbourhood with our current Official Plan, so I don’t see a need to further overhaul zoning. Where exclusionary zoning is problematic is when it is used to prohibit increased density, which often results in creating exclusive, “rich” neighbourhoods – i.e., really expensive homes! All of the candidates tonight seemed to embrace the notion that we need more density to make housing more affordable (with one exception, who moderated his support for density with concern about losing the small-town character of the community), so I’m not worried that we’ll turn around and push out any hope of density. We’re headed in the right direction, and the old thinking about exclusionary zoning is on its way out, in practice even before we can abolish it. That’s a good thing.
Municipal Land Bank
One policy that Mark Bateman mentioned tonight that excites me is a Municipal Land Bank. Land Banking is when someone buys land now with the intention of developing it in the future. This is a normal part of development in many places, including here in Brighton; virtually all of the land inside the built boundary of Brighton is already owned by one developer or another, just waiting to be built into new neighbourhoods. There has been a push in some places to make land banking illegal because it is being abused: someone will buy valuable land and sit on it, waiting for it to appreciate before selling it at a huge profit without adding any value to it. That’s not what’s happening in Brighton, but I could see how it is very problematic in some places where that’s occurring.
A municipal land bank would involve the municipality buying important land for future development in line with our priorities – whether that means affordable housing, or a new recreation complex, or industrial park expansions, etc. It has often struck me that the notorious brownfield on the corner of Elizabeth and Prince Edward should be bought by the municipality, remediated, and built into something that is in the interests of the entire community. (Right now it’s listed for rent, as “to be built” restaurant space. I’d cringe to see a restaurant there; I’d love to see a 4-6 story building with commercial and/or public space on the ground floor, a mix of affordable and market units above, and maybe even some luxury penthouse suites on top. A building worthy of the central intersection of our town!)
As part of the Northumberland Affordable Housing Strategy, passed by our Council back in 2019, we agreed to identify, purchase, and donate land to the County for them to build affordable units. We were supposed to build 4-6 units each year to catch up to the demand for affordable housing. In that time we’ve built zero such units, donated no land, and the cost of housing has about doubled. We need to do better, and municipal land banking can be a way to help do it. I want to follow up with Mark about that idea.
I hope that clears up some of the terminology that was used at the meeting tonight! (Or…last night. Time to go to bed!) Let me know if you have any questions or thoughts, and if I missed anything!