Real Estate News

OREA report addresses affordable housing issue with the use of surplus land

Ontario is one of the most expensive regions to live in the country and the need to build more affordable housing has been well established. The latest OREA report addresses this issue.
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A report released by the Ontario Real Estate Board (OREA) yesterday shows that the Ontario government is making headway in using surplus land for affordable housing.  But it also indicated they could do more with it.

Ontario’s affordable housing problem is well understood. According to 2016’s Census, 27.6% of Ontario residents used more than 30% of their income in housing costs.  This easily crosses the threshold into “cost burdened” home ownership. In fact, the Census reveals that the province has the highest share of households living in non-affordable housing compared to the rest of the country. The one exception is BC.

Affordable housing a key issue for most Ontario municipalities

Most major cities in Ontario, not just those lying in the Greater Toronto Area are also struggling to meet their subsidized-housing needs. Toronto, Ottawa and Hamilton report 98,000, 10,000 and 6,860 households respectively are on waiting lists for subsidized homes.

The report defines surplus public land as land that’s either vacant or underutilized.   Also, it is no longer essential for the creation and distribution of government goods and services. The government can choose to sell these lands at market value to raise funds.  Or it can sell the land below market value in exchange for affordable housing. The 3rd option is to lease the land to developers and/non-profits in exchange for the construction of affordable homes.

Government addressing issue of affordable housing

The government made several proposals to improve the “missing middle” housing inventory.  It  relaxed its residential density laws and definitions of residential and commercial zones.  But there’s still a great need for homes for lower-income families. OREA’s report focuses on how the government can use public surplus lands to ease the province’s housing challenges.  It specifically addresses that demographic.

Ontario’s government identified 234 pieces of land in December 2018.  This land totaled 14,600 acres that the government can sell at market value over the next 4 years.  And we can use it to provide much-needed housing and long-term care facilities.

Recent examples of surplus land being used include the $36-million sale of a parcel of land that includes 26 Grenville St. and 27 Grosvenor St.

Steve Clark, Ontario’s minister of municipal affairs and housing, states that the sale of that surplus land is evidence that the government is committed to taking the affordable housing problem head-on.

“We are giving this unused land a brand-new purpose and bringing much needed rental and affordable housing to Toronto’s downtown core,” Clark said in a news release.

“We will continue working with our municipal partners, non-profits, home builders and other experts to build more housing near transit and services so that everyone can find a home that meets their needs and their budget.”

What else can we do?

The report says that there’s still much the government can do to increase the housing supply by means of those surplus lands. The OREA report made several suggestions.  One was to create a province-wide inventory of surplus lands.  Another was to identify under-utilized lands by crown corporations that we can use to create mixed-use communities.  And finally, allow municipalities to decide whether it’s best to sell the land at market value, or below market value.  All, of course, in exchange for additional affordable housing.

Misael Lizarraga
Misael Lizarraga

Misael started as an English teacher in Mazatlan, Mexico but his passion was in real estate. Now, he works with a handful of clients reporting on real estate news from across the world under his primary business: realestateguy.com