The astronomical cost of housing in Canada’s urban centres is a key driver of growing suburban sprawl. Many would-be homeowners “drive until they qualify” for a mortgage. They end up driving up to three times more than urban households and spending twice as much on transportation (and hampering economic productivity). The trend is expanding carbon footprints and exacerbating the housing crisis.
Canada is committed to spending an unprecedented $85 billion on housing and public transit over the next decade: more than $70 billion to meet critical housing needs through the National Housing Strategy (NHS) and $15 billion for public transit. Together with the $13 billion the federal government has already spent on transit since 2015, this will be the biggest transit investment in Canadian history.
The NHS provides grants, low-cost loans, tools and research to improve housing security and quality for one million Canadians – including building 160,000 new homes. During the election campaign, the Liberals’ Housing Plan called for 1.4 million homes to be built, preserved or repaired, and their proposed $4-billion Housing Policy Accelerator calls for 100,000 new “middle class” homes by 2025. While both the National Housing Strategy and the Liberal Housing Plan note transit-oriented development as a priority, more robust policies and incentives are needed to achieve location efficiency.
And in order to maximize the returns on these investments to address the twin crises of climate change and housing affordability, the federal government must place land use and location at the centre of its housing and carbon-reduction plans.
All levels of government must also seize this moment for the one-third of Canadians who live in unaffordable dwellings. Improving public and policy-maker understanding of how land use impacts housing affordability and carbon emissions from transportation will be key.
Housing and transportation account for the vast majority of household carbon emissions. Moves toward net-zero buildings and electric vehicles are essential. But green tech is not enough – we must also drive less. Just as we need deep energy-efficiency retrofits for our buildings, we need to retrofit our cities and suburbs to make them more location efficient.
Location-efficient, “15-minute” neighbourhoods are designed for pedestrians and include a mix of land uses so that people can safely and conveniently walk to jobs, stores, services and parks. “Smart growth” policies focus new development in 15-minute neighbourhoods and link them together along regional transit corridors and bike networks. People drive half as much in compact, transit-oriented areas because destinations are closer together. Car trips are shorter, more trips are practical on foot, by bike or on public transit – cutting carbon emissions in half.
In the Greater Toronto Area, 81% of home buyers would prefer to live in walkable, transit-friendly neighbourhoods but can’t afford to. Households in location-efficient neighbourhoods can meet their daily needs with one car instead of two, saving $8,000 to $15,000 annually.
Carbon and household cost savings are among the many economic, community and environmental benefits of smart growth policies – including better health, a higher quality of life, more customers for neighbourhood businesses and protection of habitat and farmland.
This is a win for municipal governments, as well. Smart growth costs billions of dollars less in infrastructure than sprawl because it allows for more people to be served by fewer roads, tracks, pipes and wires. Developers don’t pay for the full costs of the offsite infrastructure required to support new suburban development, and municipal tax coffers are responsible for covering significant operating, maintenance and replacement costs. On the other hand, compact development can produce significantly higher municipal tax revenues.
Smart growth costs billions of dollars less in infrastructure than sprawl because it allows for more people to be served by fewer roads, tracks, pipes and wires.
For the past 75 years, government policies have incentivized car-oriented, single-family neighbourhoods. Traditional neighbourhoods with bustling sidewalks and active main streets have become expensive because today’s market under-supplies walkability. As this pent-up demand grows, location-efficient housing commands higher prices – and that dynamic drives gentrification of established neighbourhoods that displaces or further disrupts the lives of Black, Indigenous, racialized and low-income communities.
The urgent and obvious solution is to increase the supply of affordable housing in accessible locations, providing a range of “missing middle” multifamily housing to meet diverse economic and social needs. From duplexes and triplexes to mid-rise apartments and secondary suites, this new supply must be affordable to lower-income and middle-income renters and homeowners.
We need to build and retrofit more “15-minute neighbourhoods” where people can access almost everything they need on foot, by bike or by transit. We do that by adding in missing components to existing neighbourhoods – be they sidewalks, shops, housing or parks, and planning new neighbourhoods around transit stations and designing them for pedestrians.
We should also consider ownership and sharing models that save money, cut carbon and improve quality of life. Shared walls in multifamily buildings reduce heating demand, car and bike “sharing” reduce total kilometres driven, and common rooms in apartments and co-housing cut costs and strengthen community.
Here are three steps the next federal government can take to increase the supply of affordable, location-efficient housing:
1. Federal policies must be part of the solution and not the problem. A key step will be for the federal government to apply transportation affordability and location-efficiency lenses to housing and public transit programs to identify conflicts and opportunities for better alignment between the two. This should be supported by increased research funding on location efficiency, such as through the Canada Mortgage and Housing Corporation’s Housing Supply Challenge.
2. Provide technical and financial support to increase municipal capacity to plan, implement and evaluate location-efficient solutions – in coordination with provincial authorities. To do this, the federal government should enhance programs run by the Federation of Canadian Municipalities (FCM) that support land-use planning, active transportation, public transit and sustainable and affordable housing (and FCM should better align them to generate efficiencies and multiple benefits).
The government should also develop planning and evaluation tools to assess the full costs and benefits of different urban development futures, including a Canadian version of the U.S. Housing + Transportation Affordability Index. This calculates total costs of housing plus transportation for specific locations, illuminating the affordability benefits of efficient locations. We must support the development of affordable housing on underutilized public land near transit hubs, develop best-practice guidance on channelling revenues from commercial development to support affordable housing and enhance public space, and develop guidance on how to integrate secondary suites and laneway housing into residential retrofit programs to generate income to support deep efficiency and affordability.
3. Provide financial incentives and establish performance criteria for federally funded projects to deliver transportation and housing affordability and carbon reduction. For example, municipalities that receive federal transit funding should be rewarded for enhancing 15-minute neighbourhoods and for increasing affordable housing. Performance incentives could also be incorporated into infrastructure funding agreements with provincial governments. In early years, municipalities could receive technical support to plan for transit-oriented development, active transport, and affordable housing and be rewarded for performance. Over time, these practices would evolve into the new normal.
The time has come to build the homes of tomorrow in a smarter and more equitable way by making location efficiency a top policy and spending priority of the federal government when it comes to climate, housing, transportation and infrastructure.
Carbon down. Community up.
Steve Winkelman is executive director of the Ottawa Climate Action Fund.