Want to make housing affordable? Let downtown homeowners divide their lots

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Millicent Wong
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Intensification has many advantages, but also many critics

Publication date:

February 18, 2022 • 4 days ago • 3 minutes read • 8 comments A duplex is being sold in downtown Toronto. More housing could be created in city cores by allowing homeowners in single-family areas to convert their homes into two-family homes or to subdivide an existing lot into two lots. A duplex is being sold in downtown Toronto. More housing could be created in city cores by allowing homeowners in single-family areas to convert their homes into two-family homes or to subdivide an existing lot into two lots. Photo by National Post

Housing experts, including the Ontario Housing Affordability Task Force, are increasingly agreeing that a massive increase in construction activity is needed to counter soaring home prices.

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For inspiration, provincial governments could do worse than emulate California, which also faces chronic affordability problems. Recent laws there aim to motivate local governments to facilitate new construction through intensification in already built-up areas.

Last September, California Gov. Gavin Newsom signed Senate Bill 9, which would allow homeowners in single-family counties to convert their apartments into two-family homes or to subdivide an existing lot into two lots to build two-family homes on each, resulting in four homes replacing an existing leads detached house.

The new law requires California local governments to focus new development on built-up areas, which is preferred over greenfield developments that cause a loss of green space or prime farmland.

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The advantage of intensification is that existing infrastructure, such as public transport, water supply and sewage, is used more efficiently, especially where there is latent capacity.

Greenfield developments, meanwhile, require additional infrastructure investment in roads, sewers and pipes to enable new urban development. At first glance, intensification is cheaper than building on vacant land.

California’s newly enacted law combats NIMBYism by allowing ministerial approval for qualifying land and housing, thereby precluding any discretionary review or hearing by local government agencies. Such projects are also exempt from the California Environmental Quality Act.

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Without these “right” development frameworks, proposals for intensification are often rejected or delayed by current residents and local government officials.

The law contains some qualifying restrictions. Project sites must be in urban areas and not on environmentally sensitive or prime arable land. Designated affordable housing, rental units or apartments with rent control are not taken into account in order to prevent the loss of rents and affordable housing stock. And local authorities reserve the right to reject a proposal if there is a written determination of the resulting adverse public health and safety impact.

If the lots are divided into two parts, each parcel must be at least 1,200 square feet and no less than 40 percent of the original lot size. The resulting apartments must have a floor area of ​​at least 800 square meters. In addition, the original owner must provide an affidavit that they intend to use one of the units as their primary residence for at least three years.

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Similar policies are already in place in places like Vancouver, where contiguous lot owners can sell their properties as potential building lots to developers who can then replace single-family homes with condos. However, the realized success and potential of these intensification measures are often less than what they promise.

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A review of the earlier version of California’s law by the Turner Center for Housing Innovation at the University of California, Berkeley found that the new law offers modest improvements over what was already permitted under existing laws.

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The review found that of California’s 7.5 million single-family lots, 6.1 million were eligible for intensification. A subset of 410,000 parcels were marketable, of which 110,000 parcels (representing 1.5 percent of single-family parcels) became eligible under the new law.

The latest report from the Ontario Housing Affordability Task Force proposes similar ministerial approvals to address the single-family zoning in much of Toronto. An analysis similar to that of the Turner Center could be helpful in identifying the potential for intensification under different scenarios.

But even with legislation disarming those who resist intensification, the potential for new housing developments could be limited due to many’s innate desire to live in low-rise single-family homes.

A shift in consumer preferences toward smaller homes in desirable, amenity-rich neighborhoods is needed for intensification plans to be successful.

Murtaza Haider is Professor of Real Estate Management at Ryerson University. Stephen Moranis is a real estate industry veteran. They can be reached at the Haider-Moranis Bulletin website.

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