What do we want? Upzoning! When do we want it? Now!

To be efficient and fair, our development policies must respond to changing consumer demands, particularly the needs for more affordable housing in walkable urban neighborhoods. That will require upzoning (allowing more compact housing types and higher densities in existing areas).

Housing construction is booming downtown, where there is a forest of tower-cranes, but highrise apartments don’t meet everybody’s needs, particularly families with children that need moderate-priced housing. Most residential neighborhoods are increasing housing supply far less than the city’s 1.5% annual population growth rate, as indicated in the map above. This is a primary cause of rising housing prices.

What is the solution? Upzoning for compact infill!

Infill means, for example, that a 100′ x 100′ parcel that currently has one house becomes three to six townhouses, or two such parcels are assembled to allow a 15-30 unit low-rise apartment. Victoria is full of such Missing Middle housing, such as the lovely example illustrated below.

Nine-unit, three storey apartments at Chester and Hilda streets.

 

Victoria has many smaller developers that want to build moderate-priced infill, but can’t find suitable land. More than two-thirds of developable land is zoned “Traditional Residential” (see below) which only allows two stories, limits densities, and requires large setbacks and off-street parking. As a result, the few parcels of land zoned for infill development command a premium.

Victoria’s Official Community Plan (OCP) designated many area for multi-family housing, but the zoning codes have not been changed. As a result, developers require rezoning, which drives up land prices, and adds costs, time and uncertainty to infill development.

Most of Victoria’s neighbourhoods are zoned “Traditional Residential” (indicated in yellow in this map) and exclude more compact and affordable housing types.

 

If we want more affordable housing we need a more competitive market for infill-approved land, with five to ten parcels for sale for each infill development we want to occur. Only by upzoning large areas can small developers find affordable land for infill.

Without an abundant supply of suitable parcels, most infill benefits  will be capitalized into land values, making existing property owners and land flippers wealthy, but driving up housing prices and reducing developer profits, and therefore their incentive to build. By upzoning land, the market for infill parcels becomes more competitive, reducing land inflation, increasing development and ultimately increasing affordability.

For example, to meet Fernwood’s target of adding 75 housing units annually, that neighborhood will need about ten parcels (assuming 7.5 townhouses or apartments per parcel), which, to temper land prices require 50-100 suitable parcels on the market each year. Since a typical parcel is only listed for sale about once a decade, this requires 500-1,000 parcels zoned for infill.

If you want proof, visit Montreal, an attractive and economically successful city where housing prices are far lower than in Vancouver, Toronto and Victoria. Why? Because Montreal zoning allows and encourages compact infill development (see below).

Recommended Policy Reforms:

  • Pre-zone all parcels designated for multi-family in the OCP.
  • Allow an additional story for corner lots, lager lots (each 1,000 square meters of lot size), and location on busier roads (subarterials).
  • Eliminate or reduce development fees and approval requirements for smaller (under 20 unit) and moderate-priced (under $600,000 per unit) projects.

Key message: grow up Victoria! Upzoning residential areas is the key to more affordable infill.

 

For More Information:

Cherise Burda and Mike Collins-Williams (2015), Make Way For Mid-Rise: How To Build More Homes In Walkable, Transit-Connected Neighbourhoods, by the GTA Housing Action LabPembina Institute and the Ontario Home Builders Association.

Alex Cecchini (2015), Barriers to Small Scale Infill Development, Streets MN.

Spencer Gardner (2017), The 5 Immutable Laws of Affordable Housing, Strong Towns.

Sanford Ikeda and Emily Washington (2015), How Land-Use Regulation Undermines Affordable HousingMercatus Center at George Mason University.

Legalizing Inexpensive Housing, Sightline Institute series which examines how public policies can support more affordable housing development.

Austin Maitland and Nolan Gray (2018), How Zoning Is Holding Your Neighborhood Back, Strong Towns.

Dan Parolek (2014), Missing Middle Housing: Responding To Demand for Walkable Urban Living, Opticos Design/Missing Middle.

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