Ontario's Growth Plan Changes
Since the beginning of the new year, numerous deregulatory reforms have begun to formulate under the PC party and that extends to urban planning and growth. Last week, the Ford government's vision for urban development continued to coalesce through newly proposed amendments to the 2017 Growth Plan for the Greater Golden Horseshoe. Although quite subtle in comparison to Ford’s original Bill 66 that would essentially open up the Greenbelt for development, new changes allow for looser density requirements for new greenfield development.
For many of the region's outer municipalities, density targets for new development have been halved. Under the existing Growth Plan (which was first enacted as a complement to Greenbelt legislation in 2005, and tightened in 2017), new development was required to create a minimum of 80 jobs or residents per hectare. For Brant, Dufferin, Haldimand, Northumberland, Simcoe, and Wellington counties, that target has been reduced to 40. More urbanized parts of the Golden Horseshoe; including Hamilton, Peel region, Waterloo and York, will now have a minimum intensification target of 60 per cent while developers in communities like Barrie, Guelph, Orillia and Peterborough will be required to provide 50 jobs or residents per hectare.
"Additionally, some small parcels of land outside of current municipal Growth Plan boundaries (including some farmland) would become open to development, further diluting the previous Liberal governments' gradual push for density."
Rules regulating development in the region's 'Employment Lands' are also subject to revision. Under the new regulations, municipalities will be able to use portions of their Employment Lands to build housing, although other Provincially designated areas will continue to remain protected for employment uses.
According to the government, the updated density targets will help spur more construction, bringing greater housing supply to the market and ultimately easing pressure on home prices. "We believe there are too many barriers standing in the way of creating housing and attracting investment in the region,” said Steve Clark, Minister of Municipal Affairs and Housing in a statement outlining the updated growth plan. More acutely, Clark argues that the tiered density targets acknowledge that "one size does not fit all."
Still, if the objective is to unlock the region's limited land to provide new housing, allowing low-density development that brings fewer homes to the market seems counterproductive in the long term. At best, the new regulations could urge supply gains in the short term, but at the expense of valuable land lost to suburban sprawl. By contrast, the previous target of 80 jobs or residents per hectare reflected a more urban and transit-oriented ethos.
The benchmark of 80 inhabitants per hectare was created to ensure a level of density that could support 10-to-15-minute bus service, hopefully diluting the Golden Horseshoe's dependence on the car which was both inefficient and not environmentally friendly. This is no longer the case. Compared to gradual density championed under the previous Growth Plan, the sprawl facilitated by newly loosened regulations has similarly negative environmental impacts, both in its up-front carbon costs, and in the automobile-dependent lifestyles that it all but imposes.
Yet, if the "open for business" ethos means creating an easier path for developers, more sprawl in outlying municipalities is met by more density closer to urban centres. Alongside the changes to greenfield density targets, the updated Growth Plan allows for more density around existing transit centres. New regulations more than double the maximum scope of 'Major Transit Areas' where density is encouraged: the previous radius of 500 metres is expanded to 800 metres (which is identified as roughly equivalent to a 10-minute walk). Bringing density to transit hubs — like TTC subway stops — will hopefully become easier.
Q4-2018 Land Insights
Bullpen Consulting Report
Depending on the measure of central tendency used to calculate growth, land values have increased by about 2% to 6% annually in 2018, below the rate of growth for unit prices, as developers are taking into consideration the higher development charges, higher construction costs, and the longer approvals process when evaluating opportunities. - Ben Myers
"Look for land values to increase by 2% to 3% again in 2019, as more developers take a conservative approach to underwriting given aggressive property rezonings are less likely in the post-OMB world, and the inevitable slower new condo price growth may not be there to bail out developers that pay too much for land." - Ben Myers
RECENT LAND SOLD
|202 & 204 St. Clair Ave W||0.23||$24.25MM||Altree Developments|
|801 The Queensway||0.70||$11.5MM||Marlin Spring Investments|
|119-123 Portland St & 502 Adelaide St W||0.23||$25.6MM||Minto Group|
|197 & 199 Church St||0.125||$20.72MM||CentreCourt Developments|
|45 Railroad St & 47 Mill St N||n/a||$9.86MM||Redwood Properties|
|4151 Kingston Rd||0.5||$3.35MM||Sunray Group|
*Sold by CFR
THE LAND GROUP
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LORENZO DIGIANFELICE, AACI
Broker of Record, Owner