Why a compact city is a really dumb idea, especially for housing affordability

We hear our politicians endlessly banging on about housing affordability.

Then those same politicians bang on about building compact cities.

The result is only good for existing property owners and here is why:

A Globe and Mail article on April 25 cites Ryerson University research found that Ontario’s urban containment based growth controls have “spurred soaring increases in house prices in the Toronto region by limiting construction of new low-rise family homes…” This effect was predicted by a number of analysts when the program was being formulated more than a decade ago and has been associated with huge price increases relative to incomes in such widely distributed metropolitan areas as Vancouver, San Francisco, Portland, Seattle, Sydney, Auckland, Melbourne and others.   

According to reporter Janet McFarland, the Centre for Urban Research and Land Development report identified “’a marked mismatch” between the types of units completed and the types demanded, according to the report from the Centre for Urban Research and Land Development at Ryerson University in Toronto.” The report concludes that “The public discussion on the fundamental causes behind the rise in prices of ground-related housing (singles, semis and townhouses) in the GTA over the past decade by ignoring or downplaying the role played by the shortfall of serviced sites available to build new homes misses the only viable solution to dealing with deteriorating longer-term affordability – significantly increasing the number of new ground-related housing units built.

Over the 13 years of the Demographia International Housing Affordability Survey, Toronto’s housing affordability has substantially worsened, with median prices at 3.8 times median incomes in 2004 (before the growth controls were fully implemented) to 7.7 times in 2016. This measure, the “median multiple,” had changed little between 1970 and 2004, when land use regulations were more liberal in the Toronto area.

Without liberalization of the housing market to permit supply that meets demand (not only in numbers but also in preferred type of housing), Toronto can expect its house prices to rise even more. Already, Vancouver and Sydney, for example are more than 50 percent higher (at median multiples of 11.8 and 12.2 respectively).

Politicians love the idea of a compact city. Then they can hanker for crazy ideas like Central Rail Loops and other boondoggles.

The bottom line is this, compact cities constrict supply and then economics takes over and prices for land and homes rise accordingly.

They always fail to understand basic economics and none moreso than idiot socialists.

 

-New Geography


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story.  And when he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet.   Cam Slater doesn’t do quiet, and as a result he is a polarising, controversial but highly effective journalist that takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him.  But you can’t ignore him.

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