The Solution to the Affordable Housing Crisis: Surplus and Underutilized Lands

Surplus land could be the solution to our affordable housing crisis.

Ontarians are likely familiar with the affordable housing crisis our province is currently facing, with the highest share of residents living in unaffordable housing, second only to British Columbia. We’re seeing 27.6 per cent of Ontario households spend more than 30 per cent of their income on housing, which is the benchmark of what’s considered “affordable housing.” Despite these shocking figures, there is currently a significant amount of government-owned properties that could be used for affordable housing. Habitat HM believes the government needs to be making more persistent efforts to accelerate the process, so we can start tackling this crisis.

There are currently 6,000 government-owned plots of land that could be redeveloped into affordable housing, finds a recent report by Ryerson University’s Centre for Urban Research and Land Development. The report was commissioned by the Ontario Home Builders’ Association (OHBA) and the Ontario Real Estate Association (OREA).

These properties include surplus and underutilized land.

Surplus and underutilized land

Surplus land includes spaces that are either vacant or no longer needed to deliver government goods or services.

Underutilized land is any government-owned property that is in use, but that has the potential for much more productive uses. An example of this type of land is surface and underground parking lots or LCBOs.

Traditionally, the government handles surplus land by selling it off to the highest bidder. Given the current state of affordable housing in Ontario, we recommend that they now sell the land below market price to developers who will construct affordable housing (like Habitat HM).

“The Province of Ontario, the Federal Government and the City of Toronto are the three largest landowners in the GTHA (Greater Toronto Hamilton Area),” said Tim Hudak, OREA CEO, in a statement.

“With the dream of home ownership slipping out of reach for too many Ontarians, it’s time that the Government and its agencies stopped sitting on surplus and underutilized land. Freeing up even part of this empty land can make a huge difference for affordable housing options for Ontario families.”

The report’s four recommendations

The report made four key recommendations to expedite the process of constructing affordable housing on government-owned surplus and underutilized land.

1. Identify and take inventory of these lands across Ontario (including Crown corporations and government agencies like the LCBO and school boards).

2. Ensure that the land sold to private and not-for-profit builders is used to develop affordable housing (and that it remains affordable for residents). 

3. Assist municipalities in weighing the costs vs. benefits of selling the land at market value, compared to selling it below market value to support affordable housing.

4. Set aside some of the gains from market value sales of land to be used for affordable housing projects.

A win-win for government and Ontarians

The sale of these lands to support the construction of affordable housing is a win-win scenario for both the government and residents of Ontario.

By selling this land, the government will save millions of tax dollars in maintenance costs. This includes saving tax dollars wasted on maintaining plots of land that are vacant.

The government will also benefit from the construction of more affordable housing.

Subsidized housing waitlists in Ontario are constantly growing, with more than 100,000 households on Toronto’s waitlist. Using these plots of land to build affordable housing will help trim down these waitlists.

Additionally, individuals who live in unaffordable accommodations (or don’t have a place to call home) put pressure on social services. This would be lessened with more affordable housing options.

On top of Ontarians benefiting from an increase of affordable housing, money accrued from the sale of these lands, as well as tax dollars saved on property maintenance, will mean more funding that can be delegated to other services to benefit residents.

Looking to the future

In December, the Ontario government announced they were committing to speeding up the sale of these plots of land, committing to put 243 properties back into productive use over the next four years. They estimate that their new process will remove 150 days of administrative time. 

Habitat HM is hopeful that we will start to see these types of lands become more available, so we can get to work constructing affordable housing within our communities.

Recently, the province sold a plot of underutilized land to make way for affordable housing. The government-owned property is located in downtown Toronto and currently holds a low-rise parking garage and a vacated building. It was sold for $36 million and will save the government $260,000 annually in maintenance costs.

As part of the deal, the developer that purchased the land is required to construct a building with a minimum of 700 rental units, 30 per cent of which will be for affordable housing.

Here at Habitat HM, we pride ourselves on constantly redefining what’s possible. While this marks a step in the right direction, we hope to see the government more aggressively pursuing a solution to Ontario’s housing affordability crisis.

There are two key ways that Habitat HM’s involvement in developing this land would generate more affordable housing. 

First, if our organization were to partner with the for-profit companies purchasing this land, Habitat HM would be able to own and operate a share of the housing units, ensuring its affordability and making the commitment to executing affordable housing easier for these corporations. This would also ensure that individuals gaining access to these affordable housing units are hardworking and highly-deserving families within our local community. 

Second, if the land went to Habitat HM directly to develop, we would be able to maximize the potential of this land in its ability to serve affordable housing needs. Whereas the land in Toronto will see 30 per cent of the units meeting affordability criteria, 100 per cent of the units built by Habitat HM would be affordable housing

With more surplus and underutilized lands becoming available for purchase, we’re optimistic that the government will keep the goal of increasing affordable housing at the centre of their decisions. Habitat HM is excited to continue its mission of maximizing our impact to expand affordable housing opportunities within our community, taking the percentage of affordable homes built on these lands from 30 to 100 per cent.

Check out our current build projects to see how we’re expanding affordable housing within our community.

By: Olivia Kabelin