A Charter for Affordable and Equitable Gentle Urban Density

Housing affordability is a crisis across Canada, with all levels of government looking for solutions. Many municipalities are acting to end exclusionary zoning and are introducing programs and reforming policy to add Missing Middle housing to residential neighbourhoods. While some of these municipal programs aim to address certain regulatory and bylaw barriers—from parking requirements to fire safety regulations—we propose this charter to advocate for two elements missing from these efforts thus far: affordability and equity.

The Opportunity

Residential neighbourhoods composed predominantly of single-family homes occupy the majority of the land area in most Canadian city regions and offer an enormous untapped potential for adding new housing supply, cost-effectively and quickly, in locations with existing infrastructure and services.

Recent census data shows that many of Canada’s low-rise neighbourhoods are declining in population, as municipalities concentrate development in high growth nodes dominated by tall towers or push growth outward – creating “tall and sprawl.” Alternatively, Missing Middle housing could be added to these residential neighbourhoods within a range of options in between the detached house and the higher-scale condo or apartment building.

Retrofitting the “Missing Little”

At the lower end of the Missing Middle is the opportunity to add gentle density to a single-family home and optimize its single parcel of land. This could include converting a basement, retrofitting a garage, building a garden suite or laneway house, adding one or more units to a principal dwelling, and/or subdividing and converting a principal dwelling into a duplex or triplex or more. We believe it is possible to scale up this type of gentle density in low-rise residential neighbourhoods with the potential for 200,000 affordable new gentle density units [i] in Canada’s largest cities by 2030 to provide affordable ownership and rental housing.

Some Guiding Principles

Affordability & Equity

All levels of government deliberately adopt policies and measures to ensure that Missing Middle programs, in particular gentle density initiatives, address and target affordability and equity.

Affordable Ownership & Rental

Affordable Missing Middle housing programs facilitate and promote not only affordable ownership but also affordable rental – and potentially social housing.

Protection of Prices

Policies and programs ensure new units are protected from speculative market forces, lest they simply become additional unaffordable units.

Innovation: Technological, Financial & Social

To spur affordability and equity at scale, federal involvement and investment support municipal programs, facilitate alternative financing models, and encourage technological and social innovation and private sector participation.

Protect Communities & Minimize Displacement

Where building new housing supply requires upzoning, jurisdictions implement measures that proactively promote affordability and equity and discourage speculative building and displacement.

A Suite of Innovations for Affordable, Equitable Gentle Density

We propose new approaches to harness affordable gentle density with all levels of government playing a role. These policies, programs and innovations could include:

Municipal

  • Establish a National Housing Strategy-supported municipal gentle density program – a “one-stop shop” to provide experts and contractors so the homeowner can easily enter the program and not have to manage an expensive and confusing process. This could help transform zoning desk culture from punitive to supportive and develop an intermediary industry to manage the approval, development and rental processes for homeowners.

  • Develop replicable pre-approved designs to cost-effectively and quickly add suites to specific housing types – with the goal to simplify renovations and reduce the scale of construction. As housing typologies are often specific to neighbourhoods, municipalities can work with the architecture profession and contracting professionals to optimize ready-made plans and source materials.

  • Work directly with local trades and contractors, including working with under-represented and racialized contractor associations, in order to provide local benefits and enhance equity.

  • Automatically waive inequitable development charges (DCs), park levies, as-of-right permits, and approvals of CoA to level the playing field for affordable “missing little” gentle density.

  • Identify and reform related bylaws that could constrain the ability to add gentle density to a home. For example, address limits to driveway parking in suburbs that could restrict multiple families and rental units in single family homes.

  • Identify low-income, racialized or immigrant homeowners at risk of foreclosure who could stay in place with the rental income from secondary suites, and support their involvement in the program.

  • Develop an initiative for over-housed seniors which cost-compares the benefits of ageing in place and unlocking equity from their home and generating revenue via a gentle density project, to the alternative costs, benefits and disadvantages of taking out HELOC loans or downsizing and leaving their communities.

  • Work with the National Housing Strategy to set affordable rental rates in exchange for tax credits and sizeable construction grants for homeowners, without expensive loans, and explore other creative financial alternatives.

Provincial

  • Modify or design costs exclusively for single family homes to accommodate pre-approved designs.

  • Ensure Provincial Policy supports allowing up to 4 units or plexes in all residential neighbourhoods and single-family footprints.

  • Support existing and the creation of new prefab and modular construction companies to manufacture components designed for gentle density house conversions in order to optimize construction techniques and scale designs. The provincial government could support new, year-round safe jobs with regional factory production.

Federal

  • Dedicate resources to solve financial barriers to homeowner participation and uptake. In particular devise workable options to incentivize homeowners to enter a program that asks to generate at least one affordable (below market) unit. A federally-supported effort could work with municipalities to test and scale alternative no-interest, tax credits or other vehicles and benefits and other vehicles to make it revenue positive and beneficial for homeowners to generate at least one affordable unit while making the process worthwhile for them.

  • Support municipalities and non-profit agencies in the development of housing tenure options such as housing co-ops and co-ownership as well as appropriate financing models to enable alternative forms of tenure.

  • Examine the potential for gentle density projects to generate new, cost-effective social housing units within mixed-income communities. Currently, public housing investment focuses on constructing new apartment buildings, which are costly to build and take years to deliver. Gentle density offers an opportunity to generate and scale social housing more quickly and cost-effectively than conventional apartment buildings. Could federal funding via the NHS be redirected to generating social housing units from gentle density home conversions working with municipalities to set affordable rental rates in exchange for tax credits and sizeable construction grants for homeowners, without expensive loans, and explore other creative financial alternatives?

  • Encourage large institutions such as universities, hospital networks and crown corporations to create loan and technical assistance programs for their staff to build gentle density ADUs.

  • Work with banks, credit unions, Canada/public pension funds, CMHC and other financial intermediaries to expand financial counseling to include gentle density ADU financing.

All levels of Government

  • Build a public-private-nonprofit coalition to lobby and educate the Canadian public – homeowners to participate in programs and neighbours to support them!

References

[i] The calculation for this back-of-the-envelope estimate of an affordable gentle density target is as follows: In Canada’s eight largest cities (Toronto, Montreal, Calgary, Ottawa, Edmonton, Winnipeg, Vancouver, Mississauga, and Brampton), there are 1,375,095 single detached houses (according to the 2021 Census). The most optimistic estimate of the share of homeowners interested in adding units is 30%, so 412,528 lots. Estimating just one additional dwelling per lot, and targeting half to be affordable, yields 206,000 units, rounding to 200,000.

[ii] Based on a report by Urban Land Institute. Missing Middle Housing: Development Costs and Affordability: A Report for the Urban Land Institute Curnter Urban Leaders Program 2020. September 2020.