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A Statistical Mystery: Diminishing Expansion of the GTA’s Built-Up Area at a Time of Surging Construction of Single-Detached Houses

By: Dr. Frank Clayton

August 8, 2016

A key objective of the Province of Ontario’s Growth Plan for the Greater Golden Horseshoe (the Growth Plan) enacted in 2006 is the curbing of urban sprawl.1 The Province’s proposed changes to the Growth Plan are intended to ratchet up the fight against sprawl by increasing the share of new housing to be built in the existing urban area of municipalities (which are mainly apartments) and by raising the minimum densities permitted on greenfield lands. The latter will reduce the amount of new ground-related housing being built, particularly single-detached houses, even more than under the existing plan.2 These additional restrictions, if implemented, will undoubtedly create more pressure on the housing market and lead to even higher house prices in the future.

There is no doubt that the Province’s land use planning thrust is to shift the supply of new housing away from single-detached houses to higher density housing, especially apartments. The Crombie Panel, for instance, defined sprawl as:

“…the expansion of human settlement outside central urban areas by creating low-density, car-dependent suburbs.”3

Single-detached houses are the predominate form of low-density housing.

This blog entry focuses on one of the main societal costs attributed to low-density housing development – the loss of farmland and other greenfield lands on the urban edge.

The base data for our analysis are taken from a recently released paper by Statistics Canada, The Changing Landscape of Canadian Metropolitan Areas. One of the topics of this paper is how the size of the built-up areas in Canada’s Census Metropolitan Areas (CMAs) changed between the years 1971 and 2011. According to the paper, urban built-up area expansion occurs when greenfield lands (e.g., land for agricultural use) are replaced with houses, apartment blocks, industrial parks, commercial strips, roads and parking lots.4

Toronto’s Built-up Area Expansion Declined Sharply in 2001-2011

The Statistics Canada paper found that the expansion of the GTA’s urban built-up area was stable at an average of approximately 3,600-3,700 hectares annually during the 1971-2001 decades.5 This was followed by a significant decline in growth to about 1,000 hectares per year on average in the period from 2001 to 2011.

The percent expansion of the total built-up area in the GTA declined from 21.5% in the 1991-2001 decade to 4.9% in 2001-2011.6 This decline is similar to earlier estimates made by the Neptis Foundation covering the larger Greater Toronto and Hamilton Area (GTHA), which found the rate of expansion for the built-up area fell from 26% in 1991-2001 to 10% in 2001-2011.7

The sharp decline in built-up area expansion during 2001-2011 was not the result of the Growth Plan being enacted in 2006. The impact of the Growth Plan was not felt until regional and local municipalities amended their official plans to be consistent with the Growth Plan which was done towards the end of the decade or even more recently.

Single-Detached House Completions Jumped by Over 40% in 2001-2011

The construction of new single-detached houses increased sharply at the time the expansion of the built-up area in the GTA was decelerating in 2001-2011. The number of newly completed single-detached houses added to the housing stock surged from an average of 10,968 units per year in 1991-2001 to 15,479 units in 2001-2011, an increase of 41.1%.  Completions of all ground-related housing units – singles, semis and townhouses – climbed a bit more – by 47.2%.

It is interesting to note that ground-related housing completions have declined steeply in the latest five years in response to a sizeable and growing shortage of serviced lots for single-detached and other types of ground-related homes.

How the Neptis Foundation and Crombie Panel Explain the Deceleration in Built-up Area Expansion in 2001-2011

The Neptis Foundation’s research and the Crombie Panel report addressed the decline in the rate of built-up area expansion in 2001-2011 but not within the context of the rise in single-detached house completions.

Neptis Foundation

The Neptis Foundation attributed the decline in built-up area expansion to private developers building more compact communities:

“This means that developers were already creating more compact communities, even before the Growth Plan.”8

It follows that developers must have been responding to the demands of the marketplace for more compact communities.

The Neptis Foundation report then poses a rather contentious question:

“This finding raises questions about whether the Growth Plan could have been more ambitious
with its targets for intensification and new development on greenfields.”9

It then answers this question affirmatively:

“This finding suggests the Plan could have been more ambitious in its intensification and greenfield density targets.”10

We suggest an equally cogent question to be asked given the private sector was creating more compact communities prior to the enactment of the Growth Plan would be:

Given the private sector was already creating more compact communities, could it be that the intensification and greenfield density targets in the growth plan were not required at all to achieve the results observed in 2001-2011?

Crombie Panel Report

The Crombie Panel report observed there has been a long-term trend towards smaller lot sizes. Still, the report appears to demean single-detached houses:

“Since 1986, there has been a long-term trend towards smaller lot sizes across the GGH, but many of the
houses built on those smaller lots are still detached dwellings in car-dependent suburbs”11

The report also notes, “…however, housing affordability remains a concern across the region”12 but does not make the linkage between restrictions on the supply of new single-detached houses and their affordability.

Despite the marked decline in the expansion of the GTA’s built-up area in 2001-2011, the Crombie Panel report concluded “. . . but we must step up our efforts to curb sprawl . . .”13

The Panel went on to recommend increased density targets for designated greenfield lands (Recommendation 14) and increased intensification targets (Recommendation 10). These recommendations are now part of the Province’s proposals to revise the Growth Plan.14

The Crombie Panel speculated on the future trend in built-up area expansion:

“If the trend for decreasing land consumption continues, it is likely that much of the land that has been designated to
accommodate forecasted growth to 2031 will not actually be developed by that date . . ."15

This is hypothetical only. No analysis is provided to support a continuing decline in built-up area expansion. Further, there is no analysis of the housing market impacts, especially affordability, of reducing built-up area expansion even more than what happened in 2001-2011.

Comment

The Crombie Panel’s recommendations aimed at reducing the construction of single-detached houses even more than under the existing Growth Plan, and the Province’s acquiescence of the recommendations, is based on incomplete research. Quantifying the factors leading to the large drop in the built-up area expansion in 2001-2011 from the previous decade (really three decades) should be a prerequisite to considering any such policies, especially when available data show that single-detached house construction actually surged over the same period. The impact of such policies on housing affordability should also be established.

How Can the Disparity between the Decline in Built-Up Area Expansion and the Surge in Single-Detached House Completions be Explained?

The trend towards more compact communities and shrinking lot sizes has its roots back in the latter 1980s so it is unlikely to be a primary cause of the noted changes during 2001-2011 compared to the preceding decade. In fact, it appears there was little change in average lot size for ground-related new housing during the decade. The explanation is not readily obvious but should be investigated before implementing policies targeted at reducing the production of new single-detached houses.

Questions the Province Should Be Asking Before Restricting Future Construction of Single-Detached Houses in the GTA Even More Than at Present

Right now the Province is proposing to impose further restrictions on the building of single-detached housing based on incomplete research and an almost single-minded pursuit of environmental objectives. There is a need for evidence-based research before such policies are implemented including researched responses to questions like the following:

  • How was the GTA able to significantly increase its supply of new single-detached houses in the 2001-2011 decade at the same time it sharply reduced the land required for built-up area expansion?
  • What is the likely requirement for new housing by unit type and neighbourhood typography between now and the year 2041 in the absence of the Province’s intensification and greenfield land density decrees?
  • What are the implications of these housing requirements for future expansion of the built-up area in the GTA?
  • How should these requirements by unit type and neighbourhood typography  be modified to accommodate realistic environmental goals based on an analytical framework which quantifies the impacts of the various housing types on the environment and, in turn,  the impacts of land use restrictions on housing affordability and choice?
  • How much greenfield land is required to accommodate the modified housing requirement forecasted, provide for uncertainty, choice and competition among developers by geographic sub-areas, recognizing that most new housing in built-up areas will be apartments?
  • What mechanisms should be utilized to ensure an ample short-term supply of serviced or readily serviceable land by housing type to meet anticipated demand (per Policy 1.4.1 of the current Provincial Policy Statement)?

Far-sighted urban land use policies must be based on solidly based research and a consideration of the major benefits and costs including economic and housing market considerations.

(1) The term “Greater Toronto Area (GTA)” as used here, refers to the Toronto Census Metropolitan Area (CMA) as defined by Statistics Canada. Toronto CMA encompasses much of the population, employment and economic activity generated within the larger Greater Toronto Area (GTA).
(2) Ministry of Municipal Affairs. (May 2016). Proposed Growth Plan for the Greater Golden Horseshoe, 2016. https://www.placestogrow.ca/index.php?option=com_content&task=view&id=420&Itemid=12 (external link) 
(3) Ministry of Municipal Affairs. (December 2015). Planning for Health, Prosperity and Growth in the Greater Golden Horseshoe: 2015-2041. http://www.mah.gov.on.ca/AssetFactory.aspx?did=11110 (external link) 
(4) Statistics Canada (March 22, 2016). The Changing Landscape of Canadian Metropolitan Areas. Pg. 8. http://www.statcan.gc.ca/daily-quotidien/160322/dq160322a-eng.htm (external link) 
(5) Note that Census of Canada data relate to mid years, i.e., July 1, 2001 and July 1, 2011.
(6) Using Statistics Canada data, FOR the combined Toronto, Hamilton and Oshawa CMAs the growth rates in the built-up areas in 1991-2001 and 2001-2011 were 22.1% and 5.0%, respectively.
(7) Neptis Foundation. (July 2014). Rethinking Sprawl: Challenges remain as new evidence shows Canada’s suburbs growing denser. http://www.neptis.org/publications/rethinking-sprawl (external link) 
(8) Neptis Foundation. (March 20, 2015) Understanding the Fundamentals of the Growth Plan.  (PDF file) http://www.neptis.org/sites/default/files/gp_primer/understanding_the_fundamentals_of_the_growth_plan_march20_0.pdf (external link) 
(9) Ibid. pg. 17
(10) Ibid. pg. 16
(11) Ministry of Municipal Affairs. (December 2015). Planning for Health, Prosperity and Growth in the Greater Golden Horseshoe: 2015-2041. Pg. 25. http://www.mah.gov.on.ca/AssetFactory.aspx?did=11110 (external link) 
(12) Ibid. pg. 10
(13) Ibid. pg. 26
(14)  Ministry of Municipal Affairs. (May 2016). Proposed Growth Plan for the Greater Golden Horseshoe, 2016. https://www.placestogrow.ca/index.php?option=com_content&task=view&id=420&Itemid=12 (external link) 
(15) Ministry of Municipal Affairs. (December 2015). Planning for Health, Prosperity and Growth in the Greater Golden Horseshoe: 2015-2041. Pg. 76. http://www.mah.gov.on.ca/AssetFactory.aspx?did=11110 (external link)