The dark clouds and silver lining of the NIMBYs | REM


Low-level nimbus clouds (Latin: “rain”) producing persistent rain are thick and dark enough to block the sun and often bring torrential rain or snow. NIMBYs (not in my back yard) are ad hoc groups of residents who come together to oppose housing developments in their neighborhood. They share similar traits in many respects to nimbus clouds; but maybe with a silver lining.

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The government’s decades-long failure to provide housing to meet population growth has led not only to an unprecedented unaffordable housing crisis, but also to a dramatic widening of the gap between the “haves” and the “have-nots”. Little is said about how the rapid increase in housing prices led to a rapid increase in equity. Homeowners’ net worth has skyrocketed over the past two years, while renters have seen no similar benefits. However, you cannot blame the owners, investors or foreign buyers for this, despite the government’s misdirection.

The government created the cheap money supply to allow the “haves” to buy existing homes while passing debilitating legislation and adding significant tax costs that discouraged the building of new affordable homes.

About two-thirds of voters are single-family homeowners, while one-third are renters. Municipalities consider “community input” in their new housing approval and rezoning processes. The number of projects that have been derailed by community input has been so great that it is common to call these self-interest groups NIMBYs.

NIMBYs are a major source of housing unaffordability. The Ontario Association of Architects reported in 2018 that $193,000 is added to the cost of a 100-unit condo project for every month of delay and municipal delays are sometimes measured in years.

NIMBYs argue that multi-unit housing “will change the vibe of the community”, but that’s a euphemism for “doesn’t negatively affect the value of my property”. However, this train left the station more than 15 years ago. Municipalities should not be allowed by current law to host NIMBYs. Politicians recognized that (a) urban sprawl threatened the long-term availability and sustainability of our irreplaceable local food sources and (b) municipalities could not collect enough from each ratepayer to build and maintain infrastructure services. municipal. This last point is one of the main reasons why development costs have skyrocketed.

The solution was to increase the number of citizens living and working in each municipal hectare, called intensification or “densification”. Ontario has wrapped a “greenbelt” around major urban centres, severely restricting construction in these greenbelts through the 2005 Good Places to Grow Act. To date, no Ontario municipality has achieved its densification objectives and this failure is partly due to the NIMBYs.

To benefit from 24/7/365 municipal infrastructure services and reasonable property taxes, municipalities need to spread these costs over more people per hectare. This is the age-old rule of economy 101 of economies of scale.

Also, I haven’t found any formal, respected studies (as opposed to “fake news”) that provide evidence of housing depreciation due to densification (except bedrooms and social housing), but municipalities succumb to the influence of majority voters. In fact, I’ve read more than one study that proves that increasing housing density not only supports municipal infrastructure, but also increases local businesses and the local economy, provides a greater variety of amenities, and stabilizes municipal taxes that improve…everything.

“Affordability” is about money. Everything else is altruism or deviation. NIMBYism is also about money. Does a NIMBY’s right to maximum return on investment outweigh society’s need to provide housing, especially affordable housing for the less well off?

Ontario has a unique opportunity to capitalize on NIMBY’s dramatic increase in net worth. Second suites are the fastest, easiest and cheapest way to fill affordable housing in urban areas.

The main reason a landlord would open up their extra home space to a tenant is to offset their mortgage costs, so the business case is easy to appreciate. However, the legislation does not offer the same guarantee to owners that it offers to lenders.

Everyone knows what happens if a homeowner defaults on their mortgage. There is no discussion of ‘housing as a right’ or ‘security of tenure’. For some inexplicable reason, tenants, the media, and the government believe that tenants who don’t pay their rent should have legal rights that landlords don’t. Fairness in the market begins with fairness in law.

Landlords are giving up the financial benefit of a second suite due to the overwhelming financial and legal risks established by persecutory tenancy legislation that has lasted for decades, the catastrophic failure of the Landlord and Tenant Board, deliberate delays not written in hearings of above-guideline increases, zero percent rent despite 10 to 100 percent increases in operating costs, six to 12 month rent-free housing for non-paying tenants, and a plethora other disadvantages.

If the government balanced residential tenancy legislation and required municipalities with already established provincial legislation to dismiss NIMBY objections, thousands and possibly tens of thousands of second suites could open within a few years.

NIMBYs might oppose until they understand that their housing shortage induced appreciation values ​​would be replaced by higher appraisals from an income-generating source, better mortgage security, the option a suite for children or parents and a good old rental income in their pocket to offset mortgage payments. The community also wins with higher population density attracting more businesses and amenities, increased local economic prosperity, and more jobs. The government wins by spreading municipal costs over a broader tax base.

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