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The long-term solution to Canada’s housing crunch is to build a lot more homes – and to build those homes on vastly underutilized land in city centres.

In recent decades, cities chose to sprawl. Small bits of land are allocated to tall buildings, while suburbs expand endlessly. That is expensive growth: It can cost more than double for a city to service a suburban home compared with an urban one, from police and fire to water and sewers.

Vancouver last week took a small step to open up where new housing can be built. The city is a perfect example of tall and sprawl. The downtown peninsula, crowded with condo towers, garnered the nickname City of Glass. It is surrounded by a sea of detached houses straight out of the 1950s. Most of that land, like in other cities, was basically a no-grow zone.

The result is that half the land in the City of Vancouver is gobbled up by just 15 per cent of the homes, according to city hall.

This is the opposite of good planning. Schools end up half-empty in older neighbourhoods, as is the case in Toronto, while fast-growing new neighbourhoods, such as the Olympic Village near downtown Vancouver where midrise buildings were allowed on old industrial land, don’t have an elementary school after more than a decade.

These artificial constraints have decoupled the price of housing from the broader economy. Scarcity of homes combined with a growing population and a long era of low interest rates rocketed housing prices into the stratosphere. Adjusted for inflation, the Canadian economy grew by about 50 per cent over the past two decades, while housing in the Vancouver and Toronto regions, also adjusted for inflation, surged by at least three times that rate (and that includes the recent sharp decline in home prices).

The ideal policy solution is a big shakeup: scrapping outdated restrictive zoning rules so that many new homes of all types can be built across cities – quickly. This would end interminable approval processes, such as rezoning, where existing owners oppose change. The owner of a house does not own the neighbourhood, nor should they have a veto over what is built near their house.

The buzzword is “missing middle” housing. It’s the right idea but its meaning is a wide range, from two or four units of housing on lots currently reserved for one- to four-storey apartment buildings. As the housing crunch has worsened, cities like Vancouver and Toronto have warmed to the missing-middle slogan – but are still overly cautious. There remains, for one example, a deep reluctance or flat-out refusal to consider apartment buildings with homes of two and three bedrooms for families in neighbourhoods of detached homes.

This was on display last week in Vancouver: a move forward, but a timid one. Planners, following the direction of council, presented the idea to allow more housing in older neighbourhoods across the city, four or six homes per lot, by this time next year. “We’re not using our land efficiently or effectively,” a senior planner said. Mayor Ken Sim called the plan “awesome.”

To be sure, it’s the right direction – more housing – and the right philosophy – housing throughout the city. But it’s incremental; apartment buildings remain consigned to busy streets. This modest increase is dubbed “gentle” density.

Gentle might have sufficed a decade ago, but not today. One Vancouver city councillor was right to call it “a very small step.” Canada is already way behind in housing supply, with a below-average per-capita number of homes among OECD countries, and as the population surges, cities will fall even further behind.

Other places such as Edmonton, Victoria and Toronto are moving in a similar direction as Vancouver, and in each case progress is slow. Toronto may be the most promising. After several years of study, Mayor John Tory got a new template approved at city council last month. Citywide changes aim for “more permissive” zoning for new homes, from major streets and areas near busy commercial stretches to neighbourhoods. Details are being drawn up and are slated to be released in March.

The key will be the scale of the ambition. The good news is that cities, from Toronto to Vancouver, are at long last ready to loosen decades-old zoning restrictions. But this is not the time for half-measures or gentle density. The debate about how to get new housing built has gone on for years. It is time for an overhaul. No-grow zones need to be abolished.

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