Free Zoning to Build More Homes
Julie Di Lorenzo
Goals
Canada must transform how we zone and approve new housing to prioritize growth over obstructive policy and restrictions. Instead of a system designed to block development and preserve the status quo, we need processes that encourage building homes quickly. By creating focused accountability and targeted incentives, Canada could:
- Increase national housing starts by 50% within five years
- Reduce average approval times for multi-family buildings by 60% by 2030
Background and Motivation
Housing in Canada has become impossibly expensive. In major cities, families spend half their income on housing, leaving less for education, healthcare, and building a future. Young Canadians delay long term commitments and starting families because they can't afford enough space, while businesses and fundamental institutions struggle to hire talent as workers can't afford to live near job centers.
The root cause isn't a shortage of land or capital—it's a regulatory system engineered to prevent new homes from being built. In most Canadian cities, it remains illegal to build anything but single-family homes on the majority of residential land. Toronto reserves 70% of residential land for detached houses1 while Vancouver restricts 76% to single-family homes2. This artificial constraint on supply drives prices skyward. It also reflects institutional amnesia when many established neighbourhoods once were filled with duplexes, triplexes and six-plexes later converted to single family as neighbourhoods gentrified.
Even when multi-family housing is theoretically allowed, the mechanics of the approval process “kills” projects through bureaucratic hurdles causing extensive delays. Canada ranks second-worst in the OECD for building approval times3. The average housing development takes 2-5 years to approve in major Canadian cities4.
The consequences are devastating. Since 2000, home prices have grown over 400% in Toronto5 and at similar rates in Vancouver6. In these markets Canadians now need to spend 28 years or more of their full income to afford a home, compared to 5-7 years in the 1970s7.
This crisis affects our entire economy. Businesses report growing difficulty attracting talent to high-cost cities. Research shows Canada loses approximately $1.25 billion annually in economic output because workers can't access high-productivity regions due to housing costs8.
The federal government's $4 billion Housing Accelerator Fund (HAF) recognizes but inadequately addresses Canada's housing crisis9. Targeting just 100,000 new units, the program has struggled with delayed implementation and uneven outcomes. Critics highlight its insufficient oversight mechanisms, with municipalities facing limited accountability for effectively directing these funds toward meaningful supply increases10 . This approach fails to tackle the fundamental regulatory barriers constraining housing supply when comprehensive, decisive action is urgently needed.
The solution starts with a fundamental shift in approach: creating systems that prioritize growth over restriction. By establishing municipal Housing Growth Ombudsmen, standardizing building approvals, and rewarding cities that build more homes, Canada can unlock housing supply.
Real-World Solutions
New Zealand enacted comprehensive zoning reform in 2021, requiring cities to permit at least three homes on virtually all residential lots11. As a result In 2022, New Zealand permitted 9.7 new housing units per 1000 residents, a 45-year high that was nearly double the rates seen in the US12. By setting national standards while allowing local implementation, New Zealand demonstrated how higher levels of government can successfully drive housing transformation.
Japan uses a zoning system focused on simplicity with basic requirements around building size and nuisance prevention rather than restricting housing types13. This approach has kept Tokyo's housing prices stable for decades despite population growth. A typical Tokyo home costs about 7 times the median income, compared to as much as 15 times in Vancouver. Japan proves that reasonable regulations focused on building standards rather than arbitrary density limits can support abundant housing supply.
Minneapolis became the first major North American city to eliminate single-family-only zoning in 201814. This allowed duplexes and triplexes by right throughout the city. Following implementation, Minneapolis saw an increase in housing permits in previously restricted neighbourhoods while experiencing more moderate price increases than comparable cities. Their success shows that North American cities can successfully implement zoning reform with positive results.
Toronto's "Two Kings" initiative, implemented in 1996, transformed two former unproductive industrial districts by removing restrictive single-use zoning in favour of flexible "Regeneration Areas"15. This policy eliminated most density and height restrictions while enabling mixed-use development and adaptive reuse of existing buildings. It caused sustainable economic regeneration on multiple levels including hospitality and small business opportunities while crystalising housing for a generation allowing more people to stay in Toronto’s urban core. In the Western side of the project alone the population grew from just under 1,000 residents in 1996 to over 2,000 in 2001, more than doubling in just five years. By 2023, the area was home
to over 30,000 residents16.
What Needs To Be Done
Implement a comprehensive Growth-Focused Housing Strategy that leverages federal powers to drive reform at all levels of government.
Create Housing Municipal Growth Ombudsmen in major centres. Establish a requirement that all cities and towns with populations over 100,000 must appoint an independent Housing Growth Ombudsman with the power to fast-track housing approvals. These ombudsmen will have authority to override local restrictions when projects meet standard regulatory and safety and infrastructure requirements. When development proposals are stuck in review for more than 3 months, the Growth Ombudsman can provide notice of a review time frame audit, and if progress is not made within 30 days, unilaterally approve the application directly if they follow simplified mandatory federal standards. This program will be tied to infrastructure funding with penalties for municipalities that fail to act. For example, a project cannot be held back at the discretion of an opinion of an authority because of a discretionary and unilateral urban design obligation.
Amend the National Housing Act to establish national zoning standards. Revise the Act to include defined minimums for residential density near transit and job centers. The National Building Code will be updated to also include model zoning standards permitting fourplexes and small apartments in all residential areas. These standards will serve as conditions for federal housing initiatives, access to mortgage insurance, and related programs, creating powerful incentives for provincial adoption.
Launch a National Building Code Modernization Initiative. Develop updated national model codes that streamline requirements, standardize approvals across jurisdictions, and incorporate innovations like single-stair mid-rise designs. The primary focus will be simplification to reduce the amount of regulation while incorporating of initiatives that could reduce construction costs, and increase livable space while preserving safety standards17. CMHC in collaboration with Code Regulators, will create a kit of massing models that would be pre-approved under this new code.
Forge a Housing Growth Agreement with Ontario and British Columbia. Our biggest problems with getting housing built are in ON and BC. Negotiate formal agreements under the Federal-Provincial Fiscal Arrangements Act to align provincial policies with national housing goals. These agreements will include provincial commitments to override restrictive municipal zoning, streamline environmental reviews for urban housing, and implement transit-oriented development mandates in exchange for increased federal funding.
Reform CMHC mortgage rules to support gentle density. Update lending guidelines to facilitate financing for small apartment buildings, secondary suites, and co-housing arrangements. In addition, restore CMHC funding for strata-title apartments combined with other uses such as condominium and office providing access to different viable business models. These changes will make it easier for homeowners and small developers to create multiple units on existing lots, supported by simplified financing products designed for small-scale intensification.The restoration of strata title options, allows for some units to be constructed as part of other types of development instead of present CMHC rules that exclude residential apartments from mixed use strata title.
Establish a Build More Homes Data Initiative. Launch a public dashboard tracking key housing metrics for every major city, including permits issued, approval times, and housing starts relative to population growth. This transparency will create accountability and allow citizens to compare their city's performance against peers. Municipalities whose metrics show significant improvement will be eligible for federal recognition and priority access to infrastructure funding.
Implementation could begin immediately with Growth Ombudsmen pilots in three major cities within the first six months. National zoning standards can be published within one year, and all programs operational within 18 months. The Housing Dashboard could issue its first quarterly report within nine months.
Common Questions
Won't increasing density destroy the character of established neighbourhoods? Experience shows that gentle density like fourplexes and townhomes can blend seamlessly into neighbourhoods when thoughtfully designed. Countries like Austria and the Netherlands maintain beautiful, historic communities while building sufficient housing at all price points. Our focus is on allowing a wider variety of housing types, not mandating high-rises everywhere. Remember many established neighborhoods were already plexes that were re-converted to single family homes.
Isn't this federal overreach into municipal affairs? We're respecting jurisdictional boundaries while using legitimate federal tools—infrastructure funding, mortgage rules, and fiscal transfers—to create powerful incentives for reform. Municipalities retain control over implementation, but with accountability for outcomes. This approach mirrors how Canada successfully partners with provinces on healthcare and education. Some cities like Toronto, have area specific political governance models where local constituents have power over broader initiatives that benefit the City – our pre-approved models and initiatives will provide a way to maintain city wide goals.
Won't developers just build luxury housing that remains unaffordable? When supply is restricted, developers naturally target the highest end of the market. Research consistently shows that permitting more homes at all price points stabilizes costs across the spectrum. New construction and innovative re-use helps everyone by reducing competition for existing homes, and our program specifically incentivizes a range of housing types.
How will these changes impact existing homeowners? Current homeowners gain new property rights and options while maintaining stable communities. A family could add a garden suite for grandparents, split their home into a duplex for rental income, or sell to someone who will build gentle density—all while neighbourhood services and amenities improve through modest growth.
Conclusion
Canada's housing crisis demands immediate, decisive action that prioritizes growth over restriction. By establishing Housing Growth Ombudsmen with real authority to cut through delays, setting national standards for zoning and building approvals, creating “kits of as of right approvals” and rewarding municipalities that build more homes or increase the unit count, we can unlock housing supply while respecting local character. These reforms will increase housing starts, make more efficient housing forms, dramatically reduce approval times, and put homeownership back within reach for the next generation. This isn't just about housing—it's about restoring the Canadian dream of opportunity, security, and prosperity for all.
Indicative Legal Changes
