Bottom-up growth planning

Here’s how the Province of Ontario plans for growth.

First, they engage Hemson Consulting Ltd. to forecast population and employment growth. Hemson’s latest projections see Toronto’s population increasing from 2.9-million people in 2019 to 3.6-million people in 2051.

Second, they require that municipalities complete Land Needs Assessments (LNA) to estimate how much new land they need to start eyeing for new infrastructure and services.

Third, they require that municipalities then update their official plans to accommodate that growth.

All things flow from the population growth forecast.

Here’s the problem: population growth is not an independent variable. If we build no housing in Toronto between now and 2051, our population growth will be much lower than it is if we build 50,000 units per year. (We currently average ~20,000 units per year.)

The process is both backwards and circular, and an attempt at economic planning without the use of price signals. It’s economically illiterate.

(And obviously very frustrating to me.)

This is the same logic, by the way, that geographer Josh Gordon uses to claim that housing in Toronto and Vancouver is not supply-constrained, because it generally tracks population growth.

Here’s how the Province should plan for growth:

Radically liberalize land use rules for greater supply elasticity. Developers know where the housing is needed, and how much. Let them build it.