Far from being a luxury, resilient, low-carbon homes are essential for family-friendly affordability in Canada, says a new report from the Smart Prosperity Institute that shows policymakers how to deliver on that imperative.

Cutting development charges, legalizing and supporting livable housing density, and encouraging efficient floorplate designs are among the recommendations offered by the Four Pathways to Housing Affordability report, produced by Smart Prosperity’s PLACE Centre.

Drawing on the Blueprint for More and Better Housing, published in March by the Task Force on Housing and Climate, the Four Pathways report shows how climate-friendly housing policies can directly reduce the “five key shelter costs” that make up more than 40% of middle-class Canadians’ household budgets:

• Mortgage payments and rent (16.5% of average household budgets);

• Transportation costs (16.3%);

• Utility bills (3.7%);

• Property taxes (3.4%);

• Insurance and maintenance (3.0%).

The report divides the policy clusters into four pathways.

Pathway 1: Making homes more affordable by reducing homebuilding costs

This pathway would cut the cost of building homes by lowering the per-unit cost of land, cutting red tape and development charges, and investing in innovative construction methods.

Ways to lower land costs per unit include getting rid of unit maximums on residential housing and parking minimums for all types of properties.

“The goal of this pathway is not to lower or subsidize the per-acre cost of land,” the authors say. “Rather, it is to allow builders and developers to use land more efficiently, thereby reducing the amount of land needed to build a home.”

This in turn will encourage development of “family- and climate-friendly neighbourhoods,” the report says.

Cutting red tape and development charges won’t just make housing less expensive overall, the report says they’ll help overcome obstacles to building climate-resilient homes and make it possible for low- and medium-income families to buy or rent those houses.

“Because permitting timelines are longer for infill and more dense forms of housing, this leads to a cost disadvantage to building more climate-friendly homes,” the report notes.

The authors cite Vaughan, Ontario as community where all the development charges currently on the books would add more than $157,650 to the cost of each new apartment.

To encourage the scale of building that would reduce construction costs, governments need to invest in innovations like factory-built housing, the report recommends. It cites tax credits as a key mechanism to accelerate that kind of innovation.

Pathway 2: Legalize Building in Convenient Places

Tacking transportation costs and property taxes together, Pathway 2 recommends regulatory changes at the municipal level to allow “more building in convenient locations.”

To reduce transportation costs for households, governments should change zoning bylaws to allow small-scale retail in residential areas and give priority to locations that are walkable and easily accessible by public transit.

Legalizing deeply livable density will also lighten property tax burdens by reducing the cost of infrastructure and using it more efficiently.

“Overwhelmingly, losses occur in very low-density neighbourhoods, as cities must spend substantial amounts of money building and maintaining roads, water and wastewater infrastructure while collecting very little revenue,” says the report, citing municipal “profit and loss mapping exercises” conducted by North Carolina-based Urban3.

Pathway 3: Boost Efficiency to Slash Utility Bills

Utility bills consume nearly 4% of the average Canadian household budget. Pathway 3 guides policymakers to changes in government regulations that support building more energy-efficient homes.

Encouraging—rather than preventing—efficient floorplate design would allow builders to incorporate things like passive solar heating and cooling, as well as energy-efficient landscaping.

Another plus would be removing regulations that thwart the generation, storage, and sale of onsite energy.

Financial incentives for households to use energy-saving devices like heat pumps are also a key element of this pathway.

Pathway 4: Build Better Homes in the Right Places

This pathway recommends using climate resilient materials—like mass timber rather than lumber—to reduce repair and maintenance costs on housing.

To ensure that building happens “in the right places,” governments should make “accurate climate hazard maps publicly available.” They should also protect natural ecosystems like wetlands that can help buffer human communities from climate impacts like flooding.