Op-Ed: What We Value

The Greenbelt and Growth Plans are meant to ensure long-term costs don’t place an unmanageable burden on our children. They do this by identifying and protecting valuable assets, such as water, farmland, and important ecosystems, which provide long-term value, and by directing growth to areas where infrastructure is more efficiently delivered and maintained. Together, these plans lay a prudent foundation for Ontario’s future health and prosperity.

The Greenbelt has been raised a number of time this election campaign. Most newsworthy, perhaps, was the video of Progressive Conservative leader, Doug Ford, promising developers that he would open up the Greenbelt, indicating this would be his approach to addressing housing affordability.

It has been touched on a number of other times as well, often in relation to the increased cost of living.

This has been directly, again with the land restriction/housing affordability connection. (There’s even been an astroturf campaign by developers promoting increased supply as the solution. Are you a #homebeliever?)

We’ve seen it referenced, also, indirectly, with arguments that regulation adds an unnecessary financial burden on home buyers, and with a study claiming that millennials pine for the suburban lifestyle of their parents. The subtext of this later one is, of course, the pent-up desire for continued sprawl-style development.

The rough alignment of these messages, which isn’t surprising given those putting them forward, point toward a market oriented solution.

Developers, untethered from burdensome regulation, will provide quality housing at optimal cost, and only in the amount necessary to meet demand, presumably coming from millenials.

For the market to effectively address these concerns, it should be pointed out, accurate information is required, and conversations to date regarding how we value the environment, as well as many other things in life, have been woefully inadequate.

Fortunately, the issue of housing affordability presents a perfect opportunity to consider this question.

The discussion regarding affordability has almost exclusively used a short-term or immediate value lens.

Put simply, these arguments state that the cheaper a house is to purchase, the more affordable it is. The one-time, up-front cost is all that is considered.

Indeed, this reflects one of the definitions which the Ministry of Municipal Affairs uses to determine what can be considered affordable housing, which is “housing for which the purchase price is at least 10 percent below the average purchase price of a resale unit in the regional market area”.

Long-term value, however, is equally, if not more, important, particularly if we’re concerned about the kind of world we are building for future generations.

Long-term value requires that we be prudent, that we take into account that which is currently available, and that we plan, with the best information available, to use it wisely.

Using resources without considering long-term value risks--scratch that--makes it likely that they will be wasted. The consequence of this is future generations are left with an impoverished world.

In terms of affordable housing, long-term value takes into account the life-time cost, also often called the complete cost, of living in a place.

The Ministry has another definition for affordable housing, which is, in fact, listed before the one noted above.

Stating that affordable is, “housing for which the purchase price results in annual accommodation costs which do not exceed 30 percent of gross annual household income for low and moderate income households”, it accounts for the cost of living over time, as a portion of income on an annual basis.

This is in stark contrast to the definition that provides only the one-time purchase price of a house as a value.

In addition to the cost of purchase, in other words, costs such as that required to travel to work, or to get the kids to school begin to fit into the picture.

Long-term costs aren’t as apparent at first glance, but they are there nevertheless, and they build over time.

What are the health costs of development that requires driving rather than walking and bicycling?

Will taxes increase to pay for infrastructure improvements required to deal with the impacts of climate change?

What will it cost to replace lost ecosystem services, which filter our water and air?

The more these costs add up the more they start to squeeze that 30 percent marker. How affordable is that 30 percent if additional costs stretch to 80 percent of that annual income?

The question of what is affordable, in other words, becomes, “what would you be willing to give up?”

Would you be willing to give up your health and that of your children?

Would you be willing to give up some greater degree of resilience with respect to severe weather events and the impacts of climate change?

Would you spend a little less money now, knowing it would lock you into losing far more in the future?

The market has a difficult time valuing long-term costs. Shareholders demand a return on their investment, and this too often causes long-term value to be sacrificed for short-term gain. The word that comes to mind is myopic.

As we go to the polls tomorrow, and as we engage with the next government of Ontario, let’s make sure we properly value our future.

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