Business leaders warn turning employment lands into housing would be 'silent killer' of GTA jobs

In its attempts to make more land available for housing, Premier Doug Ford's government is threatening the viability of land where hundreds of thousands of people work, the Toronto Region Board of Trade says in a new report. 

The report, entitled The Race For Space, looks at what are called "employment lands" – areas exclusively zoned for factories, warehouses, offices, big institutional employers and commercial buildings.

The Board of Trade says the availability of employment land is "already under intense pressure" and it's concerned some of the government's new land-use reforms will drive down supply and drive up price, putting jobs at risk. 

"Low availability of suitable employment land is making it increasingly difficult for businesses to invest or expand in the region," the report says. "Policies that further erode the supply of employment lands will only make this problem worse." 

The Ford government is proposing significant changes to the policy that has guided land use in the Greater Toronto Area for the past 20 years that would make it easier for municipalities to convert employment land to residential use.

"If these measures all come into force as proposed, without clear policy guardrails, the province unintentionally risks imposing a significant constraint on the ability of businesses to invest, grow, and create jobs in Ontario," says the report. 

The report argues that there is no need to rush to turn employment lands into residential neighbourhoods.

While the province's Housing Affordability Task Force did not explicitly recommend putting housing on "employment lands" as a way to hit the government's target of 1.5 million new homes by 2030, it did point to "underused and vacant" commercial and industrial properties as a potential source of land for housing. 

Giles Gherson, president and CEO of the Toronto Region Board of Trade, says the loss of employment lands is a "silent killer" of jobs, sending businesses outside the region to where land is cheaper or more easily available.

'Classic supply and demand problem'

"We've traded a lot of these great, high-paying manufacturing jobs for service jobs," said Gherson in an interview. "We've got to protect the employment lands we have."

The report quotes research by the commercial real estate firm Colliers that puts the vacancy rate for industrial land at 0.3 per cent, the lowest in North America. Colliers says the average rental price for employment land has tripled since 2010.  

"It's a classic supply and demand problem," said Gherson. You squeeze the supply of something when there's still a lot of demand, and what happens is costs rise."  

A spokesperson for Municipal Affairs and Housing Minister Paul Calandra says the government is reviewing how to implement the housing task force's recommendations on underused and vacant commercial and industrial properties.  

"Ontario is taking a balanced approach that recognizes the importance of preserving employment lands while also increasing housing supply in existing urban areas, particularly near transit," said Calandra's spokesperson Alexandru Cioban in an email to CBC News..

The changes proposed by the Ford government are largely found in its Helping Homebuyers, Protecting Tenants Act, Bill 97, which was introduced in April. 

The reforms would scrap an existing ban on residential development on employment lands designated "provincially significant." The changes would also exclude commercial, institutional and office lands from being designated as employment lands. 

Changes 'likely to increase speculation': report

"These changes are likely to increase speculation on employment lands that currently do not allow housing," says the report.

Gherson describes it as "open season for conversions to residential."

The City of Toronto's chief planner reported in June that homes had been built on just 20 of 79 sites in employment areas that had been converted to allow housing since 2013. More than half of the remaining sites had already been sold by the landowner who requested the conversion, the chief planner found.

Employment lands home to some 1.5 million jobs in the region, including 88 per cent of the region's manufacturing jobs and 61 per cent of transportation and warehousing jobs, according to the report.