Could converting parking lots help the national housing crisis? Toronto is considering it

Toronto parking lots could soon become building lots as the city tries to find more land to address the ongoing housing crisis.

A proposal will be brought to city council this month that, if endorsed, would direct staff to look at what city-owned parking lots could be converted to housing. Toronto owns 300 parking lots with 130 of them deemed “suitable” for housing; 74 of those are near transit and would be the first ones looked at.

“The cities that we have need to change if we are going to accommodate our population growth,” says Mark Richardson of HousingNowTO, a group advocating for and monitoring the construction of affordable housing.

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Richardson argues the low cost of parking at many city-owned lots means Toronto is effectively subsiding parking over housing.

“You can park here for 24 hours for $10 dollars,” he says. “We can't afford to waste this land on those kinds of low value uses.”

This is not the first time converting parking lots to housing has been proposed in Toronto with previous plans met with considerable pushback by business owners, local home owners and drivers.

A current proposal to build a 34 unit housing complex on a current parking lot in Toronto’s Danforth area has some homeowners looking to sell before the project begins.

Christine Amory lives near the lot on a narrow street where many people do not have driveways, and rely on street parking. She says losing the lot will make the parking problem even worse.

“It’s a bit disappointing,” she says. “I understand the need for middle housing but it seems you are ‘robbing Peter to pay Paul’ by taking away parking.”

She says neighbours have been told they will have to deal with parking their cars three blocks from their homes -- a challenge for those with young kids -- or to use transit more often. Amory says Toronto transit is not an everyday option for many, including her, and likely won’t be until it has expanded to reach more parts of the city.

“It’s not where it should be for us to rely on it all the time,” she says of Toronto’s public transit infrastructure.

National crisis

Low housing inventory, record home prices and sky-high rent are all contributing to a housing crisis playing out across the country, forcing cities to get creative.

Calgary has approved the conversion of more than a dozen offices into residences, part of a project to address an office vacancy rate of nearly 30 per cent.

The city offers $75 dollars per square foot to owners willing to convert the space, with the goal of removing six million square feet of empty offices from the city's downtown by 2031.

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However, with 3.5 million new units needed by the end of the decade according to the Canada Mortgage and Housing Corporation, these solutions are a start, but cannot solve the crisis on their own.

“Parking lots look like low hanging fruit at first,” says Toronto councillor James Pasternak. “But there are some cautionary tales.”

Pasternak’s ward in northwest Toronto includes the commuter lot at Wilson station, which is slated to be turned into a community hub with housing, childcare, and community space. Like many large-scale projects, this one has been delayed many times, and four years after zoning approval, the project has yet to break ground.

One of the challenges with certain lots is that they are not serviced to accommodate an influx of residents.

“They have to have electricity, storm water, sewage all brought in and that could take years and years of upgrades,” Pasternak said.

He says he is not opposed to the idea of converting parking lots, saying the city needs to look at all options, but his advice is “parking lots if necessary, but not necessarily parking lots.”

Home prices

While increasing supply is one piece of the puzzle, experts say record home prices also need to be addressed.

“We really need to break this cultural addiction in Canada to high and rising home prices,” says Paul Kershaw, a policy professor in the School of Population and Public Health and the University of British Columbia.

He notes that even if home prices dropped 30 per cent, many Canadians would still not be able to afford one.

“No one thing will ever be enough,” he says when it comes to fixing the crisis. “But until we disrupt our expectation that housing should continue to rise, we are not going to find the solutions to remedy housing affordability because we are going to tolerate easy wealth windfalls.”

According to the Canadian Real Estate Association, home sales rose 3.7 per cent between December 2023 and January 2024, a sign that activity is increasing after the Bank of Canada raised interest rates 10 times in less than two years. An expected rate cut later this year could lead to an increase in home prices, especially in markets like Vancouver and Toronto where prices are still high.

A rate cut could also help with new housing starts, which are down nationwide, but up slightly in some markets including Toronto.