London considers opening up more land for residential development in city’s rural areas

In the midst of a housing crisis, city council will consider expanding the areas where residential development is permitted by adjusting a boundary line in place to stop urban sprawl.

However, there isn’t agreement about how much more land is needed.

A Land Needs Assessment Report prepared by city staff estimates the Urban Growth Boundary (UGB) should be adjusted to add 1,130 more hectares of land for residential to accommodate population growth for the next 25 years.

Whereas a Housing Supply Marketplace Analysis performed by independent consultant Colliers estimates 2,000 hectares of additional land will be required over the same timeframe.

“What's interesting is the proposal to add 2,000 hectares requires provincial approval to violate their own policies to approve it,” explained Former City Councillor Sandy Levin who has been keeping tabs on the UGB Review. “It will be well over 30-years worth of supply based on the estimates.”

London’s Urban Growth Boundary (Source: City of London)

Levin supports thoughtfully expanding the boundary to include properties close to existing sewer and water infrastructure.

He warned that over-estimating the amount of land needed could put unnecessary financial pressure on city hall to extend servicing in the future.

The London Development Institute (LDI), a lobbying organization made up of local developers, argues the Colliers report better estimates future demand.

“If we really want to provide housing at an affordable level, what do we need to do? That’s what the economic report [by Colliers] did,” explained Mike Wallace, Executive Director of LDI. “It looked at the land that's available now and land that’s needed. It's come up with about 2,000 hectares, which is still a thousand hectares less than what we as an industry think.”

“In the short term, will it make any difference to the housing supply? And the answer is no,” responded Levin. “Ultimately, a question to council is what will it cost to service all these lands to build the new housing?”

Wallace emphasized that before properties brought inside the Urban Growth Boundary could be developed, they would still require planning approval from city council.

“There is no risk to the city by adding hectares that could be developed over the next 25 to 30 years,” Wallace said.

Source: DonFord1/iStock via Getty Images Plus.

Levin believes the housing demand estimates are artificially high because the analysis is based on population projections provided by the Ontario Ministry of Finance.

The current permanent resident population is estimated at 497,200 and rises to 721,100 in 2049.

“The estimates are based on a relatively unbelievable starting number, that there are half a million people in London, and that immigration will continue to be high,” Levin argues.

Adjustments to the Urban Growth Boundary can be a windfall for developers who own rural properties opened up for new housing.

The report by Colliers estimates raw land prices increase 5.5 to 8 times higher than their original value ($25,000-$100,000 per acre rises to $200,000-$550,000 per acre) when they are included within the boundary.

The owners of 26 properties had already contacted the city requesting inclusion within the new UGB prior to Council’s direction to initiate the current review.

“In the short term, it'll be a bit of a contest for landowners to get themselves added to the new growth boundary because the big impact will be on their land values-- and their balance sheets will look very nice,” said Levin.

Wallace suggested with city hall guiding the process, selecting which properties ultimately make it inside an expanded UGB will be a positive for everyone, “We think working with the city, we'll be able to do it in a in a manner that will satisfy the community, the city, the neighborhoods, and the industry.”

London has made a commitment to the province to add 47,000 new residential units by 2031.

The Planning and Environment Committee will consider expanding the Urban Growth Boundary next week.

Council will determine the specific properties added to the UGB in 2025.