Part of Plans to Address Housing Supply Crunch

Nearly 90 percent of the homes that we live in are built by private residential developers and builders. They’re a vital and indispensable part of the housing supply and affordability ecosystem and must be included when it comes to figuring out a game plan to tackle the problem and bring on more units.

They’re the right people to turn to for ideas on how to confront the housing crunch. They can help you avoid the pitfalls, and get the most bang for your buck.

I raise this matter because I think we should be able to RESCON were surprised last November when the Toronto City Council voted – as part of an ambitious affordable housing plan that would see 65,000 rent-controlled units built by 2030 at a cost of $36 billion – to advance the use of a city-led team and “public builder model”Construction and delivery of homes at multiple sites.

In a staff report, it was suggested that the city should be the developer of the projects. Coun. Brad Bradford rightly objected to the proposal, noting the city doesn’t have the expertise in building and that’s why it’s always been important to partner with builders. But his motion failed.

In our opinion, bypassing private builders and developers – the very people who have the know-how that is needed – would be a mistake as the building process is complicated and fraught with difficulties.

RESCON Encouraged By Message

Recently, though, at RESCON’s annual general meeting, we were encouraged to hear from Toronto Mayor Olivia Chow, who explained in remarks that she is committed to working with builders.

She noted that while the city’s housing blueprint provides a road map, it will rely on the builders to complete the actual work.

“Under the road map, we’re just the developer, we’re the ones that have the land, you’re going to do the building,”The mayor said.

She also stated that the city is working on bringing all housing departments under one person to make it easier to build housing. And, she indicated, in spite of the city’s financial problems, the council won’t cut the planning department budget because approvals must move through the system faster.

It’s what we wanted to hear.

The mayor also reiterated that she would work with the federal and provincial governments to make housing more affordable. Also encouraging is the fact that the city is moving forward on densification. This is because more density means fewer people will use public transportation and there will be less congestion.

At the same event, Paul Calandra (Minister of Municipal Affairs and Housing) announced that there will be more changes to the housing supply. We will see what happens, but time is of the essence.

Housing Needs to be Built Quickly

It is essential to build more housing rapidly. Ontario’s housing stock has not kept pace with the growth of its population for far too long. House prices are also rising faster than wages.

HomeownershipMost working people are now unable to afford the cost of living in our cities, and many have left them. Toronto, Hamilton, Vancouver, and other North American cities are now among the most affordable.

In 2022-23 for example, approximately 70,000 people will migrate to Ontario, while 115,000 will leave. Recent survey results showed that more than 40% of post-secondary students are considering leaving the province due to the housing shortage and affordability crisis.

Recent reports indicate that things will only get worse before they improve.

A Tough Year Ahead

At RESCON’s recent meeting, we heard from market specialists who indicated the housing market is in for a rocky ride in 2024.

The sales of new homes have literally stopped due to Interest rate hikesConstruction costs are soaring, and taxes, fees and levies are causing a lot of damage.

Both low-rise and high-rise housing has seen a slowdown. In Ontario, for instance, the number of starts was less than 90,000. They’re expected to dip to 80,000 in 2024 before rising to 85,000 in 2025 and 88,000 in 2026.

Only 10 Canadian cities saw an increase in housing starts in the year 2023. The majority saw a decrease.

The construction of new housing simply cannot keep up with the population growth. We have too many houses for the number people.

The average Canadian home costs $741.400 and the minimum income to qualify is $195,000.

We must build more housing by tackling the issues that are stifling the market – and ensure that builders are involved in the fix.

Richard Lyall is the president of Residential Construction Council of Ontario. He has been representing the building industry in Ontario, Canada since 1991. You can reach him via [email protected].