There’s a longer piece to write about this issue, but one of the particular pathologies of the Ontario housing crisis has been that there’s little in the way of government-collected (and thus reasonably neutral) data to tell us basic things like “this is what’s happening with housing in Ontario.” This has hobbled our response to any number of issues: Are foreign buyers snapping up all the homes in the province? Is the growth that’s happening conforming with provincial policy? The province has periodically gestured toward the idea of remedying this, suggesting it acknowledges that the state of the housing sector — the single biggest household expense for almost everybody — might be worth keeping a closer eye on. But progress has been limited.
In the meantime, we have reports like the latest one commissioned by BILD, the development lobby for the GTA. The third “municipal benchmarking study” for the GTA, written by Altus Group, has tracked both the levels of homebuilding since 2020 and important variables such as the average time to approve a new development and the rates that GTA councils are charging for new development. You can assert that data collected by developers is inherently suspect or biased if you want; the simple fact is that there’s literally no alternative. No other body is collecting this data in a consistent way over time so as to allow for reasonable comparisons between cities and between years.
Much of what’s in the latest report isn’t terribly surprising: housing hasn’t kept pace with breakneck population growth. Development charges are still high, though not growing as quickly as they had been. And new building applications are down in the context of higher interest rates.
That last point, however, is worth dwelling on because BILD’s members are issuing dire warnings about just how bad the situation is getting for the development pipeline. A large condo tower — the kind that’s delivered the lion’s share of new homes in the GTA in recent years — is a complicated, long-term investment that can’t simply be slapped together in a fortnight. To ensure there are homes ready to move into three, four, and five years from now, developers need to have construction started today.
And that’s not happening — or at least it’s happening at such a reduced level that developers are ringing the alarm bell. There were 2,482 applications for new construction in 2021; in 2023, there were 1,225. And comparable numbers for 2024 seem very likely to be worse still. In short, new building applications seem to be falling off a cliff, and builders are warning that, in the not-too-distant future, the development pipeline will be empty — just as interest rates come down and lots of buyers come back to the market looking for homes to buy.
One doesn’t need to weep for private, for-profit developers here to recognize the problem: we already have a housing shortage (the government has all but given up on the stated goal of building 1.5 million new homes), and the primary mechanism we have to build more is sputtering and seizing up. The options are to figure out how to get more homes built or to make peace with a future in which even more people look outside Ontario to make their future — with families born here moving elsewhere, the implementation of further restrictions on immigration, or a combination of both.
How to solve a housing crisis | Nerds on Politics
The industry, not unreasonably, is going to be cautious about investing in the long-term supply and workforce chains needed to get more homes built, given the recent spike in interest rates. It’ll bring more supply online eventually (this is literally its business), but the length of time between now and then could mean a lot of avoidable pain for homebuyers.
“Avoidable,” because that pain, if it comes, will have been a choice. There are alternatives governments could pursue. BILD is wrapping up its latest report as part of a pitch to further reduce taxes and approval timelines on new homes, and longtime readers will know that I think there are strong arguments for both of those positions. But they don’t exhaust the options available.
The current situation isn’t unlike the one that Canada faced after the Second World War, albeit smaller in magnitude. Supply chains and workforces had been badly disrupted during the war, and private homebuilders simply didn’t have the scale needed to house the population of returning GIs and their growing families. The government wanted the private sector to get larger, but private businesses were wary of making the truly huge investments called for. At the same time, there were disagreements within government about how large a role the state should play; both the federal Liberals and the Ontario Tories agreed that they didn’t want to fund social housing.
They would eventually fund some social housing, but the bulk of new homebuilding ended up being privately delivered. The industry grew thanks to massive federal guarantees for private investment: insured mortgages and guarantees to developers that the government would buy units if they didn’t sell.
The problem we’re looking at in the near future is not of the same magnitude as what Canada was experiencing after the Second World War. But we don’t want to get to that point. And, in any event, we’re already in a housing crisis that’s bad enough — look around. If government wants to stop things from getting worse, it’s long past time to think bigger.
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