Can Ontario build 1.5 million homes by 2031?  |  Toronto's housing crisis

Can Ontario build 1.5 million homes by 2031? | Toronto’s housing crisis

The Ford government has promised to build 1.5 million homes in Ontario by 2031, but stakeholders warn that many things must change to reach that goal.

Almost 2 years ago, the Ontario Progressive Conservatives came to the table a bill to speed up the construction of single-family homes and condominiums. The government wanted to get municipalities to speed up the process of approving building permits.

It’s clear that those hopes have yet to materialize: 85,770 housing starts in Ontario in 2022, down 6,115 from 2022, according to the latest data from the Canada Mortgage and Housing Corporation (CMHC).

Doug Ford at a press conference.

Ontario Premier Doug Ford still wants to build 1.5 million homes by 2031. (File photo)

Photo: Radio-Canada

And it’s not likely to get any better. PUSH CMHC estimates that most projects launched last year were financed when interest rates were more favorable.

On the side of the promoters, when interest rates rise, the cost of financing projects from banks will also increase, making projects less profitable than before.says the economist from CMHC Francis Cortellino.

Economists expect the Bank of Canada to cut its key rate later this year, which would have the effect of lowering interest rates. However, they will remain high, estimates Desjardins Chief Economist Marc Desormeaux.

Compared to the last decade, we forecast rates to remain high. Then the rates will be less stimulating and that will be a problem for several companies.

Marc Desormeaux with a blue jacket.

Marc Desormeaux is the chief economist of the Desjardins movement. (Archive photo)

Photo: Radio-Canada / Bienvenu Senga

The question of municipalities

However, some regions in Ontario are doing well. The cities of Kingston and Guelph managed compared to the previous year, according to data from CMHC.

At the heart of this success story in Guelph is an intentional planning strategy aimed at stimulating the construction of diverse housing: duplexes, townhouses and mixed-use buildings with commercial space on the ground floor and apartments on the upper floors.

In April, the city council approved a complete overhaul of the zoning system to allow the construction of buildings other than single-family homes. However, this regulation is subject to appeal to the Ontario Planning Tribunal.

Guelph was way ahead of provincial politics and the credit for our growth and housing starts absolutely does not belong to the provincesays city councilor Dominique O’Rourke.

People sitting on park benches in front of the water feature with businesses on the high street behind them.

The passage of Bill 23 has a financial impact on the municipality of Guelph, according to Councilor Dominique O’Rourke. (Archive photo)

Photo: Radio-Canada / Colin Côté-Paulette

The provincial government is putting obstacles in the way for cities by forcing them to reduce the amount of development fees they can collect from developers, a councilor says. However, this income is essential for the development of the area associated with these new housing units.

New development will need sewers, sidewalks, roads, public transportationshe says. We adjust and reduce the amount we can collect from developers to pay for growth, and that then falls on property taxes. So that’s frustrating.

A press secretary for Ontario’s housing minister concedes by email that the province needs to do more to meet its goals.

We sought input from our city partners last fall and are working to implement the remaining recommendations based on their feedbacksays Alexandru Cioban.

The economic situation is no excuse

However, market forces remain outside the control of municipal and provincial governments. Interest rates are likely to remain high throughout the year and the construction worker shortage continues to be felt.

The province doesn’t need to wash its hands of it, insists Ontario Home Builders Council president Richard Lyall.

Housing is like a supertanker. It won’t stop too fast, it won’t start too fast, even if you can shock the system. It is imperative that the federal and provincial governments, whatever additional housing changes they need to make, do so this spring.

Ontario and Canada have worked together in 2023 to ease the burden on developers by exempting all new rental property construction from the goods and services tax (GST). The federal Department of Housing is increasing agreements with cities to stimulate housing densification in exchange for millions of dollars.

Construction worker at construction site.

At the current pace of construction, the country’s housing stock is expected to grow by only 2.3 million units by 2030, short of the target of 3.5 million new homes, according to CMHC.

Photo: The Canadian Press / Justin Tang

But governments still have other levers at their disposal, Mr Lyall believes, such as exempting young households buying their first home from the same tax or building modular units that can be installed where needed.

This is especially suitable for student housing, transitional housing, senior housing. The entire unit can be built fully equipped with appliances, shipped and installed on sitehe said.

It is good to build all types of housing because, according to him, the supply must increase at all costs, at all costs. He believes luxury buildings would also have a place, as people who move in will leave behind more affordable buildings for those on lower incomes.

Any accommodation is worthwhile, even luxury accommodation, because everything that increases the offer has its effecthe said.

Richard Lyall sitting in front of his organisation's poster.

Richard Lyall is the Chair of the Home Builders Council of Ontario.

Photo: (Paul Borkwood/CBC)

The urgency to act is real, and inaction could have consequences, says economist Marc Desormeaux.

It is clear that if we look at all indicators, economic forecasts, the construction of apartment buildings will be difficult in the coming years.he said.

But even if we encounter difficulties caused by macro-economic factors, we must never stop our efforts to accelerate housing construction. Affordability needs to be improved and the reputation of the province and even Canada as a welcoming and prosperous place to live depends on more residential development.

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