Build, baby, build. If we were to quote our favorite takeaway from the Ontario government’s housing summit this week, it would be that the most promising solution to the housing crisis facing the province is to shovel the ground and to build new housing. Build it and they will come – and buy.
To be sure it won’t happen overnight or easily. Soaring real estate prices, making home ownership either an onerous burden or an impossible dream for millions of Ontarians, will continue for some time. And that will have a ripple effect – also making rental accommodation more unaffordable. But after dozens of senior elected leaders from the province’s largest municipalities, including Waterloo Region, met remotely with Premier Doug Ford and Minister of Municipal Affairs and Housing Steve Clark on Wednesday, Ontarians can finally get a glimpse a plausible way.
First, there’s stronger agreement than ever on what the biggest barrier to affordable housing of all kinds really is: it’s the lack of supply. This recognition is essential because defining the problem will determine how we move forward. If you need proof of the supply shortage, consider that at the end of last year, Canada had the lowest supply of existing homes for sale on record.
Specifically, consider that over the past five years, Ontario’s population has grown by nearly one million people. But while Western University economist Mike Moffat estimates the growth has created demand for 430,000 homes, only 330,000 have been built. Consequently, the province was short by 100,000 houses. And there is no sign that the rapid population growth will subside in the years to come. Waterloo Region will also continue to grow – by about 10,000 people a year. At the same time, average prices for local single-family homes — which topped $1 million for the first time last month — will also continue to grow.
Of course, other factors also push up house prices. Historically low interest rates, investors hungry for huge returns and, more recently, the pandemic-induced exodus that has seen people flee Canada’s largest city – Toronto – to settle in cities and villages in southern Ontario, have all played a role in this development. That said, solutions to the whole issue of affordability must first and foremost involve aggressive action to bolster supply.
Wednesday’s housing summit provided some solid suggestions on how to achieve this formidable goal, another achievement worth celebrating. For example, the province announced a $45 million fund to encourage cities, like the trio in this region, to find ways to cut red tape and speed up development approvals. This might help, although it won’t solve the problem on its own.
When it comes to getting even more housing starts, the most notable idea the province is considering would be to eliminate current zoning rules that largely prohibit construction of anything other than single-family homes. in many urban neighborhoods in Ontario. This significant change would allow the construction of duplexes, triplexes or small apartment buildings in areas where they are now prohibited. If that happened, more people could get a home in one of Ontario’s cities without having to leave that city’s imprint on the surrounding countryside.
The proposal has garnered broad support from housing and environmental activists as well as the Ontario Real Estate Association and the Toronto Board of Trade. But it’s controversial and you can count on him in the face of pushback from residents already living in the neighborhoods that would be affected. And that explains why Minister Clark has not endorsed it yet.
Which brings us to the third thing to love about this week’s Housing Summit: its timeliness. Ontario voters will head to the polls in provincial and municipal elections this year. In both cases, housing will emerge as one of the most crucial, even determining, issues. The Progressive Conservatives, Liberals, New Democrats and Greens will all be emphasizing their own housing plans. In Waterloo Region, municipal candidates will do the same.
Voters must be informed, opinionated and ready. They will have choices to make on the accommodation as well as on the candidates. The disconnect between housing demand and supply is so severe that it will be difficult to return to a healthier and more sustainable housing market. Despite everything, we should make this the year that Ontario tries to do so.