Housing supply

Will 2022 be the year we fix the housing supply in the Greater Toronto Area?

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This year will bring provincial and municipal elections to Ontario. In the GTA, with housing inventories at near historic lows, strong housing demand and rapidly rising prices, housing supply and affordability will rank alongside the COVID-19 recovery as key drivers. electoral issues.

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The lack of housing supply exacerbates inequalities, slows down economic growth and threatens the collective quality of life in the region. Voters should demand meaningful platforms and political ideas from candidates and parties.

After nearly a decade of debate, the broad consensus is that the lack of housing supply is at the root of the GTA’s affordability problem. A 2021 Scotiabank report found that Canada had the lowest number of housing units per 1,000 people among G7 countries. In the GTA, the causes of the supply dilemma are multifactorial and complex, but are rooted in the limited supply of land, long construction times driven by unnecessarily complicated and bureaucratic approval processes, and a tight supply of labor. – of qualified work.

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Added to this is continued high demand due to rapid population growth due to intra-provincial and rural-to-urban migration and immigration, resulting in fierce competition for the limited housing supply, driving up housing prices. price. Fees and taxes charged by the three levels of government also add costs, amounting to 25% of the cost of new housing in the GTA.

Solutions tend to fall into two camps – those that focus on demand and those that focus on supply. Any long-term solution must be firmly rooted in supply, rather than taxation and restriction approaches aimed at curbing housing demand. Past attempts to moderate demand have had short-term and moderate effects at best. Tedious stress tests have pulled young families off the homeownership ladder, caused difficulties in mortgage renewals for countless homebuyers, and nudged those facing challenges into more sources of finance. costly and higher risk.

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Taxes on foreign buyers, another way governments have tried to dampen demand, have produced paltry returns to government coffers and negligible impacts on housing affordability, because the real cause of the problem is the constraints of supply, not foreign buyers.

Voters should be wary of political candidates who claim that adding taxes or other restrictions will increase affordability. Instead, they should seek out candidates and parties to come up with solutions that will increase supply by addressing the root causes of land supply and approval delays and solutions that cap or reduce the burden already high tax imposed on new homes and owners.

Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD), the voice of the residential construction, land development and professional renovation industry in the GTA. For the latest industry news and new home data, follow BILD on Twitter, @bildgta, or visit www.bildgta.ca.