May 07, 2004 - Provincial policies driving up home prices
January 17, 2005
May 07, 2004
Provincial policies driving up home prices
Toronto – Restrictive land development policies imposed by the Liberal provincial government are already driving up the cost of housing throughout the Greater Toronto Area.
Making housing less affordable is also threatening to reduce jobs and tax revenue to all levels of government, says Mark Parsons, president of the Greater Toronto Home Builders’ Association.
“Price increases directly resulting from provincial restrictions on the supply of land are quite alarming,” he says. “Housing is less affordable, buyers’ options are reduced and it’s going to get worse this year and next because higher land and lot costs are still working their way through the system.”
The consequence of limiting the supply of land quickly shows up in higher housing costs. The price of an acre of residential land in Mississauga in 2002, for instance, was about $440,000 but today is about $635,000, almost a 44 per cent increase. In Richmond Hill, an acre that cost $275,000 less than two years ago today costs about $400,000, a 45 per cent jump.
Increased land costs translate into increased lot prices. On average across the suburban GTA, lot prices have increased 36 per cent since the end of 2002.
That year was the first full year under legislation that restricted nearly 200,000 acres of land on the Oak Ridges Moraine in the central GTA.
“This is worrisome because the highest increases are in the 20-foot townhouse lots,” Parsons notes. “These are typically entry level homes for first-time buyers and the type of housing that supports the principles of Smart Growth.”
The province itself is soon going to suffer if it doesn’t ensure that there is an adequate supply of development land to accommodate our growing population, Parsons says.
“Last year we sold more than 50,000 new homes in the GTA. That generated more than 168,000 jobs and added $11.8 billion to the national economy – and that’s not even counting the very significant economic contribution of the home renovation industry.”
Calling the situation a “crisis,” Parsons urges the province to take whatever steps are necessary to ensure an adequate supply of land for development. It can take between 15 and 20 years to bring new development on stream but studies indicated that there is only a 14-year supply presently available.
Note to editors: To view PDF version of the report “Turing Dirt Into Gold” outlining the effects of current land policies, please click here.
For more information, contact:
Suzanna Cohen , Director of Communications 416-391-3450