SOLVING THE HOUSING SUPPLY AND AFFORDABILITY EQUATION IN THE GTA
It’s no secret that the GTA has a housing supply and affordability problem. The region is one of the fastest growing Census Metropolitan Areas in North America. Net migration from other parts of Canada, natural population growth and immigration all add up to population growth of 115,000 people per year on average. Our population is expected to reach 9.7 million by 2041.
MORE INFORMATION ON POPULATION TRENDS IN THE GTA
Ontario Population Projections, 2018–2046
CUR’s Top 10 Takeaways from Statistics Canada’s Latest Population Estimates for the Greater Golden Horseshoe(GGH)
At the same time, the building of new homes and apartments has fallen behind this population growth, leading to a shortfall of about 10,000 housing units every year. This is keeping housing costs high, keeping more people in rental units longer, decreasing vacancy rates and putting inflationary pressure on rents.
Past efforts to balance the market, such as the mortgage stress test and the foreign buyers tax in the GTA, have focused on trying to cool demand. While these demand-side “tax and restrict” policies may have helped moderate markets temporarily, the fundamental problem—broad housing affordability—remains unresolved. Addressing the long-term challenge of housing in the GTA requires increasing the supply of new homes to meet demand and bring the market into balance.
MORE INFORMATION ON WHY HOUSING SUPPLY MATTERS
After three years of squeezing demand, governments should target housing supply
Real estate 'supply skeptics' have it all wrong: Building more houses really does improve affordability
WHAT ARE THE FACTORS DRIVING HOUSING SUPPLY SHORTAGES AND AFFORDABILITY CHALLENGES
There are 4 key factors behind the GTA’s housing supply shortfall and rising home prices and rents.
1. The constraints on the supply of land for new developments. Vacant land available for new housing within the municipal boundaries of the cities of the GTA is 4.5% of the total settlement lands, down from the 6% in 2017. This shrinking amount of land for new developments results in inflationary pressure on the cost of land and thus housing. Our land use study has more information on this.
2. The multiple studies, checklists and reports—up to 52, many of them duplicate--required to get a new housing project approved, adding time, cost and delays to getting new housing built.
3. The heavy burden of government fees, taxes and charges. Currently taxes and charges from all levels of government account for up to 25% of the cost of an average home in the GTA. This level is among the highest in North America.
4. And the GTA’s population growth of 115,000 people per year that results in strong demand for housing to buy or rent.
SOLVING THE HOUSING SUPPLY EQUATION IN THE GREATER TORONTO AREA (GTA)
The Ontario Government has recognized that action is required on the housing supply side of the equation to bring the market back into balance. That’s why it has introduced its Housing Supply Action Plan.
The Building Industry and Land Development Association supports the provincial government’s efforts to increase housing supply and balance the housing market in Ontario and the GTA.
BUILDING A BETTER GTA FOR TOMORROW, TODAY
About the Building Industry and Land Development Association (BILD):
With 1,500 member companies, BILD is the voice of the home building, land development and professional renovation industry in the Greater Toronto Area. The building and renovation industry provides $33 billion in investment value and employs 271,000 people in the region. BILD is proudly affiliated with the Ontario and Canadian Home Builders' Associations.