Red tape is pushing up home prices in the GTHA
Rising land values can restrict construction of new homes.
My recent columns have examined the tripled — and nearly quadrupled — land values in the GTHA due to unintended consequences of Ontario’s “Places to Grow” growth plan.
A recent report by Malone Given Parsons, titled Greater Toronto and Hamilton Area, Simcoe County Land Supply Analysis, and the accompanying commentary, The Future of Housing in the GTHA — The Impact of Land Use Policy, reveals that the GTHA can expect a severe shortage of designated greenfield land for new residential development by the middle of 2025, or earlier.
Malone Given Parsons’ report also found there will continue to be value escalation in land/lot values, further affecting home prices in the GTHA. This will increase the challenge of housing the anticipated 115,000 new residents expected in the region every year.
Growth policies implemented by the former provincial government in 2006 and 2017 have reduced the amount of available land for new housing communities, increased land prices and caused home prices to skyrocket. Figures provided by MCAP show that, since 2006, the value of serviced lots/land has increased by more than 300 per cent. Land available for development in the GTHA is shrinking, while demand for new housing and employment lands continues to grow.
One reason for the cost increase is the duplication of municipal and provincial environmental and technical studies and approvals that greatly increase the length of time required to take designated greenfield lands (land approved for new housing) to the housing construction stage.
Let’s use York Region as an example of how all three levels of government can bog down a development with numerous consultations, studies and meetings. The booming region just north of Toronto is projected to grow to 1.8 million residents by 2041.
The communities of Aurora, Newmarket and East Gwillimbury are in dire need of a new waste water treatment plant to meet the demand for this impending growth. Planning for the Upper York Sewage Solution began nearly 10 years ago and yet it remains unbuilt.
York Region consulted with 36 review agencies, including federal and provincial agencies, conservation authorities, local municipalities and utilities. Its environmental assessment report was submitted to the provincial Min- istry of the Environment and Climate Change for approval in July 2014.
As we near the end of 2018, York Region is still waiting for its waste water treatment plant. Without it, new homes cannot be built and land intended for development remains in limbo.
If municipalities and the provincial government do not make a concerted effort to cut red tape, reduce duplication of studies and help streamline planning requirements, the cost of land/lot values will continue to affect home prices in the GTHA.
Recently, the provincial government introduced “Ontario’s Government for the People Helping Create More Housing” initiative. BILD is very supportive of this initiative as the province looks for new ways to remove barriers to building the right kind of housing in the right places.
BILD and the OHBA will be at the table to give their recommendations to create a broader housing supply action plan. To read the analysis and the commentary please visit bildgta.ca/reports.