Time for action on GTA housing crisis

In my previous column, I highlighted the fact that 2023 will go down as one of the worst years on record for new home sales in the Greater Toronto Area (GTA). I indicated that housing starts follow sales and with low sales, we can expect to see new housing starts dip, which will negatively impact future supply at the very time we will need it the most. As 2024 begins, we are at a pivotal moment in the debate on housing and employment space supply and affordability in the GTA and Ontario with new housing and employment space being buffeted by a number of often countervailing forces. As population expands rapidly, we need concerted action to make sure the region gets the supply it needs.

First, interest rates must moderate. The rapid run up in interest rates as the Bank of Canada fights inflation is causing many prospective new homebuyers to sit on the sidelines. It is also making it more difficult to finance new projects. This is cutting off the lifeblood of the industry and new supply will suffer as a consequence.

Second, there needs to be predictability and stability in the regulatory environment for new homes and for land supply. While there has been tremendous progress in modernizing the regulatory framework to support the provincial objective of building 1.5 million new homes, more needs to be done.

Third, we need a renewed focus on housing supportive infrastructure. There are many areas across the GTA where constraints in infrastructure, such as sewer capacity, electrical infrastructure and the like, are limiting the ability to build housing in a timely manner. Addressing this is costly and cannot be done solely by municipalities nor by loading all the cost on the backs of new homebuyers. We must recognize that a new funding model for housing supportive infrastructure is crucial to achieving the objectives of added supply and increased affordability in the province.

Last, as identified in multiple BILD municipal benchmarking studies, lengthy approvals for new housing projects in the GTA are amongst the worst in North America and add tens of thousands of dollars to the cost of a new home. Cutting red tape and speeding up the approvals of new homes must be prioritized to unlock the housing this region desperately needs.

2024 must be the year we properly tackle the housing crisis facing the GTA. Failure to do so will threaten our social and economic well-being.

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