Ontario’s housing shortage fix already a flop

Politicians need to stop making the crisis worse

The central conceit of government is that the people working in it have the intelligence and expertise to solve complex problems. And yet, evidence of these high-level problem-solving skills is difficult to find.

Take the housing crisis, an issue felt most acutely in Ontario, which has the country’s fastest population growth and its greatest housing supply shortage. Fixing the problem is largely up to the government of Premier Doug Ford and the province’s 414 municipalities. Feeling confident?

Add in the blundering of the federal government and you’ve got the magic recipe for the problem Ontario faces now. In short, too little knowledge of how housing development works and too many politicians tripping over each other in their attempts to fix a problem they have done much to create.

Two recent stories in Ontario give a flavour of what’s going on. In one case, bureaucrats have found a way to evade provincial rules aimed at speeding up housing approvals. The other is a dispute over the most basic issue: how to count those approvals.

The Ford government has a big plan for housing, intending to build 1.5-million homes over a decade. It has given municipalities their marching orders in the form of annual housing targets. Those that meet the targets will be eligible for money from the province’s $1.2-billion Building Faster Fund. Housing starts are also key to getting money from the federal government’s $4-billion housing fund.

That sounds like a useful incentive, but the experience of the city of Windsor shows the plan’s flaw. Windsor was to achieve 953 housing starts in 2023, but the provincial government says there were only 346. The city, however, says it approved 1,154 residential units, well above its target.

Both numbers are correct. The city did approve the housing, but according to Canada Mortgage and Housing Corp. (CMHC) tracking, work has begun on only 346. The problem is beyond the city’s control. It can approve housing but it can’t force builders to start work. High interest rates are deterring both builders and buyers.

Despite that, the federal government cited the city’s failure to follow “best practices” when it refused to give financial help for a plan to increase density along 47 kilometres of transit corridors, just the kind of thing the government says it wants. The letter from federal Housing Minister Sean Fraser said Windsor “only permitted” 346 starts last year. Permits, starts, whatever; it’s all so confusing.

Another big Ford government plan, introduced last year, set shorter deadlines for municipal housing approvals and financial penalties for failing to meet them. The goal was to speed up the notoriously slow municipal approval process, but the plan failed to take into account the cleverness that municipal planning officials would display when faced with the spectre of working faster. Many Ontario municipalities have moved much of the development approval work into a “pre-application” process that operates outside the provincial deadlines. Developers say approvals now take longer than before.

Ontario Minister of Municipal Affairs and Housing Paul Calandra admits the process is not working and has vowed to replace it with something that will speed approvals. It would help if the province reduced the number of steps and studies required.

Ontario’s housing shortage can’t be fixed by government demands, punishments or tweaks to the rules. Let’s stop pretending that it can. The province’s goal of building 1.5-million houses in a decade is a pipe dream. Last year’s budget predicted housing starts of about 80,000 a year for three years, less than the nearly 100,000 built in 2022. At that pace, Ontario will fall well short of its goal. The CMHC predicts that by 2030, Ontario will still be 1.48-million homes short of its required supply.

ONTARIO’S HOUSING SHORTAGE CAN’T BE FIXED BY GOVERNMENT DEMANDS, PUNISHMENTS OR TWEAKS TO THE RULES.

The first thing politicians need to do is to stop making the housing crisis worse. Canada’s rapid population growth is a self-created problem and the federal government’s recent reduction in the number of international students is hardly a fix. Without record numbers of people coming to Canada as immigrants, students or temporary workers, population growth would be negligible. Even at that, it would take many years to adequately house the people here now.

The housing shortage is a huge problem for Ontario. High housing costs have already made it a less affordable place to live and that’s going to hurt the economy. Instead of constantly cheerleading for growth, Ford and his team need to admit the obvious facts. Ontario just can’t handle such high population growth and every year that politicians pretend they can magically boost supply just makes the problem worse.