Building a balanced approach to the future of the GTA
The affordability of housing in the Greater Toronto Area is a serious issue and one that we have been raising for several years.
We are the industry that builds and develops the new homes and communities that house the growing population of the GTA.
We build all kinds of homes for all kinds of people.
But we don’t just build what we want. Our industry is one of the most regulated and three levels of government policies, plans and processes determine how land can be used and control where and how development occurs.
A decade ago the provincial government released its growth plan which set out to change the nature of development in the GTA and move away from the largely suburban-oriented development pattern that we had been following for many decades.
Over the past 10 years, the homebuilding industry has become experts in implementing the province’s plan — adapting from building mainly lowrise homes to, today, building at least as many highrise homes as ground-related dwellings.
We are not building more homes overall. We are building to government policy and building more high-density developments and fewer lowrise homes, especially fewer detached single-family homes.
Market demand for those new lowrise homes, especially for singlefamily detached homes, has not diminished, so homes that are in high demand are short in supply.
Data released by Altus Group shows record-low inventory levels of new ground-related housing, especially detached homes, in the GTA today. In May, we dipped below 2,000 lowrise homes for sale across the GTA with only 1,985 left. A year ago, there were twice as many available at 5,171, and 10 years ago, there were more than 16,000.
A basic economic principle is when supply can’t meet demand, prices go up. The disparity is not only driving up prices but it’s reducing choice for consumers. The average price of a new lowrise home in the GTA climbed to $875,154 in May. Ten years ago, in May 2006, the average new ground-related home was under $400,000.
Organizations such as TD Economics recognize that there’s an affordability issue in the GTA housing marketplace. A January 2015 report found that the market’s strengths were masking serious problems including deteriorating affordability and a lack of choice. Another report by TD issued just a few weeks ago said that limited supply is causing “buyer gridlock.”
Proposed changes to the growth plan announced recently by the provincial government will substantially increase the level of intensification in the GTA. There will be more development in established areas and all new development will have to use even less land to accommodate more people and jobs. This will mean that even fewer ground-related homes, especially single detached homes, will be built.
We believe the province should take a more measured approach before significantly increasing intensification requirements that will further limit housing choice and increase home prices in the GTA.
Now’s the time to use your voice. The government is seeking public input into its proposed changes until Sept. 30. Tell your local MPP or use the province’s online feedback form if you’re also concerned about housing choice and prices. Bryan Tuckey is president and CEO of the Building Industry and Land Development Association (BILD) and is a land-use planner who has worked for municipal, regional and provincial governments. Find him at twitter.com/ bildgta, facebook.com/bildgta and bildblogs.ca.