Housing target is ‘going to be difficult,’ builders say
Governments may have to reconsider long-standing policies to house more people more affordably, warns a top home building advocate.
Larry Masseo, president of the Waterloo Region Home Builders’ Association, points to growth policies that put hefty fees on home buyers, planning that limits land for housing, and development approvals that builders find complicated and slow.
Local governments aim to add 70,000 dwellings in the next decade after adding 38,300 dwellings in the previous decade.
“It’s going to be difficult to meet those targets,” Masseo said.
Since 2021, fewer foundations have been poured for new homes, leading to higher prices and rents and undermining efforts to house more people more affordably.
Buyers of new homes have long shouldered fees to pay for new pipes, roads, arenas, parks and other services. Growth-related fees currently add $70,500 to the cost of a new, detached home in a Kitchener suburb.
“I think we have to, collectively, be open to considering all different funding models to ensure that the burden of all of these services is not entirely placed on the new homebuyer,” said Masseo, an urban planner.
He said housing supply is limited by municipal plans that restrict land available for ground-level housing.
“I would say that we don’t have enough supply to adequately provide for a market that is affordable,” he said. “There are many young people, young families, new immigrants, that aspire to home ownership. And when I say home ownership, we’re talking ground-related homes.”
He complains also that city halls take too long to approve new housing, that approvals are too complicated, and that municipalities sometimes impose requirements that are a burden.
“Development approvals over the last number of years have been increasingly more time-consuming and difficult to achieve,” he said.
Kevin Thomason, of the advocacy group Smart Growth Waterloo Region, disagrees that land constraints are limiting the housing supply.
“This is not a land shortage in any way,” he said, pointing to lots already approved for homes not built. “Builders only want to build the wrong things at the wrong places at the wrong prices.”
He supports putting fees on home buyers to pay for growth costs. “We need to make sure that development is covering the cost of development, so that existing homeowners don’t end up paying for inefficient new homes,” he said.
Municipalities say they are taking steps to provide more land, and to speed and streamline development approvals.
Pending provincial approval later this year, two cities and three townships in the region have opened up to development an estimated 7,000 acres beyond their current boundaries. Speedier approvals are a work in progress.
Citing municipal delays, Waterloo developers have gone around city hall to ask a provincial tribunal to approve 40 residential towers at six locations.
Masseo said builders have slowed housing projects while potential buyers wait for mortgage costs to fall.
“Home sales have been very slow, to almost nonexistent, over the past year,” he said. “We think that this is mostly due to interest rates. But it’s also due to lack of supply and lack of alternative locations for ground-related housing.”