It’s time for governments to acknowledge that we have a severe shortage of housing supply in the GTA and take action to address it.
There are not enough new homes coming to the market to meet the demands of our growing population, and that is causing new, resale and rental housing prices to rise.
In the last decade, the GTA’s population has grown considerably but housing supply has dropped. There are less than half the number of homes available for sale today than there were 10 years ago. Last month there were 13,670 new homes in builder inventories, whereas in December 2006 there were 30,400.
The biggest decline was in lowrise homes with the number of detached, semi-detached homes and townhomes falling from 17,529 in 2006 to 1,878 at the end of 2016.
The industry is building and selling far fewer lowrise homes than a decade ago in compliance with provincial intensification policy, but demand for such homes has remained strong and prices have soared.
Prices for new lowrise homes in the GTA have more than doubled in 10 years with the average hitting $995,116 in December 2016. On average new single-family detached homes cost $1.3 million last month, which is $811,394 more than in December 2006.
The GTA’s new condo market had a record year in 2016 with 29,186 units – the most ever – sold. At the same time the supply of new condos available to buyers fell to its lowest level in 10 years.
So why doesn’t the home building and land development industry just build more homes to meet demand? Unfortunately, we are hindered by a number of barriers including a lack of approved developable land that is serviced with critical infrastructure, outdated zoning, excessive red tape and NIMBYism.
Much of the land designated for development in the GTA does not have critical infrastructure like water, wastewater and hydro in place so the land can’t currently be built on. In some cases, that infrastructure won’t be in place for at least another decade.
Excessive red tape and increasing delays in planning approvals are also adding to project timelines and impacting supply. It can take up to a decade or more to get a typical new lowrise development to get approved and high-rise projects can take up to seven years. Outdated zoning bylaws in many GTA municipalities create additional delays to the approval process. All new development applications must conform to area zoning bylaws to get approved but lots of municipalities have badly outdated bylaws that don’t conform to provincial intensification policies.
Addressing our housing supply problem should be made a priority by governments at all levels. It’s time to streamline the planning approval process and remove red tape, approve all outstanding environmental assessments that relate to critical infrastructure, pre-designate and pre-zone land and ensure that all zoning bylaws are updated across the region.
This is not a time for small plans. It’s time to work together and address our housing supply crisis so that today’s new-home buyers and future generations have somewhere to live.