The provincial government recently proposed policy changes that will significantly increase intensification across the GTA and mean more highrise condos, more congestion, less housing choice and higher housing prices.
Among the proposed changes to its regional Growth Plan, the government will increase the amount of development that must be accommodated within areas that are already established, from 40 to 60 per cent. For cities like Toronto and Mississauga where all new development already occurs within their built boundaries, change will occur in patterns that look similar to today. But for most municipalities in the GTA that is a substantial increase in intensification that will have a dramatic impact on built form.
For new development areas or what is known as greenfields, densities will be required to increase from 50 persons and jobs per hectare to 80 people and jobs per hectare.
These proposed changes will have a major impact on the ground.
Since the Growth Plan’s inception in 2006, the home building and land development industry has been meeting the province’s intensification requirements. Today we are building at least as many highrise homes as low-rise homes. However, the demand for lowrise family homes has not diminished and unfortunately the price has skyrocketed because of low supply.
Supply of lowrise housing in the GTA, especially for detached single-family homes, has reached shockingly low record levels. Monthly research conducted by Altus Group, found that on March 31, across the entire GTA there were only 3,036 lowrise homes available for sale in builders’ remaining inventory. Ten years ago, on March 31, 2006 just before the Growth Plan came into effect, there were 16,757 lowrise homes available for sale in remaining inventory.
Not surprisingly, the disparity between supply and price has led to a dramatic increase in prices. The average price of new ground related housing in the GTA has more than doubled since the Growth Plan was introduced. One example is the average price of a new single-family home in the GTA which eclipsed $1 million in March. Ten years ago the average piece was $439,294.
With its proposed changes to the Growth Plan and Greenbelt Plans, it’s clear the government of Ontario is not concerned about the price of housing in the GTA.
There is a growing body of research and data showing a strong correlation between restrictive land use policy and increasing home prices.
A number of American studies, one of them in the Iowa Law Review, have found that regulatory barriers are strangling housing supply and that when cities cut back available land for development, land and housing prices rise. There have also been local reports that have flagged the link between our growing problems with housing affordable in the GTA and provincial land use policies.
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.
What do you think? There is a public consultation process underway and an online feedback form on the Ministry of Municipal Affairs’ website. You can also contact your local MPP and tell them it is the time to pause and take a hard look at the numbers before its too late.