Ontario about 19 per cent of the way towards building 1.5M homes by 2031, report finds

Ontario is about 19 per cent of the way towards its goal of building 1.5 million homes by 2031, with a provincial real estate association warning of a slowdown due to factors such as high interest rates and construction financing.

The Ontario Real Estate Association (OREA) noted in a report released Thursday morning that the province has seen 285,377 housing starts since Premier Doug Ford set the ambitious 10-year goal in 2021.

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However, a yearly breakdown of housing starts—which is a metric that indicates when construction work on a building or unit begins—shows construction slipping.

In 2022, there were 96,000 housing starts and in early 2023 there were 90,000 housing starts, estimates show.

“While these are still impressive numbers compared to the previous three decades, they fall short of the 150,000 new units needed on average, per year to meet that 1.5 million-home goal,” the 67-page report says.

“Unless dramatic steps are taken, Ontario’s economic and social future are at stake.”

OREA noted that while the provincial government’s housing reforms have been “commendable,” a shortage of builders and land, as well as “a widespread bias against development,” have contributed to the slow-moving housing growth.

They also said that government changes to mortgage qualifications, down payments and carrying costs have not helped the situation, adding barriers to affordable home ownership when coupled with rising interest rates.

“We had great progress with four piece of legislation under the Ford government. We had a high number of homes, apartments built in 2021 and 2022 that we've seen in 30 years. That's a great start,” OREA CEO Tim Hudak told reporters at a news conference Thursday. “We need to put our foot on the gas. You can't hesitate.”

“ This is not the time for any kind of pause. Go forward with the plan. Implement the rest.”

A person walks by a row of houses in Toronto on Tuesday July 12, 2022. (THE CANADIAN PRESS/Cole Burston)

In its report, OREA offers 10 actions the government could take this year to help spur development, centering on zoning rules, fixing the Ontario Land Tribunal, and lowering housing costs.

They note that while some progress has been made in reducing backlogs at the Ontario Land Tribunal, OREA says the government must take a stronger role in ensuring it runs efficiently and is not abused by “anti-housing advocates.”

OREA also recommend that the tribunal should be allowed to award punitive damages to municipalities who refuse applications “simply to avoid accountability.”

The report suggests ending exclusionary zoning province-wide, consider converting commercial properties to new homes, and rezone all land along transit corridors as mixed commercial and residential use.

Hudak added that while the province has already introduced legislation to enable exclusionary zoning, he wants to see them “go even further.”

“So the province legislation allows for three residences on a given property in the province,” he said.”But we think the standard should be allowing up to four homes and each could be individually owned as opposed to simply rental properties.”

Other suggestions include:

• Abolishing the Land Transfer Tax or dramatically reduce the rate
• Allow water and wastewater services to be provided through a municipal services corporation
• Reform how municipalities collect and spend development charges
• Increase the number of skilled tradespeople in Ontario
• Implement provincial loan guarantees for purpose-built rental and affordable rental projects

No action taken on nearly 25% of housing recommendations

As of Feb. 1, Ontario has yet to act on 13 of the 55 recommendations made by the Housing Affordability Task Force.

About 18 of the task force’s recommendations have been fully implemented by the Ford government. Nine have “major progress” and 15 are labelled as having “progress underway.”

The housing affordability task force released their report in February 2022, indicating that Ontario needed an aggressive strategy to build homes, increase density, and limit consultation and appeals.

OREA says the province’s four pieces of housing legislation, as well as changes made to provincial growth plans and the Building Faster Fund to reward municipal builders, created a strong foundation towards meeting those goals.

Some of the recommendations that have yet to be acted upon include: permitting as-of-right multi-tenant housing; allowing as-of-right zoning for six to 11 storeys with no minimum parking requirements on streets utilized by public transit; and enabling municipalities to withdraw infrastructure allocations from any permitted projects where construction has not been initiated within three years of build permits being issued.

A spokesperson for the minister of municipal affairs and housing said they will work with OREA as well as other stakeholders to "reach our shared goal of building more homes than ever before."

"Many of the action items highlighted in OREA's report are initiatives that our government is already working on. Our new Housing Supply Action Plan, which will be announced in the coming months, will lay out next steps."