Canadian Design and Construction News staff writer
A stark sense of despair and frustration permeated the fifth annual housing summit hosted by the Residential Construction Council of Ontario (RESCON) on Sept. 30, as experts painted a grim picture of a housing crisis spiraling out of control with no clear solutions in sight.
“The math ain’t mathing,” said Marlon Bray, executive vice-president of Clark Construction Management, summarizing the sentiment of many at the virtual summit. His presentation, filled with stark data and blunt assessments, highlighted the chasm between government promises and the realities of the housing market.
Bray pointed to a critical disconnect between supply and demand, particularly in the Greater Toronto Area, where he said a “drought” of new housing is imminent. He presented data showing a dramatic drop in new housing starts, with August sales for single-family homes and condominiums down 21% and 59% respectively from the prior year.
“We’re going to see high completions for the next couple of years, and then it’s going to fall off a cliff,” Bray warned, predicting a severe housing shortage in the years 2028 to 2030. He argued that the current economic climate, with high interest rates and inflated costs, has made it nearly impossible for developers to build affordable housing.
“The pencil is broken,” he said, referring to the financial viability of new projects. He explained that even with a 20% drop in construction costs and a 40% drop in land costs, developers are still struggling to make projects profitable.
Bray also took aim at government policies, which he argued are exacerbating the crisis. He pointed to the high tax burden on new homes in Toronto, which he said is comparable to the taxes on cigarettes and alcohol. “We either have a tax revenue distribution problem, or homes are bad for you,” he said wryly.
His proposed “K.I.S.S. Method” – Keep It Simple, Stupid – for transforming the housing market included a litany of radical suggestions: getting rid of all taxes and levies on housing, uploading all planning and permit approvals to the provincial level, and abolishing zoning. “Please, government, get out of the way,” he implored.
The summit also featured a presentation by Dr. Mike Moffatt of the Missing Middle Initiative, who shared concerning data on housing affordability. His “Wham Index,” which measures the change in housing affordability in Canadian municipalities, showed a dramatic decline in recent years. He highlighted the growing trend of people leaving the GTA for more affordable pastures.
“And the choice is to leave,” he said, pointing to a graph showing a net population loss from domestic migration in the GTA.
Ontario Premier Doug Ford, in a pre-recorded message, reiterated his government’s commitment to building 1.5 million new homes over the next 10 years. “It’s a big goal, but I know we can do it,” he said.
However, many at the summit expressed skepticism about the feasibility of this target. Richard Lyall, President of RESCON, said that while the government has taken some positive steps, there are still significant obstacles to overcome, including a shortage of skilled labor and a cumbersome approvals process.
“We’re making progress, but it’s still not fast enough,” he said.
The summit also heard from Alberta’s Minister of Municipal Affairs, Dan Williams, who touted his province’s success in increasing housing starts. He pointed to a number of initiatives, including safety code innovation, faster approvals, and an “automatic yes” mindset across government.
“We’re looking for ways to get to yes,” he said, a message that resonated with many of the frustrated builders and developers in the audience.
As the summit concluded, a palpable sense of urgency hung in the virtual air. The experts had spoken, the data had been presented, and the message was clear: Canada is facing a housing crisis of unprecedented proportions, and without a radical shift in policy and a concerted effort from all levels of government, the dream of homeownership will slip further out of reach for millions of Canadians.
