Ontario’s politicians all tout the same fix for the housing crisis: supply, supply, supply. But experts say it’s not that simple. Boosting Ontario’s housing supply won’t necessarily bring down prices and make homes more affordable.
It’s an idea we’ve heard throughout this election campaign — if you build more homes, housing will become more affordable in the GTA.
“It’s always politically effective to oversimplify a message and this is what’s happening here,” Sotomayor said. “It is never as simple as supply and demand.” “The amount of housing that needs to be built to have an impact on the affordability of the market is too high,” she saidby the UK Collaborative Centre for Housing Evidence that reported computer modelling showed 1 per cent increase in the total housing stock would lower home prices between only 1.5 and 2 per cent.
Joel Roberts, a PhD candidate whose dissertation at York’s department of social and political thought, focuses on the drivers of rising Canadian home prices. He says it’s a “false assumption” that simply increasing supply will tamp down prices. You only have to look at the market declines of the last two months.
“You can build all the expensive condos or suburban detached homes you like, it won’t make housing more affordable. What we need is a targeted approach that increases the supply of affordable housing options in particular — that means supporting non-profit organizations, community land trusts, social housing, or regulating the private market through tools like inclusionary zoning.”“Asset prices are subject to different dynamics,” says Roberts.
In January, Scotiabank reported that Ontario needs 650,000 more homes to address its share of a 1.8-million Canadian shortfall. That would bring our supply in line with other G7 nations.housing supply is similar to the U.S., our prices are about 60 per cent higher.
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