Erin Nicole Davis is a born and raised Toronto writer with a passion for the city and its urban affairs and culture.
Unless things change drastically, Ontario's housing target of building at least 1.5 million new homes by 2031 simply won’t happen.Unless things dramatically change, the Ontario government’s much-touted target of building at least 1.5 million homes across the province by 2031 won’t happen. It’s that simple, according to several industry experts – and basic math.
Paired with high land values and sky-high municipal fees to build and the result is a cost structure that is out of line with the market’s ability to absorb, says Sherwood. “As a result, pre-construction sales have plummeted since mid-2022, new projects are not financially viable and starts are following a similar trajectory to sales,” he says.
“Ontario has achieved the highest housing starts the province has seen in over three decades,” wrote Justine Teplycky, director of communications for provincial housing minister Paul Calandra, in an email to STOREYS. “However, as a result of high interest rates caused by the federal government’s runaway tax-and-spend policies, including the federal carbon tax, homebuilders across the province face a challenging economic environment that is impacting the pace of new home construction.
The report outlines that, to meet its goal of 1.5 million homes by the end of 2031, it would require an average of 34,100 units per quarter, beginning in 2021 Q1 – and that’s not currently happening. From 2021 Q1 to 2024 Q3, Ontario has started an average of 22,900 units per quarter. “To reach the government’s target by the end of 2031, an average of 39,900 units would need to be started per quarter beginning in 2024 Q4,” reads the report.
The report's long-term outlook presents two scenarios, with both anticipating a continued decrease in housing starts and employment until 2025. A gradual recovery is projected between 2026 and 2028. By the end of 2028, however, conditions will not have fully recovered. As a result, housing availability is expected to remain limited, keeping prices elevated.
In his report, Moffat outlines the consequences of six years of slow growth on the homebuilding front. In no uncertain terms, he highlights how Ontario’s inability to build new housing has resulted in record-low vacancy rates, sky-high rents, record food bank use, and an unofficial estimate of 234,000 Ontario residents experiencing homelessness.
As for the fortunate set who already own their homes, they should care too. “On one hand, I live in a single-family, detached home, so some may think people like me benefit from housing scarcity and high prices,” says Moffatt. “But, I want my daughter to also be able to afford a home and she won’t be able to do that if housing is scarce. You may like housing scarcity as a homeowner, but you’d probably like to have a teacher at your kids’ school and nurses in the hospital.
“If we lower fees, we can lower costs, more people can afford to purchase pre-construction, we get more housing starts and we increase supply,” says Sherwood.
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