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Ontario’s New Housing Supply Action Plan: Will It Solve the Affordability Crisis?

Ontario’s New Housing Supply Action Plan: Will It Solve the Affordability Crisis?
4 min. read

Photo: Igorsky/Shutterstock

May 2019 has seen the publication of Ontario’s Housing Supply Action Plan, subtitled “More Homes, More Choice.” This is the Doug Ford administration’s new initiative to tackle the province’s perceived housing crisis, which is particularly acute with regard to lower-cost properties. But is it an appropriate solution?

Why Does Ontario Need This Plan?

In the official report on the plan, Ontario’s Minister for Municipal Affairs and Housing, Steve Clark, sums up the problem by saying that:

“The cost of buying a home is becoming out of reach for many and affordable rentals are too hard to find. Plus, the cost of housing is hurting Ontario’s economy, making it harder to attract investment and create jobs. Ontario needs more housing, and we need it now.”

The problem can be seen in stark terms by looking at some figures presented in the plan: rents are up by 10-15%, the price of resale homes is up by 8-9% and 83% of buyers can’t afford these, while incomes are up by only 2% over a year. Also, less than 7% of all Ontario housing built in the last 20 years was for rental.

Is This Problem Specific to Ontario?

It is said there is an affordability crisis across much of the country. But while property prices in some areas, for example in the Vancouver real estate market, have seen considerable cooling lately, Ontario property such as Toronto real estate has held its value quite well. And this, combined with the mortgage stress test, higher lending rates and other factors, means it can be difficult for people to buy homes in Canada’s most populous province.

And the problem goes beyond economics. The plan states there simply isn’t a big enough supply of smaller housing units, and so, for instance, even Ontarian property owners who want to downsize can’t find a new place that they like and so the house they currently live in doesn’t get freed up and put on the market.

What Will the Plan Do?

The plan aims to cut red tape, thereby enabling building projects to be finalised more quickly and residential spaces to be created more easily in other places. It also declares that unused government-owned properties will be sold and that land will be freed up for new housing projects across the province.

Affordability is a big theme of the plan, and many of its initiatives are directed towards this goal. There is the hope that this will benefit the province’s economy in a wider sense by encouraging new job creation. Another idea it contains is the settling of planning disputes under old provincial rules, which may speed up construction projects.

What about Renters?

Renters are hit particularly hard by a lack of affordable housing, and purpose-built rental housing has not been a priority in many places. Also, many Toronto rentals, for example, have been the result of investors buying to rent, which tends to stoke the unaffordability cycle.

In theory, however, renting could now look comparatively sensible considering the high cost of buying properties in relation to incomes. Understandably, the plan pays particular attention to renters. One of its major initiatives is the postponing of development charges until buildings are rented, with the hope that developers will then start building more rental housing.

But Will It Work?

Not everybody is convinced. In a recent article, Jennifer Keesmaat, a former Toronto Chief City Planner, went so far as to say that:

“The fundamentals of Canada’s housing system are broken. And while there is a way forward that’s within reach, it will require us to reject many tightly held 21st-century assumptions about the housing economy.”

She explains that properties are being avidly bought up by investors who have no intention of making them available at affordable prices, and that, for example, over the past 20 years Vancouver and Toronto have together built an impressive 400,000 homes but to little avail for those without big salaries.

Greg Suttor, a senior researcher at the Wellesley Institute think tank, has said that while the plan is a positive move:

“This does not add up to a strategy that is going to change the supply (and) demand pressures or change the very high prices in the Toronto market.”

Is There a Better Solution?

A recent article addressing the problems of the London, ON real estate market, where there is an acute lack of affordable rental units, welcomes some of the plan’s initiatives but states that a more direct strategy is needed.

Keesmaat looks overseas for ideas. She notes that Vienna and Amsterdam, for example, require new developments to have a three-way split of social, affordable/rent-controlled, and market-priced housing. This would assist some would-be residents who are currently priced out of Ontario’s housing market but who could potentially be of great benefit to its economy.


  • anza1957.1.1@gmail.com says:

    Mr. Chantree Hi do you think or believe the home prices will come down in Toronto or Windsor areas

    • Francis Chantree says:

      Hello! Toronto’s real estate market has experienced a cooling, but it has now largely stabilized and I wouldn’t think the prices will drop this year. In Windsor, meanwhile, it’s predicted that residential home prices will see a double-digit gain over this year.

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