Drop in applications threatens future GTA housing supply: report
CBC
The construction of new homes is not keeping pace with population growth across the Greater Toronto Area and housing affordability continues to worsen, says a new report commissioned by a group representing the region's building industry — and the data shows the problem could get even worse.
The 2024 municipal benchmarking study, released Wednesday, found a decline in development applications for new projects threatens the region's future housing supply.
The number of applications fell to 1,225 in 2023 from 2,482 in 2021 in the 14 municipalities that provided data, according to the study, conducted by market research firm Altus Group for the Building Industry and Land Development Association (BILD).
"It's like you can see the storm coming," said Noorez Lalani, president of high-rise developer MOD Developments.
"We've been throwing around the words 'housing crisis,'" Lalani said. "It's going to be a heck of a lot worse."
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BILD represents more than 1,000 GTA companies in home building, land development and renovation. This is the third study of its kind since 2020 looking at planning policy outcomes in 16 municipalities in the Greater Toronto and Barrie area.
While many of the municipalities are approving housing projects faster compared to the 2022 study, the report says the overall average timeline of 20.3 months remains "excessively high" — adding tens of thousands of dollars to the cost of building new homes.
Fees that governments, particularly municipalities, charge developers are also driving up housing costs, the report says. With Justin Sherwood, BILD's senior vice president of communications and stakeholder relations, saying "fees, taxes and charges account for approximately 25 per cent" of the total cost of building a house.
"In the short term, unless we have immediate government action to lower costs that get added to the price of a house … and take steps to speed up approvals, we're going to be looking at exacerbation or a worsening of the housing crisis in the GTA," Sherwood said.
The findings highlight the challenge to meet the Ontario government's target of building 1.5 million new homes between 2021 and 2031, at a time of high building costs, elevated interest rates and amid a labour shortage in the construction industry.
The study found the average time it takes to get a housing project approved in the municipalities decreased by 2.4 months compared to the last study in 2022.
Vaughan saw the largest decrease of 8.8 months, while Milton saw the highest increase of 13.1 months. Toronto's approval timeline decreased by seven months, from an average of 32 months to 25.
Each month in which a project is tied up in the approval process adds between $2,673 to $5,576 in added cost per unit per month, according to the study. Between $43,000 and $90,000 can be added to the cost of a new home based on average approval times.
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