In December 2021, the Ontario government appointed nine members to a new Housing Affordability Task Force and gave them a mandate to explore measures to address housing affordability. On February 8, 2022, the task force released their report, with 55 recommendations.
We wrote an article about the implications of the report and the recommendations back then and you can find it here.
With more than ¾ of the recommendations fully or partially implemented, we’ve more or less fixed this housing affordability issue, right?
Judging by the fact that the average price for a home in the GTA is $1.156M as of April 2024, it doesn’t seem like the recommendations have worked that well so far. In fact, a year ago (April 2023), the average price was $1.152M, so we’ve basically seen prices stay the same recently. If that continues for say, 20 years, we might see housing become more affordable. The median household income in Ontario is about $73,000, which is coincidentally about what a $1M mortgage would cost annually at current interest rates.
If you’re keen on seeing what recommendations have been implemented, you can go directly to the source. The report as well as the progress made is available on the provincial government’s website here.
We wanted to share some thoughts on what is still needed to be done to help making housing affordable in the GTA and beyond. Let’s get to it!
First, the bad news.
With house prices in Ontario having almost tripled in the past 10 years, growing much faster than incomes, home ownership is beyond the reach of most first-time buyers across the province, even those with well-paying jobs.
It has arguably never been more difficult than it is right now to enter the housing market. Economic factors such as high interest rates, high construction financing costs and a shortage of skilled labour have all compounded the issue. Add in the fact that wages have not kept pace with the rising cost of housing and it’s not hyperbole to say we continue to be in a housing crisis in the GTA and many parts of Ontario.
Cheer up, buttercup.
As we mentioned, there is some good news in that the Ontario government has been working away on the recommendations made by the Housing Affordability Task Force. The focus has very much been on how to increase supply, as the old levers of supply and demand have been the reason we’ve seen such quickly rising home prices in the last decade.
Housing starts (i.e. building homes) in 2021 and 2022 were the highest they had been in almost 40 years, so supply is coming, albeit slower than we’d like to see. While this is great news, we know that the housing affordability crisis continues to pose a major challenge across Ontario. The good news is that the province has the right tools to continue tackling the housing affordability crisis and implement the Task Force’s 13 remaining recommendations.
The Ontario Real Estate Association (OREA) has identified three big focus areas and members of the Refined team are part of the Realtors that are presenting these recommendations to MPPs in Toronto. Let’s go over what needs to happen next in order to continue to improve housing affordability in Toronto, the GTA and the province as a whole.
Quit being so exclusionary.
The first focus area that should help with housing affordability is the elimination of exclusionary zoning.
Many regions across Ontario are zoned to only allow single-family homes to be built. This means that a homeowner can tear down a war-time bungalow to build a four-storey mansion, but if that same homeowner wants to convert the bungalow into a duplex or a triplex, they are faced with extensive red tape.
The Ontario Government has the ability to mandate four units as-of-right in municipalities across the province and we’re recommending they do so. This measure is one of the fastest solutions to get much needed ‘missing-middle’ housing built across the province, including duplexes, triplexes, and fourplexes, without being hampered by red tape and lengthy approvals processes.
Show them the money!
The second focus area is increasing funding for skilled trades.
The province has put forward a goal to build 1.5 million homes over the next decade, but there is a dire lack of skilled labour to meet this demand. The Canadian Home Builders Association estimates that 22% of the construction workforce is nearing retirement. This will only exacerbate the skilled labour shortage we are already facing.
To mitigate this issue, we recommend that the Ontario government implement incentives for construction workers. It needs to become more appealing to study trades and this means more money put into interest-free apprentice loans, grants for completing each stage of a designated Red Seal trade as well as completing an apprenticeship and programs designed for women and BIPOC to more easily enter the trades.
Welcome to my store. I mean, my home.
The final focus area is facilitating commercial to residential conversions.
With the rise in popularity of e-commerce, as well as many organizations working remotely or in a hybrid format post-pandemic, there is a sizeable amount of commercial real estate that is currently underutilized.
Commercial real estate, such as strip malls, plazas, and office buildings are often located close to public amenities, such as public transportation, making them the perfect location for housing development.
The Ontario Government should legislate commercial-to-residential conversions province-wide to allow for more housing options.
While real housing affordability may be difficult to achieve, with a concerted effort from the Ontario Government, we strongly believe that implementing the policy changes listed above will move us closer to tackling this crisis.
If you’re wanting to get into the housing market and don’t know how to make it happen, we often work with first-time home buyers who need knowledgeable advice and the tips and tricks on how to find and buy a home of their own! If that sounds like you, then don’t hesitate to get in touch.
