RESCON: Lots of talk but little action

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Housing industry is nowhere near reaching the number of homes that need to be built to ensure affordability

Let me play Captain Obvious for a minute. To solve the housing supply and affordability crisis, we must build more homes. But we must also build them at a price tag people can afford.

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The common rule of personal finance is that a home should cost no more than three times your gross household income. With the average price of a new single-family home sitting at more than $1.55 million in the Greater Toronto Area, and a condo at $1.02 million, that means families would need incomes of $517,000 and $340,000, respectively, to afford a new home.

Sadly, that metric is not realistic for most. A report done for the Ontario Home Builder’s Association found that 11 of 26 municipalities analyzed in Ontario were “completely unattainable” for middle-class households.

Meanwhile, young people in Ontario are spending more than 40 per cent of their monthly income on housing in many areas. We are in dire straits.

The Missing Middle Initiative at the University of Ottawa reported that in 2005, in only three of 26 markets in Ontario, a middle-class buyer of a single-family home would have to pay 25 per cent or more of his or her pre-tax income on mortgage payments. Today, this is the case in all 26 markets.

Housing is being addressed by political leaders of all stripes and at all levels of government. And, in light of comments made by elected leaders on the provincial and federal campaign trails, we expect changes are forthcoming on sales taxes on new housing, development charges and red tape. However, the changes were needed yesterday. There is no time for dilly-dallying.

Ontario Premier Doug Ford has promised to bring in reforms to speed up the cumbersome permitting and approvals process. Housing Minister Rob Flack recently declared that we must lower fees, speed up approval times and make sure we have the talent in place to build homes faster.

Prime Minister Mark Carney pledged to eliminate the GST for first-time homebuyers on homes at or under $1 million. He also committed to cutting municipal development charges in half for multi-unit residential housing, as well as reduce the bureaucracy and red tape for builders.

These are all positive commitments. But presently, they are still promises. Governments must now walk the talk.

To start, it is critical that we speed up the municipal planning applications and approvals system. A study done by Altus Group for the Canadian Home Builders’ Association showed that Ontario municipalities are far behind their counterparts in other parts of Canada when it comes to efficiency.

For example, in the City of Toronto, the application approval timeline is taking an average of 25 months when they are supposed to be cleared in 90 days.

This is outrageous. We must speed up the system so that we can build up the stock of housing.

In a LinkedIn post, Murtaza Haider, a professor at Toronto Metropolitan University, wrote that to address the current crisis, Canada must significantly increase its housing output. He noted that the country needs to build far more homes annually than it has over the past decade.

He figures that raising the annual construction rate to 350,000 homes, including a mix of low-rise and high-rise housing, is essential to tackling the affordability crisis.

Sadly, we are headed in the opposite direction.

Ontario housing starts between January and March 2025 were 38 per cent lower than during the same period in 2024. Toronto has seen the condo market slow to its worst point in more than 30 years. In Toronto, starts in the same period in 2025 were 58 per cent below those of 2024.

Urbanation reports that eight Toronto projects have been cancelled since the beginning of 2024, encompassing 1,899 condo units. Three projects, with 338 units, are on hold. Six developments, with 1,434 units, are being converted to rentals.

The Frasier Institute recently reported that although Canada’s population has more than tripled since the 1970s, housing starts have not kept up. In 2023, Canada added 5.1 new residents for every housing unit started and, without an acceleration in homebuilding, a slowdown in population growth, or both, Canada’s housing affordability crisis will likely persist.

A lower tax burden and speedier approvals are necessary to kick-start the residential construction industry. Delays stymie new development and significantly add to project costs which are ultimately borne by consumers. Hefty taxes, fees and levies make new homes too costly.

We are nowhere near reaching the number of homes that need to be built in order to ensure affordability.

Chinese philosopher Confucious once said, “When it is obvious that the goals can not be reached, don’t adjust the goals, adjust the action steps.”

It is time to modify our approach and up our game.

Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at media@rescon.com.