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Housing Starts in Ontario Declined Last Year, Imperilling 1.5M Target

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Ontario intends to build 1.5 million housing units by 2031, but it may have trouble achieving that ambition as housing starts decreased last year, says a new report from the Ontario Real Estate Association (OREA).

Housing starts declined to 90,000 in 2023 from 96,000 a year earlier, and that’s problematic because an average of 150,000 are needed annually if there’s any hope of achieving the lofty target.

In order to make housing in the province affordable, OREA has made 105 recommendations.

Among its flurry of recommendations, OREA has advised limiting exclusionary zoning, which limits the development of certain types of land uses through municipal ordinances or binding provincial legislation. Last year, the City of Toronto voted to end exclusionary zoning and allow multiplex construction in every one of its neighbourhoods.

The real estate association also advised allowing as-of-right conversion of underused commercial property to become mixed-use residential buildings. Additionally, OREA believes that permitting as-of-right multitenant housing and as-of-right secondary suites, garden suites and laneway houses across the province will substantially boost the number of units and help quell rapid price growth, which is driven by excessive demand relative to paltry supply.

Increasing density will also be key to helping Ontario meet its target of building 1.5 million homes in the next seven years, posits OREA. To that end, incentives are encouraged for municipalities with excess school capacity to augment density, while height and density restrictions should be rescinded for buildings situated around transit stations, provided municipal zoning isn’t already sufficient.

Underdeveloped land has also been identified as a way to improve density in a bid to meet the 2031 target. Developing infrastructure inside and outside municipal boundaries would support “reasonable housing growth,” OREA says, including high-density housing and “complete communities.”

The planning department has long been the source of complaints from the real estate industry, and OREA recommends creating “a more permissive land use, planning, and approvals system,” as well as tapering municipalities’ abilities to request or host additional public meetings beyond what the Planning Act already mandates. Doing so should truncate construction timelines.

By creating so-called “approvals facilitators” who will act as arbiters during conflicts between government officials and developers, OREA suggests adherence to construction timelines will improve. Moreover, mandating pre-consultations, at which binding application requirements will be clearly stipulated, at the outset could be a preventative measure for timeline overruns.

A key facet of this particular recommendation is prohibiting the municipality’s ability to overrule members of regulated professions, such professional engineers, who have stamped applications. Moreover, additional stamps from municipal governments wouldn’t be necessary.

The association has also called on permitting wood-frame buildings up to 12 storeys, while looking for ways to prevent abuses of the Ontario Land Tribunal.

Ontario saw 100,000 housing starts in 2021—a 30-year high—and 285,37 as of the beginning of 2024, comprising 19% of the target.

About the Author

Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.

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