The Building Industry and Land Development Association and Malone Given Parsons released the Greater Toronto and Hamilton Area Land Supply Analysis, reporting that the province’s growth policies have led to a lack of supply and higher priced housing.
"Growth policies implemented by the former provincial government from 2006 and 2017 have reduced the amount of available land for new housing communities, increased land prices and have caused home prices to skyrocket," says Dave Wilkes, President and CEO, BILD, in a release.
The analysis found that the 2006 and 2017 Growth Plans have had unintended consequences, including lengthening the land development and approval process. Apparently, only 4.5% of available land in the GTHA has been approved for new housing communities.
Some municipalities have not conformed to the 2006 Growth Plan and have missed the 2009 targets, so there’s less housing being built in these areas. Again, lack of supply and strong demand equals higher prices.
And of the serviced land available, values have shot up 300% since 2006. If builders and developers are paying this much more for land, the high housing prices we’re seeing shouldn’t be that shocking. In order for builders to make money, they need to cover their costs, and if costs have surged this much, then it will be passed down to the buyers.
"Land use in the province of Ontario is highly regulated and the 2006 and 2017 Growth Plan changes have slowed down the approval process to bring new land on stream for new communities," says Matthew Corey, Principal, MGP. "Increasing the supply of new land for housing is subject to a process that can take as long as a decade or more."
In addition to the lengthy development and approval process, there is also a NIMBY factor at play. Existing low density communities are resistant to intensification, and when there’s pushback from residents, it takes longer to develop new housing. The longer the process takes, the more expensive the new community will be to develop.
Gentle density, like stacked townhomes, within walking distance of transit is key to meeting demand and accommodating the growing population, but NIMBYs fight this type of housing for fear of it devaluing their property and potential of increased congestion.
Here are a few of the recommendations BILD and MGP make based on their analysis:
“1. Make more vacant land available for new communities.
2. Cut bureaucratic red tape and reduce duplication in the planning and approval process.
3. Avoid pushing too much density to fringe areas and away from transit and existing infrastructure.
4. Encourage moderate or gentle intensification across the region by clarifying and amending Growth Plan policies to encourage intensification across the GTHA.
5. Maximize investment in transit and infrastructure.
6. Provide greater certainty for future development by identifying the agricultural and rural lands in the inner-ring (Whitebelt) as future urban areas in the Growth Plan.”
It will be interesting to see if any of the powers at be take action on any of these recommendations in an effort to improve housing affordability in the GTHA.