Toronto real estate is about more than supply and demand

The provincial Budget was tabled last week. I was hoping for more details on the Housing Supply Action Plan, but we were simply reminded again that the Plan is in the works and will somehow increase housing supply in Ontario.  

Cutting red tape in the development and rezoning approvals process seems to be a focus of the Housing Supply Action Plan. The new home building industry has been asking for a more streamlined process for years. Delays equal added costs, which are passed down to the homebuyer. 

So, more supply and potentially a more affordable approvals process for builders and developers should in theory lead to more affordable home prices. But I think there’s more to it than that.

Saying Ontario’s housing market is a game of supply and demand is slightly too simplified for me. My team chatted with Ben Myers, President of Bullpen Research & Consulting, at the end of last week, and he said that “there are 12,000 new condo units for sale in the GTA and hundreds of sales offices where anyone can walk in and buy a new condo unit.” 

He said this in reference to the fact that non-residents aren’t buying up new condo units that locals may be buying instead, but it applies to this idea that supply isn’t meeting demand. It’s more like the supply of new detached homes isn’t meeting demand levels. 

That’s a problem for me because I believe that higher density housing, especially around transit nodes, is necessary if our major urban centres like Toronto are expected to accommodate the growing and aging population. But what happens if all these units are planned, but they don’t sell? 

I’m hoping that the Housing Supply Action Plan doesn’t just focus on how to free up land so more new detached homes can be built. Of course, a mix of housing is necessary across Ontario, and there are areas where low-rise homes make sense. 

I just think that Ontario needs some sort of awareness campaign that convinces more people that mid- to high-rise housing is enjoyable, and makes so much sense from a convenience and urban planning perspective. 

If more people lived in higher density housing near major transit nodes, there would be fewer cars on the road, greenhouse emissions would be reduced, people would live closer to where they work, less time would be wasted commuting, and there would be even more land for the development of public spaces and other community facilities.   

There’s this idea that young first-time buyers are being “forced” into purchasing a condo because that’s all they can afford. I don’t think that’s the case across the board. There should be an even stronger demand for a walkable, car-free, and maintenance-free lifestyle.

When it comes to “cutting red tape,” I really hope that the Housing Supply Action Plan includes a procedure for quickly and efficiently rezoning transit nodes to allow for high-density development via high-rises and missing-middle housing...then we just need more couples and families to want to live there.